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So I should go in stable income fund till crash?
Simple fix folks-you can get over 5% for 3 years and beyond with several A rated or higher insurance companies with generous withdrawal options. Lock in before Fed steps off interest rate gas pedal. Or get 10 year SPIA-this isn’t complicated. Then remaining stock market $ left for growth to avoid sequence risk of selling into bear market day 1 of retirement. Don’t overthink it
That's why I keep my money under my mattress. No need to worry about sequence of return risk
Oh the doom and gloom on a Sunday…
So sequence of return risk is real however if you are going into retirement or now in retirement you shouldn’t have 100% of your money at stock market risk , you should have a minimum of 5 years of withdrawals protected from the markets ups and downs and have a designated percentage for growth . I am 2 years out from retirement and currently have 6 years of withdrawals protected and looking to add to that if the market continues this crazy run .
A good argument for annuitizing (income annuity) some of your portfolio at or in the near future of retirement.
Don't get killed.
I wonder if lots of people decide to retire after a nice stock market bull run? They look at their quarterly statements and think, wow, I can retire now. Then, eventually, after the bull market comes the bad news bears. There has been nice returns since October 2023. The only thing I can see to do is keep up on your asset allocation and keep rebalancing. Stay in the market with a percentage and have a percentage in cash, money market or bonds. Also, a single balanced fund doesn't make sense because if you redeem shares, your selling stocks and bonds at the same time.
Great Video Josh
Josh I just keep investing and this was a great year so far. When the Experts predict doom and gloom, I just keep investing !
Simple solution keep 5 years cash on hand.
since I won't have a house payment, car payment, and no credit card debt, I'll hunker down and won't sell my stocks when they are down. Reverse mortgage and social security at age 62 will preserve my stocks. 😄
sequence risk,who cares,4 or 5 years cash,invest the rest any which way you want,DONE,stop over thinking!
Thanks Josh
I have 70% of my retirement money in Vanguard Wellesley and 30% in Vanguard Retirement 2030 Fund. I retired at 65 in April of 2023. This is all of the risk that I am willing to take. I am quite content with the return of 7% that I earned last year when the market returned 18%. Sooner or later the market is going to take a dive and I need to sleep at night. I also have another 6 years of a cash reserve for when this happens. My parents and grandparents taught me how to be cautiously conservate and I thank God for these lessons.
With a million dollars you don't have it all in the same investment. Say your total portfolio goes down 30%, your biggest loser went down 50% and your top winner went up 5%. You sell your winner and keep your loser. As long as you choose your investments based on good fundamentals, it works.
100% S&P index fund with a 3 year safety fund 😂 also supplement with side gig
So in this scenario, let’s say you begin retirement with $1-million invested in a mix of stocks and bonds and plan on using a standard 4% withdrawal rate – so $40k per year. Now, let’s say you decide to transition four years of your income needs to cash ($160k) to protect against downside risk, leaving you with only $840k invested in stocks and bonds and $160k in cash.
When you do your next 4% distribution, do you still base it off your original $1-million in total assets, or do you need to drop it down to 4% of only the $840k in assets with growth potential, essentially taking your cash assets out of the mix when calculating your annual distribution…….🤔
I’m going to retire end of this year so I’m going to stay G fund until SS kicks in in 3 years. I won’t really need TSP withdrawals at that point. Then, I can switch to a more aggressive mix to grow.
Been retired eleven years and keep about five years worth of living expenses in CDs, treasuries and money market. Everything else in stocks or real estate. Dividends and interest provide nice income along with SS and a small pension.