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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch 🐝🐝🐝 GOLD
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Number: of 21938 
Subject: Re: OT: Fair Value for RSP, QQQE
Date: 01/03/24 3:14 PM
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However, at age 81 I'm wondering whether I'm a candidate for your 'doddering' designation. Or maybe I'm just lazy.

If you see the clear advantages of laziness, you're definitely not doddering : )

I get you. Simple is good. I like Berkshire, I like QQQE, I like quarterly sales forever (fixed fraction of portfolio, not fixed dollar amount) as an approach to income.
That largely describes my advice to my spouse should I croak tomorrow; our accountant can do the quarterly sales if my widow doesn't feel like it.

For older folks trying to fund retirement from a portfolio, I sometimes suggest this:
First, observe that total returns are no longer such an important thing. Thus some choices that are usually horrible are no longer so bad, provided that they are merely reliable and adapt for inflation.
That category could include (in descending order of horribleness of returns) annuities, TIPS, and overvalued broad-market index funds.

As an example, whip out an envelope and figure out what this would do for you:
Put (say) 85% of your money into a ten year TIPS ladder. Live from that for a decade, spending all coupons and capital returns as they come due. Run it down to zero.
Put the other 15% into a single 10-year TIPS holding, and on maturity, put that pile into an immediate annuity. You'd be amazed at the monthly income for life you can get on an annuity if you're buying it at age 91. (I just checked: about 22.5% of purchase cost per year)
The 85/15 split is intended to approximate the split that would give you the same real income both before and after age 91. Get some annuity quotes today and it's not hard to estimate what they might be in future and what split to use, since the internal rate of return at time of purchase does not dominate the return from annuities purchased when quite old. Budget for an extra-large annuity because that's the best way to handle inflation, not buying an inflation-protected annuity.
If you don't live that long, that last 15% is just added to your estate.
This approach won't have a great real internal rate of return, for sure, but it's no work at all after the first day (except one annuity purchase after a decade), it's mostly totally inflation protected, the income rate is almost all known in advance, and for a lot of people it would be quite a good income.

The reasoning:
It is extremely difficult, almost silly, to try to plan to fund yourself at the range of ages you're extremely unlikely to reach like 100-110. Better to use some sort of pooled scheme for the far right side of the bell curve (like an annuity) because a lot of small contributions into the pool by many people will fund comfortably the few in the pool who ultimately need it. This frees you up to be happy running down the rest of your portfolio until that scheme kicks in.

I'm not saying this is the right answer for you, or for anybody, just a style of thing to consider.

Jim
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This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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