How Much Do You think You Need to Retire? What Age Will You/Spouse Retire? Investment and General Retirement Issues (Part 3)

Parent Cafe
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Our strategy has always been to do nothing betting on the fact that the market, even through extreme periods of volatility, always recovers and trends upward over time which is why buy-and-hold is the best advice and going to cash is risky. At what point do you intend to get back in? What is your strategy for timing the market? Jumping in and out has not been a successful strategy for anyone we know, and cash is virtually certain to be a losing investment over time.

These are uncertain times for sure, but the market is resilient. Itā€™s seen the crash of ā€™29, the Great Depression, two world wars, Korea, Vietnam, the Cold War, The Bay of Pigs/Cuban Missile Crisis, civil unrest, riots, Watergate, the crash of ā€™89, the dot-com bubble burst, the 2008 recession, Influenza, SARs, MERs, and COVID. And through it all, the market recovers and continues to hit new highs.

Hereā€™s a good article from Morningstar with a table listing the largest real declines in U.S. stock market history. The bottom line:

Still, even if you are looking down the barrel of the next Great Depression, history shows us that the market eventually recovers.

But since the path to recovery is so uncertain, the best way to be prepared is by owning a well-diversified portfolio that fits your time horizon and risk tolerance. Investors who stay invested in the market in the long run will reap rewards that make the turmoil worthwhile.

My strategy: Turn off the noise, enjoy an ice-cold martini, read some good books, and feed the chipmunks.

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We are going ahead with our plans for a short Florida trip. We have a short window for a vacation and who knows what the future holds. I donā€™t plan any big changes.

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If anything, we are taking risks. After years of FAs telling dh that he could quit one or both of his PT jobs, he gave notice on the more lucrative one Friday. :grimacing: Seems like not the best time to give up that chunk of money, but heā€™s already worked two years longer than he was told he had to so I smiled and nodded when he said he finally wanted to do it.

Iā€™m meeting with the FA later this month, and Iā€™m going to try to talk him into letting me get more stocks. Iā€™ve always been a buy-and-hold girl so the downturn doesnā€™t really bother me, even in retirement. The concern of what is going to happen with SS and Medicare is a bigger issue, but itā€™s not one that I can control so Iā€™m not losing sleep.

We did have a wedding OOS we planned to attend in May, but itā€™s two weeks after DILā€™s law school graduation in the same city so we decided to not go to the wedding. Two trips in two weeks seems a little much. Saving the money on airfare and hotel doesnā€™t hurt.

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With most of my money, my retirement account, I am definitively a buy and hold kind of person. I think in my over 35 years I changed my investments less than 5 times (maybe less than 3). BC I didnā€™t re-allocate, I have a lot in stocks, bc theyā€™ve done so well for many years. Iā€™ve thought for months I should reduce that, but now that the market is down I donā€™t plan to act on those thoughts.

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Maybe what I need to do is find a way to not have to put a huge deposit on it right now, but a minimal one. The company Iā€™m looking at wants much of it right up front to get the best deal, but maybe I just donā€™t have to get the best deal. I really want to go, this Antarctic cruise sounds epic.

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We continue with our written investment plan and Iā€™m finding how we balance uncertainty with continuing to live a full life.

So far that has meant buying summer concert tickets (holy moly good seats are expensive!) but holding off on our tentative European travel plans.

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I should try that. Hard alcohol instead of red wine, books instead of tv, and apparently weā€™re feeding the mice. Seven caught in the kitchen in the last two days. Twenty years in this house and never had a problem before. What is going on!?

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I think you never know what they future holds, take the trip to Antarctica

Our financial advisor told us to take the money out now at the highest if we had plans for a big expenditure

Do not ask me the reasoning because Iā€™m stupid.

We donā€™t have large wants. Will do what we always do. The market goes up so it goes down. We will hope the average evens out

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@busdriver11 Iā€™ll be interested in your progress on the VA Claim.

My husband started paperwork in summer 2023 for a VA Claim, months before he died. Then, they transferred it to me and I have been asked for additional information three times. Most recent request was in January.

Iā€™m considering hiring a lawyer the next time they send another request for more info.

Let us know if it is successful!

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Good luck to you, what a pain! I donā€™t think I would spend the money to hire a lawyer, I thought there were VA service reps that would help you for free?

