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At how many years prior to retirement do you...
Posted on 1/8/19 at 4:10 pm
Posted on 1/8/19 at 4:10 pm
... plan to get out of stocks and equity funds entirely (if you do so plan)? And do you plan to taper on the way there?
Thank you.
Thank you.
16
Posted on 1/8/19 at 4:45 pm to Zachary
I don't plan on getting out ....
Posted on 1/8/19 at 4:48 pm to Zachary
Are you asking advice, or in general?
Advice: everyone’s plan is different
General: old people should hold less stock
Advice: everyone’s plan is different
General: old people should hold less stock
Posted on 1/8/19 at 4:55 pm to Zachary
Prior? Or into?
It's a balancing act. Personally...prior: I'll never fall below 60% stocks. Into: start easing out, but I will still have market exposure.
It's a balancing act. Personally...prior: I'll never fall below 60% stocks. Into: start easing out, but I will still have market exposure.
This post was edited on 1/8/19 at 4:57 pm
Posted on 1/8/19 at 5:16 pm to Zachary
Since retiring six years ago the wife and I have been putting our money in mutual funds. I have held onto my railroad stock however and am glad as hell I did.
Posted on 1/8/19 at 5:24 pm to Zachary
Hopefully the managers of the Fidelity 2045 figure that out for me and earn their fees.
Posted on 1/8/19 at 6:52 pm to deeprig9
quote:Managed funds are really expensive.
Hopefully the managers of the Fidelity 2045 figure that out for me and earn their fees.
Posted on 1/8/19 at 7:38 pm to Zachary
I am retired and my retirement accounts are roughly 50% stock and 50% bonds all in mutual funds. Stocks took a big hit the last quarter so I'm rebalancing.
Posted on 1/8/19 at 8:00 pm to Zachary
quote:
... plan to get out of stocks and equity funds entirely (if you do so plan)? And do you plan to taper on the way there?
Thank you.
Before retirement? I don't plan to be entirely out of equities. You don't sell off your entire portfolio the day you retire, so there is no need for 100% of your portfolio to be downturn proof. You only need enough of your portfolio out of equities to outlast the next downturn. What percentage that is depends entirely on how much of your annual retirement income will be funded by equity sales versus how much will be funded by everything else, e.g. dividends.
Posted on 1/8/19 at 8:04 pm to PlanoPrivateer
(no message)
This post was edited on 1/10/19 at 9:58 pm
Posted on 1/8/19 at 8:15 pm to Zachary
Everyone's situation is different, I have been retired 8 years, and remain heavy in equities keeping only money I will use in the next 2-3 years in interest bearing accounts and cash.. Look at it this way if you were not retiring for another 20 years you would probably not have a issue with investing money in equities. Assuming I live long enough I have money I will not need for 15-20 years, so why not leave it where it has the greatest chance of significant growth, seems like the same philosophy to me.
This post was edited on 1/8/19 at 8:17 pm
Posted on 1/9/19 at 9:34 am to RoyalWe
quote:
Managed funds are really expensive.
There's no date, but based on the comments that article is over 3 years old. You should definitely check again before completely dismissing managed funds.
Also, any good comparison calculator should account for two funds with different return rates as well as different expense ratios.
Posted on 1/9/19 at 7:54 pm to seawolf06
quote:Math is math and has no expiration date. Any percentage you give to someone else is not allowed to be compounded for yourself. That equates to a lot of money. Someone already mentioned the Frontline episode "The Retirement Gamble" which goes into more detail if you're interested. Bottom line is that you can manage the risk yourself and the fact that you're not giving away a percentage means you buy yourself a lot of leeway to not get it exactly right. Having said that, it's not difficult at all to do.
There's no date, but based on the comments that article is over 3 years old. You should definitely check again before completely dismissing managed funds.
Also, any good comparison calculator should account for two funds with different return rates as well as different expense ratios.
Posted on 1/9/19 at 11:01 pm to Zachary
I'm retired and still have about 70% equities because I am more afraid of inflation than a stock market correction. I have lived through several of those; '87 and '08 come to mind. Also have seen interest rates in the double digits in the late '70s.
But to be in stocks when you're retired depends on your expenses, primarily are you out of debt, and can you live on your guaranteed income if you had to.
