Investing - Theory, News & General • Re: [Book: Living off Your Money, by M. McClung (Prime Harvesting)]

I’ve been working my way through McClung’s book over the past couple weeks. While I don’t think it’s usable as a guide in my own situation, it certainly gives me some things to think about.

Positives:
- Idea of variable withdrawals and variable stock percentages being more optimal - supports a lot of the more modern research as well as using TPAW Planner
- The recommendation for bonds being half TIPS and half split between short and intermediate term treasuries. Similar to Rob Berger’s recommendations.
- The charts in chapter 10 comparing the recommended variable withdrawal approach to a 40 yr MSWR fixed withdrawal really hit home. You don’t realize how much you’re giving up when only looking at an ending portfolio balance. Seeing each individual year withdrawal percentages separately helped it sink in that a fixed 3.5% is leaving a lot in the table unless retiring into the worst market.
- Even before reading this book, I had begun thinking about basing rebalancing off historic stock market returns. The concept he uses to determine if rebalancing is warranted seems viable with any withdrawal strategy.

Challenges:
- As others have said, it’s difficult (if not impossible) to properly manage a large taxable portfolio in early retirement. The tax consequences of 20% sales in a taxable account would be bad (ERN has a modified approach that seems more feasible for taxable). Moreover, how would one get near 50% fixed income in a taxable account without dealing with very inefficient fund placement during the accumulation years or a massive capital gain selling stocks to buy bonds? Maybe equal sized taxable and traditional accounts with one being fully stocks and the other fully bonds that you rebalance across with the possibility of using 72t if you hit a bad SOR…
- McClung’s strategy essentially follows a rising equity glide path during poor (and even mediocre) markets but takes some off the top during good markets. It seems like this just limits upside for the lucky retirees with the justification that most retirees don’t have the heart for sticking with mostly stocks. In reality, the person who retired into a good market is less likely to lose sleep over the fact that they are equity-heavy while the unfortunate retiree could be 100% stocks out of necessity and would certainly be losing sleep.
- McClung does a good job trying to minimize data mining in early chapters but as soon as he goes into portfolio composition, its hard to ignore some data mining. Minimize fat tails has the highest harvesting ratio but was thrown out due to lack of diversity and the ultimate buy and hold was recommended. This portfolio seems to have been the craze when the book was released but has not faired too well in the past 10 years. I wonder if this portfolio would have even triggered a rebalancing event due to low returns in small cap and international (up through 2024 at least).

While McClung’s takeaways to some charts in chapter 10 are quite positive since they don’t fail, looking at someone who “FIRE’d” and has a 50 year horizon, the nominal plan for a 1969 retiree has 3% or less withdrawal rates for the better part of your first decade in retirement. The next chart with a 3.5% floor has the first 23(!) years at 3.5% and then you hit the dot com bust in year 45 and end with 5% left in your portfolio. That would be pretty terrifying for someone expecting to pull 4-5%. It just goes to show that you need to be willing to live with the worst case scenario if it happens. However, for the person planning on a 3.5% fixed withdrawal rate, this would be fine and might push them to spend more in good years.

I’m not sure what to think about the guaranteed income ideas at the end. I’m decades away from when a SPIA would make sense so maybe I’ll revisit the chapter down the road. When he discusses the “failure market” conditions, it makes you wonder at what point we should stop worrying about protecting our portfolio since the world at that point may not be one that any of us would like to be around to see.

Overall, a good book and worth it for the new ideas.

Statistics: Posted by kappy — Sat Sep 26, 2026 3:02 pm