Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
That's how are situation differs. I am still dealing with new money going in weekly plus. At this age and retirement longevity it is a interesting and blessed position to be in.
I never could embrace game over and am glad I didn't. Because we both intend to leave our kids a comfortable nest egg we have depending on accounts a decent time horizon.
I hope our dialog is helpful to the OP so that he can relax and use the current market climate to his advantage so he is prosperous and feels he made good decisions when retirement comes and from then forward. He has big decisions as we all did and do.
I do remember when it had all gone down back in 2018 like another poster had stated, and after a while everything did start to go back up again.
I'm trying not to panic, and just ride it out.
Retirement isn't happening to me for another 5-10 years. I'm 60 now.
The five to ten years before retirement are the most vulnerable….that is because a steep market drop when you are at the largest portfolio size can do the most damage dollar wise ….
It is best to start to tone things down the first ten years going in and the first 10 years in to retirement..then once the so called red zone is cleared you can go pedal to the metal if you want and be as aggressive as you like . https://www.kitces.com/blog/managing...ment-red-zone/
that's sweet and will add up tax free. It becomes play money and probably inherited one day. I hope the OP stays the course but that's their decision.
yep , we likely will have quite a bit left over unused since you always need dry powder for the what if's in life .
we use a real time withdrawal method based on each years actual balance so it is a lot more efficient at drawing money out then the mythical robotic spending of a 4% draw ..
so my bitcoin and some stock funds will likely never get touched unless i eventually take profits and do something else. even if i took rmds they likely would just be bought in the taxable account
yep , we likely will have quite a bit left over unused since you always need dry powder for the what if's in life .
we use a real time withdrawal method based on each years actual balance so it is a lot more efficient at drawing money out then the mythical robotic spending of a 4% draw ..
so my bitcoin and some stock funds will likely never get touched unless i eventually take profits and do something else. even if i took rmds they likely would just be bought in the taxable account
...
Why can't you just say CASH. It's what you mean, isn't it?
It isn’t just cash . It is any liquid assets you can sell if you need money .
The 4% swr has you ending 90% of the time with more then you started with using a 60/40 and you may hold little cash.
So we tend to have dry powder that is not spent down many times and it can exist in any assets that can be sold in an emergency .
Even 100% equities has historically worked well and will have quite a lot of excess money invested that could be used without effecting the income stream
I wish I could bounce the check to the funeral parlor , but we can’t time things so as we get in to the last down there will usually be money that will be unspent in most cases
Last edited by mathjak107; 01-29-2022 at 09:47 AM..
Why can't you just say CASH. It's what you mean, isn't it?
In general dry powder are liquid assets that could be cash or money market funds. Easy to liquidate and held in reserve for unusually a undefined purpose. Could be emergency or for market entry at the appropriate time or some other future use.
If a person dependent on 90k in investment income to live on they may have 110K with 20k of liquid assets being for a undesignated purpose as dry powder?
It is usually a term used by investors and business and is part of the lingo of the culture.
I knew exactly what MJ meant and how he was using it. I can understand why others wouldn't.
When it comes to investing dry powder is usually cash instruments.
When it comes to spending down , dry powder can be having an amount of money either invested or cash that if used will not force a cut in the income stream .
Don’t forget the idea of a safe withdrawal rate is it provides a safe , consistent, secure income stream in good and bad times that can be counted on not to have to be cut with a high rate of success .
The idea is the income stream holds constant while good and bad markets effect only the balance left …
Well , if you suddenly have a big expense that puts your years budget over the balance comes into play …
It is nice to end with what you started with 90% of the time , so that money can be utilized even if assets have to be liquidated since your typical income stream will not be effected
When it comes to investing dry powder is usually cash instruments.
When it comes to spending down , dry powder can be having an amount of money either invested or cash that if used will not force a cut in the income stream .
Don’t forget the idea of a safe withdrawal rate is it provides a safe , consistent, secure income stream in good and bad times that can be counted on not to have to be cut with a high rate of success .
The idea is the income stream holds constant while good and bad markets effect only the balance left …
Well , if you suddenly have a big expense that puts your years budget over the balance comes into play …
It is nice to end with what you started with 90% of the time , so that money can be utilized even if assets have to be liquidated since your typical income stream will not be effected
I don't know about your after tax brokerage accounts but I hold dry powder in money market accounts which are paying barely above cash but are paying something. They are also used as sweep accounts with some brokerage accounts where money gets swept in and out. I also use a online high yield .50% account for dry powder as I can move money from it to my bank the same day and then use it to buy assets with.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