By guaranteed income I mean SS, pension, annuities, etc. Your health is also a big factor.
There is no single correct answer to your question and there is uncertainty associated with any decision.
But to be in stocks when you're retired depends on your expenses, primarily are you out of debt, and can you live on your guaranteed income if you had to.
By guaranteed income I mean SS, pension, annuities, etc. Your health is also a big factor.
There is no single correct answer to your question and there is uncertainty associated with any decision.
Posted on 1/10/19 at 9:52 am to RoyalWe
quote:
Math is math and has no expiration date. Any percentage you give to someone else is not allowed to be compounded for yourself. That equates to a lot of money. Someone already mentioned the Frontline episode "The Retirement Gamble" which goes into more detail if you're interested. Bottom line is that you can manage the risk yourself and the fact that you're not giving away a percentage means you buy yourself a lot of leeway to not get it exactly right. Having said that, it's not difficult at all to do.
Math is math, and the average person is really stupid. Vanguard Target Date funds are currently charging a fee of 0.15%. Can you save a bit of money by educating yourself and handling your investments on your own? Absolutely. But would the average person likely come out way ahead if they just plugged away at a target date fund and did their best to forget it existed? I firmly believe so, yes.
Posted on 1/10/19 at 11:06 am to Zachary
quote:
plan to get out of stocks and equity funds entirely (if you do so plan)? And do you plan to taper on the way there? Thank you.
I'm probably going to start tapering at 7 years out - roughly 1/7th per year.
Posted on 1/10/19 at 4:40 pm to Zachary
I never plan to get out of stocks to keep up with inflation unless I win the lottery.
I keep my portfolio at 75% stocks. When I retire, I will reduce that to 50%.
I will lower down to 50% gradually the closer I think retirement is.
I keep my portfolio at 75% stocks. When I retire, I will reduce that to 50%.
I will lower down to 50% gradually the closer I think retirement is.
Posted on 1/11/19 at 6:24 am to Zachary
In my eyes there are two types in investments... fixed income investments (bonds) and rising income investments (stocks).
I don’t want to carry many fixed income investments into a world where costs are rising every year because my purchasing power erodes... Especially with the low rates being paid on fixed income today.
Keeping 18 months cash reserve plus 10k cash for each year retired on hand and 100% equity portfolio focused on companies that grow their dividends. I also know how crazy this strategy sounds but I’m fine with the ups and downs.
I don’t want to carry many fixed income investments into a world where costs are rising every year because my purchasing power erodes... Especially with the low rates being paid on fixed income today.
Keeping 18 months cash reserve plus 10k cash for each year retired on hand and 100% equity portfolio focused on companies that grow their dividends. I also know how crazy this strategy sounds but I’m fine with the ups and downs.
Posted on 1/11/19 at 3:10 pm to EA6B
quote:
I have been retired 8 years, and remain heavy in equities keeping only money I will use in the next 2-3 years in interest bearing accounts and cash..
Good stuff right here, what everyone should do.
Keep 2-3 years in cash, that way all of your investments are not needed for 3-4 years. Buys you time to be patient and not shite about the near term market situation.
Posted on 1/11/19 at 4:57 pm to Zachary
I retired 8 years ago at 47, been as high as 80% stocks, now at 55% comprised of ETFs, individual stocks, and mutual funds. Roughly 20% in commercial RE and rest in cash, CD's and different types of bonds. If and when I sell the RE I doubt I would not add significantly to the equities unless the market is valued significantly lower than today. I'm pretty sure my wife is going to retire this year as her employer has finally managed to suck the enjoyment out of what she does, we'll see. When she does we are getting the hell out of GA.
There is a recent white paper by Estrada and Kritzman, you can download it at the SSRN site, title is "Toward Determining the Optimal
Investment Strategy for Retirement" . It is a global look at different levels of risk/return/longevity/portfolio survival, etc, it might help you with your planning and time frame.
There is a recent white paper by Estrada and Kritzman, you can download it at the SSRN site, title is "Toward Determining the Optimal
Investment Strategy for Retirement" . It is a global look at different levels of risk/return/longevity/portfolio survival, etc, it might help you with your planning and time frame.
This post was edited on 1/11/19 at 4:58 pm
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