“In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett had once said. “The trick is not to pick the right company. The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low-cost way,” he further added.
I don’t get fancy. I have most of my money in voo and qqq. I haven’t seen too many funds out performed those index funds. Other 20% in money market, bonds and fun money for single name trading. I don’t do annuity.
When I retire I will keep 1-2 years spending money in low volatility investments and continue to keep other investments in index funds.
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I have worked with the same CRPC through fidelity on multiple occasions to have a professional review the initial planning and ensure my DW gets to ask questions and get answers from someone other than me. I will meet again once I have a better understanding of expenses (especially now that S21 and D24 are off the payroll.) If this does end up being retirement instead of a gap year, I will take a harder look at if the current professional is the right person to trust for a long term plan.
Like @oldfort just stated, for most people until they are retired, putting the bulk of your funds in an S&P Index fund doesn’t require professional assistance.
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Have you ever done a risk analysis with any kind of financial tool (or had someone do one for you) based on your portfolio?
I agree about performance of index funds, but when you get close to retirement age and in retirement your mix may not hold up in the years you need the value to hold.
Something that has hit some on this thread is skyrocketing insurance premiums on real estate. AARP The Magazine Aug/Sept 2024 gave an example of a retiree couple “with a $1.1 M house near Lake Tahoe, who were dropped by their insurer. Under current California rules, the insurer could not properly underwrite and price the policy to cover the area’s increased fire risk.” Their prior policy was $1800 annual. Their new policies - cover everything but fire damage $3100. The second was FAIR "fair access to insurance requirements: - last resort policy (more than 30 states offer FAIR plan providing basic coverage for properties exposed to high risks, typically from natural disaster. Their FAIR premium cost $6800 for the couple’s 2000 sq ft home. To cut their premiums, they raised the deductible to $10K on the residential policy and to $15K on the FAIR policy. Then they lowered coverage of personal property on both policies from $700K to $150K, removed coverage for an additional shed like structure, and eliminated coverage for the cost of temporary housing if damage forced them from their home. That cut their total premiums to about $6,000 from nearly $10,000. Their coverage is lower, but they are protected (to some degree).
Examples like this can happen along the path in retirement – and it is always good to have more money in retirement than one believes they will need – and also in early years of retirement seeing how the portfolio somewhat holds its value for the long haul.
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I am not sophisticated…I figured I will always put aside enough money to pay for few years of expenses in order to ride out possible market dip(s), and have rest of it in higher return investments.
I don’t see the need to be overly conservative just because I am closer to retirement.
I have done some stress tests, and the numbers seem to work under some very bad scenarios.
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I bought my coop with 2.25% mortgage and the maintenance has increased 5% in 10 years. I bought into my building because of its finance, its infrastructure, and its proximity to my adult kids. I like things to be simple, but simplicity takes work.
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This amount is after setting aside funds for a couple trips and paying off a car loan. I have heard many times about the S&P Index funds. I am at least 10 years away from retirement. We have a solid emergency fund. I will need a new roof and a/c unit soon.
D19 literally just bought a house on her own on 8/30. (It is good to live in a low-cost city) DW has been buying some odds and ends for decorations. We haven’t seen the house yet but will next month. Based on how it looks and how it is structurally we could pass along some funds for a repair or project. D23 is still in college and has a full ride so she isn’t even touching her 529 for undergrad. She will save it for a Masters or just start rolling it into a Roth.
Neither myself or DW came from money. Just two blue collar families, so we had a large negative networth when we graduated and got married a year after school. It has been a long road to get semi-comfortable in life. It has taken 30 years to get in our position and now we have some found unplanned money. We are so conditioned to searching for sales and always looking out for deals. We won’t change that mentality.
Probably the best idea is to have a meeting with our FP and rebalance everything. I haven’t balanced anything. And really the only reason we have a FP is because the guy that sold us life insurance and got us started on a mutual fund monthly purchase retired and his practice was purchased by a larger group and we are probably at the bottom of his client base in terms of amounts and networth.
