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Zachary
Member since Jan 2007
279 posts

At how many years prior to retirement do you...
... 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.


Zilla
LSU Fan
Member since Jul 2005
10331 posts

re: At how many years prior to retirement do you...
I don't plan on getting out ....


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180
Thib-a-doe Tiger
LSU Fan
LaTour and in BRgetthenet's head
Member since Nov 2012
27669 posts

re: At how many years prior to retirement do you...
Are you asking advice, or in general?


Advice: everyone’s plan is different


General: old people should hold less stock


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100
castorinho
Oklahoma Fan
13623 posts
Member since Nov 2010
55509 posts

re: At how many years prior to retirement do you...
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.
This post was edited on 1/8 at 4:57 pm


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70
Homesick Tiger
LSU Fan
Greenbrier, AR
Member since Nov 2006
39793 posts

re: At how many years prior to retirement do you...
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.


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21
deeprig9
Georgia Fan
Member since Sep 2012
31759 posts

re: At how many years prior to retirement do you...
Hopefully the managers of the Fidelity 2045 figure that out for me and earn their fees.


RoyalWe
LSU Fan
Prairieville, LA
Member since Mar 2018
214 posts

re: At how many years prior to retirement do you...
quote:

Hopefully the managers of the Fidelity 2045 figure that out for me and earn their fees.
Managed funds are really expensive.


PlanoPrivateer
LSU Fan
Frisco, TX
Member since Jan 2004
2135 posts

re: At how many years prior to retirement do you...
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.


Joshjrn
LSU Fan
Baton Rouge
Member since Dec 2008
12811 posts

re: At how many years prior to retirement do you...
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.


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10
Fat Bastard
Boston College Fan
Member since Mar 2009
38192 posts

re: At how many years prior to retirement do you...
(no message)
This post was edited on 1/10 at 9:58 pm


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Member since 2001
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EA6B
Navy Fan
TX
Member since Dec 2012
8721 posts

re: At how many years prior to retirement do you...
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 at 8:17 pm


seawolf06
LSU Fan
Raleigh, NC
Member since Oct 2007
6754 posts

re: At how many years prior to retirement do you...
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.


RoyalWe
LSU Fan
Prairieville, LA
Member since Mar 2018
214 posts

re: At how many years prior to retirement do you...
quote:

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.
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.


nctiger71
LSU Fan
North Carolina
Member since Oct 2017
291 posts

re: At how many years prior to retirement do you...
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.


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40
Joshjrn
LSU Fan
Baton Rouge
Member since Dec 2008
12811 posts

re: At how many years prior to retirement do you...
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.


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61
Ace Midnight
LSU Fan
Between sanity and madness
Member since Dec 2006
65602 posts

re: At how many years prior to retirement do you...
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.


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gpburdell
Georgia Tech Fan
ATL
Member since Jun 2015
420 posts

re: At how many years prior to retirement do you...
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.


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10
AugustaTiger
Augusta, Georgia
Member since Dec 2017
73 posts

re: At how many years prior to retirement do you...
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.


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baldona
Auburn Fan
Florida
Member since Feb 2016
8179 posts

re: At how many years prior to retirement do you...
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.


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tirebiter
LSU Fan
ATL
Member since Oct 2006
6044 posts

re: At how many years prior to retirement do you...
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.
This post was edited on 1/11 at 4:58 pm


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