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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by Hefe
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But the number of (Admiral) funds is hard to follow in detail & I'm wondering recently if I should just put the bulk of my pile into Wellesley & be just as well off? Some advisors recommend a 50/50 Wellesley/Wellington allocation, I guess that would be a bit more equity focused.
I'm all for considering the entire portfolio as a mark of distributions and earnings. (rather than a 4% annual distribution)
This discussion has led me to re-evaluate my allocations in Wellesley/Wellington.
I've been retired (no wage income) for 18 yrs, just reaching FRA, but I see W/W has been a serious lagger, so I'll look to reducing those, and increasing my broad market growth a bit more. While I'm retired... I dislike my portfolio being 'retired' also.
Since the number of yrs years I need to support are declining, I can take on more risk
*I still have plenty, tho have never been 'rich'. Just adding to the financial benefit the charities will get from my estate.
The cash holdings mindset is a bit more difficult, but very important to overcome. Since I hold a mortgage (~20% LTV), I like to be able to write that check if ever needed, but as my CFO kid said 20 yrs ago... "You don't need to be hanging onto that cash, just sell something when (if) you ever need to write that check". Haven't needed it yet, very unlikely to need it in the future... Shoulda listened to my kids...
I am about 4 years from retirement and think about NOT having a whole lot of my retirement money in the stock market when I retire. Yes, I know the idea is to be invested in the market to keep up with inflation but dislike the inevitable market swings that go with it. I know that is part of the game but want to have as stress-free of retirement as possible.
I am thinking maybe 25-30% at the most invested in the market upon retirement. I realize that might be too conservative but want don't want to take big hits in account value. We live in an ever-changing world and the market seems so volatile and wonder if and when stability will happen. I don't want this to become a political thread, but it seems government actions affect the market so much more than good old-fashioned company earnings.
I know there are people invested 50/50 in retirement but that just seems too rich for me. Curious of views from current and future retirees.
Do you have 20-30 years to wait for the NYSE to recover to the levels of 3 years ago? And then discover that inflation took another 60% when you weren't lookin'?
I'd prefer not to need stocks, but I do need the growth (vs. income from bonds and other dividend-payers.) I'm 60-40. stocks/bonds now. I have a policy: the stocks I own must offer a yield of at least 3%. Some offer much more than that.
If I had only myself to worry about, the picture would be different. But we all have family members we choose to help, or kids to put through university, or we might be saving for a vacation, or what have you. Wife still works. There's 19 years in age between us. That income will be steady for years to come--- as much as anything can be relied upon. Her idea of saving is not to do any of it. A large chunk ends-up assisting family, back in the stink-hole country she originally came from. I don't complain. It's convenient for me to cover rent and electric. (Water is included.) She covers all else, plus some $$$ for me to invest.
Apart from a once-per-year withdrawal in January, all profit gets reinvested, still. I like my life. The heirs can enjoy what's left behind.
I'm all for considering the entire portfolio as a mark of distributions and earnings. (rather than a 4% annual distribution)
This discussion has led me to re-evaluate my allocations in Wellesley/Wellington.
I've been retired (no wage income) for 18 yrs, just reaching FRA, but I see W/W has been a serious lagger, so I'll look to reducing those, and increasing my broad market growth a bit more. While I'm retired... I dislike my portfolio being 'retired' also.
Since the number of yrs years I need to support are declining, I can take on more risk
*I still have plenty, tho have never been 'rich'. Just adding to the financial benefit the charities will get from my estate.
The cash holdings mindset is a bit more difficult, but very important to overcome. Since I hold a mortgage (~20% LTV), I like to be able to write that check if ever needed, but as my CFO kid said 20 yrs ago... "You don't need to be hanging onto that cash, just sell something when (if) you ever need to write that check". Haven't needed it yet, very unlikely to need it in the future... Shoulda listened to my kids...
Absolutely, Wellesley/Wellington lag in up markets. But they also outperform in down markets. My portfolio last year (combination of VWIAX and TRAIX, a moderate allocation fund ) was down 10.41%, far less than the S&P 500. With that said, the research from Kitces and Pfau clearly shows you can increase your equity allocation after a certain point in retirement. It is a personal choice and depends on how much risk you’re willing to take, overall portfolio size, other sources of income, etc..
Very few people have pensions any more. That leg of the stool is gone for most Americans.
I don't know about that. I'm 57 and I was able to take advantage of my corporate employer's 401K with match while being grandfathered into the pension plan that the older, retiring employees were getting. I actually know a fair amount of people around my age who got the same deal with their companies. The biggest problem was that some of them opted not to take advantage of the 401K w/match because they were still on the pension plan but they didn't take into account that the pension was reduced and no longer set up to be the sole source of income in retirement.
Government workers, teachers, law enforcement still have pension plans.
I am about 4 years from retirement and think about NOT having a whole lot of my retirement money in the stock market when I retire. Yes, I know the idea is to be invested in the market to keep up with inflation but dislike the inevitable market swings that go with it. I know that is part of the game but want to have as stress-free of retirement as possible.
I am thinking maybe 25-30% at the most invested in the market upon retirement. I realize that might be too conservative but want don't want to take big hits in account value. We live in an ever-changing world and the market seems so volatile and wonder if and when stability will happen. I don't want this to become a political thread, but it seems government actions affect the market so much more than good old-fashioned company earnings.
I know there are people invested 50/50 in retirement but that just seems too rich for me. Curious of views from current and future retirees.
You have to do what works for you, and what you can live with. It's different for everyone.
Very few people have pensions any more. That leg of the stool is gone for most Americans.
To be honest, I think I know a lot more retired people that have pensions, than those that don't. But I know a lot of school employees, and civil service folks, cops, and the like. Longshoremen, too. Great pensions. No pensions in banking, but if you have been there a while, at a good bank, then you are getting the insane bonuses that they are paying now, and you really can't complain!!
Do you have 20-30 years to wait for the NYSE to recover to the levels of 3 years ago? And then discover that inflation took another 60% when you weren't lookin'?
I highly doubt it will take 20-30 years to recover to the levels of 3 years. I'm assuming you are not in the market and have other retirement plans.
...But the traditional pension is now like a hen's tooth. You know, the sort that was INTENDED to support you, along with SS, in retirement. I count myself lucky that I'm getting the benefit of an old fashioned pension which RISES a bit each year. Many (or most?) pensions don't do that anymore. You get the fixed amount. That's it. See ya later.
A prudent plan for retirement that ought to be implemented by those who are still rather young is to not spend dividends. Reinvest it all. Financially successful people don't need to be rich in order to be able to retire. But start early to "make a bargain with the future." Don't spend on take-out and latte coffee. Make an investment out of limiting your pizza intake from the pizza parlour. Defergratification. That's how it's done.
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