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Just authorized the financial planner that managers some of my money to move it into a more risky balance. Of course the market goes down now…
If the planner moves it wisely, buying when the market is down may pay off well for you.
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I only buy when the market is down…when the stocks are on sale!
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Discussion of rebalancing seems like a good idea. It’s a good opportunity to think about a good way to summarize everything on one page, if you don’t already do so.
Good strategy! 
Picking stock market bottom is like putting a pile of soft hay in the exact spot where one would accidentally fall in the future, to paraphrase my grandfather 
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And I do a very good job personally, of buying when the stocks are high. It’s an art! 
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Your grandfather is correct. I also use the term, don’t try to catch a falling knife. But only when you don’t realize when your targeted stocks are a bargain.
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No-one has been posting lately. Interestingly, DD2 has been very interested in how we manage our cash flow as retirees. Her BF and she both now have car payments and are renting a small house - and she is learning from us on investing Roth IRA, has her work Roth 401k, and structuring her own spending habits. Both DDs will eventually hit the hurdle of home purchase.
Our home updates (due to 2 insurance claims) are ‘moving along’ - they are finally now tearing off the old roof and putting on the IBHS fortified roof (May 18 insurance claim and start of process…). Getting the interior contract today, with the master bath vanity away for ‘rework’ (two sinks instead of sink and make up counter/knee space/drawer). Once the roof is done the interior will go quickly. Finally. Paying for some upgrades for the 3 interior rooms. This is a very good start on my focus on interior rooms decluttering and future updating.
Our retirement funds, cash flow and returns, are all stable. Still will be sorting out our needs in regard to how we set up our ‘estate’ for passing on to DDs, Gkids - in time period moving forward and with our passing.
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On fairness/equality, there may be a gap between the kids’ position today (some doing well, some struggling) and their position later. One who is doing well now may develop a chronic disease and the one who is struggling may turn things around. Hard to predict.
At the moment, ShawSon and his wife have pretty high expected lifetime income (she has a relatively senior position in big tech and he is a VC-backed tech entrepreneur). However, he was having health problems and reduced his workload for six months or so to address the health issues. Fortunately, things are much improved and he is back to full or nearly full workload. ShawD does well but is an inherently less lucrative industry and is not married, though she has a partner on an excellent career track. ShawD is getting a certificate in a related field which she can do remotely when she has kids and which is more lucrative. Who knows how things will turn out?
We’ve tried to deal with this in two ways. First, help when needed. When ShawD’s belongings burned down when the moving truck taking her stuff from the West Coast to the East Coast caught fire, we helped her and helped her setting up.
Second, to deal with the inherent uncertainty in life, use a trust. The trust is accumulating assets. The trustee can allocate money to either kid as needed. It has distributed a bit to help ShawD with capital expenses at her house. But, if ShawSon were to have needed money due to the medical problems, it could have helped with those.
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I think we all need to hire you to tell us when the market is down enough to buy.
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Nah, you need my 87 year old mom to do that. When the market is down, my mom’s broker would text me to let me know my mom is shopping.
In the middle of day, she’ll text me “I know I am not supposed to call you during the day, but you should sell stock X now.”
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Meeting with out FA this week and invited ds2, who is executor of our will, to sit in. Any reason that’s a bad idea? We thought it would be helpful for him to hear our thinking and maybe get some tips of his own.
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Generally, I think transparency is a good thing. ShawWife’s mother would sort of dangle stuff out there and it was never clear what her asset level was and whether she would go through with the dangle. ShawWife’s sister has several times asked to have the Florida house go to her early (like 5 years ago) and MIL will raise it and then drop it. No one ever saw the will.
I am now managing her finances as she was forgetting to pay bills and now know what the actual situation is. I wish I were not, but none of her children is remotely financially capable. Much easier to deal with.
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