Iā€™ll let you know how my claim goes, but another vet told me that if one was a pilot and filed for tinnitus, you automatically got it, no medical records required. Likely because we all got tinnitus and it was the norm to always pretend there was nothing wrong so we didnā€™t lose our medicals. I think the PACT act made it easier to get benefits.

Iā€™m very sorry about your husband.

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Thank you.

Iā€™d love to file a claim for my tinnitus, too! I blame chemo, but my docs donā€™t agree.

Iā€™ve sent a PM on the VA status.

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Yes, I finally flipped my 60/40 to 40/60 - just a little more conservative but donā€™t plan on taking out retirement until I have to and that is 4 or 5 more years (donā€™t recall if itā€™s 72 or 73)

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I have spoken to both financial advisors. We had shifted from 70/30 to 60/40 and to a better stock mix with the first.

With the second, we just did some modeling and the first cut is that if we had a one-time but permanent loss of 25%, we would be fine ā€“ although the amount we would leave to our kids would be significantly lower. We have done very well with gold ā€“ a significant allocation that has more than doubled ā€“ and I am thinking about increasing it.

The financial models assume I will stop working this year. My plan is to continue working as long as I am interested (I doubt I would ever lose interest) and able (this is mental as well as physical). Assuming I work until 80, the existing analysis would omit a lot of income.

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H wants to take some of his later target date 401k funds and drop them down a level (to the next less-risky target date). Weā€™re laddered with target dates in 2030, 35, 40 & 45. Iā€™m meh about it. My feeling is that we should keep the longer term targets the way they are, as they have the time and ability to rebound. His pension and SS, even if he has to take it earlier than planned, plus cash in non-retirement vehicles should make us ok if we need to let the 401k recover. Heā€™ll be 64 this summer, plans to continue working til at least the end of 2028.

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Depends on when you plan to retire.

My kid is out of college ahd yet his 529 is still invested for years out.

If you need money sooner or just have trouble sleeping through volatility, he may be into something.

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Sounds like a lot of complexity for little gain. For example I looked up Fidelityā€™s target dates funds and the difference between 35 and 45 is minimal. Canā€™t see how it moves the needle or provides any ballast in a market crash.

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H is on the fed TSP plan, no mutual funds. He also has a pension, which means we can keep the 401k in the market a bit longer. The ladders are a mix of govt short-term treasuries, fixed income, S&P, small cap and international indexes. Thereā€™s a gradual shift over time, and by the time the target date is reached, the focus is on asset preservation and income. This year, the landing numbers for the 2025 target fund is at 67.99 Govt, 5.63% fixed, 13.79 S&P, 3.43 small cap and 9.28 intā€™l. H likes the set-it-and forget-it aspect of the target funds. He took his balance in 2019, divided it equally into three of the target funds and designated all future contributions to go into the 2045 fund. I have my rollover IRA in mutual funds and rarely trade. Have ridden out every bump in the past 40 years.

We both like to SWAN! I was a pension/401k administrator and heā€™s a financial regulator. The only individual stock we own (a utility) was bought in the mid-80s back when he was a financial systems analyst. His job precludes various industry sectors and financial instruments, so we have nothing wild in our portfolio. We grew up in very financially challenged families, so weā€™ve been risk-aware from the beginning.

Our ballast is outside the 401k. Weā€™ve been working on building that since the guys finished college.

H says heā€™s retiring at 67.5. Whether he quits working is another question. Work is his life.

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So have we. I guess thatā€™s why market fluctuations donā€™t bother us. We expect them, and our FA modeled a 20% pullback every eight years into our retirement planning, so the amount we have should withstand that volatility. We also didnā€™t include SS in our model, but our combined SS, which we both took at 62, is ample enough to live on. Of course, we donā€™t know what will happen to it in the future but, for now, that amount means weā€™re only drawing about 2% from our funds. We have more now than we did when we retired eight years ago.

Though we didnā€™t exactly purchase our cabin as a disaster plan, itā€™s become part of our SWAN scenario. If we lost the entire portfolio and could sell our primary house (for anything), we could live quite well at the cabin on SS alone as it costs us only electricity and a small property tax bill. (And Iā€™m happier at the cabin than in our primary home, but donā€™t tell DH.) If the stock market became unrecoverable and SS went away completely, that would be another story but, by that time, I think the world would be a very different place. The likelihood of that disastrous combination is too remote to bother us.

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What is SWAN?

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I just looked it up! Sleep Well at Night.

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