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If you were 5 years out from retirement, would you cut your losses on your 401K stocks at this point and move to some guaranteed stable value Bonds? I can't complain about my overall 401K stock gains over the years. I have lost about 9K for the year which could be worse. I just have this feeling it's time to move to something less risk at this point.
Thoughts, suggestions?
Thanks gang!!
Peace
Richard (CW)
I stayed at a Holiday Inn...I'm only 36, but I intend on riding those type of things out. Curious to read others thoughts.
CW as any advisor will tell you, its all about risk tolerance. If you have saved enough and don't need the principal to grow, what you are suggesting may work. However, bond yeilds are low. As interest rates rise, bond values could decline. If you invest in bonds look for quality.
In my own situation I intend to be more heavily invested in stocks, than many advisors suggest. What I plan to do is sell enough stocks, mutual funds and ETFs to put two years of living expenses in a money market account. If market is in decline, I can draw ffrom the money market and not be forced to take a loss in a down market. When stocks are doing well, I can sell stocks, mutual funds and ETFs and leave my money market alone or replenish it to a two year spend. It is a somewhat risky strategy, but there is also the risk of out living your money if it is too safely invested.
But my guess is you could purchase 2-4 ETFs and come up with a good mix of investing in bonds and stocks that suits your tolerance for risk. If you have low risk tolerance a mix of 30-70 stocks to bonds wouldn't be bad.
Of course I'm not an investment advisor, but I read a lot. I have yet to meet an advisor who is as concerned with my money as I am. One suggestion if you are interested. The Fidelity website has a bunch of articles that speak to the question you raise. Under Fidelity Viewpoints there are a number of articles from Barron's, Kiplinger and many others on topics such as retirement investing, estates, saving and tax strategy. They are fairly easy reading for just about anyone. But, I would encourage you to go to the site, see what is there and then find a day when you can take an hour or so to read some of the articles. It will build confidence in how to invest.
I don't necessarily recommend Fidelity over any other brokerage. They are good, TRowe price is good and my favorite is Vanguard. But Fidelity has the most helpful website and that's important as well. Good luck and don't forget to congratulate yourself on getting to this station in life.
Mick thanks this is getting to be a subject that I concern myself with regularly.
While only 46 you can never be prepared enough.
Awesome!! Thanks guys!!! I looked at my stock performances they have been dismal for the year. I fear it will get worse as the interest rates decrease and as we transition to a new presidency. Obviously, one never knows if you have saved enough...I just have to decide if I am willing to risk further decline at this point. I may leave mine alone until December to see what happens. i will be holding my breath for the next few months for sure.
Thanks again!!
Peace
Richard (CW)
CW, one other point to remember. When you stay invested in your 401(k) as prices go low, your contributions are being invested at the right time. Additionally, you want to think twice before you sell stocks in a down market. Wait for when you see some recovery and sell on the upside.Quote:
Originally Posted by Carolinawildcats
Just got out of a meeting with our Fidelity rep. We have some work to do, but said we are ahead of most people our age. Mainly, I need to get the wife more on board with contributing through her employer...
To the MAX!Quote:
Originally Posted by KentuckyWildcat
My goal is to have so much money when I retire that I don't have to worry about it. I figure $4,000,000 outta do it.
Doing my best to get her to understand this......Quote:
Originally Posted by MickintheHam
With that much maybe you can help out your friends, too.Quote:
Originally Posted by Doc
In my case, I have run out of time. In just a few months I'll have to go with what I have already accumulated. It is a very sobering thought. I've got enough that I will be able to buy a cup of coffee everyday for the rest of my life. I just won't be able to afford Starbucks, Waffle House, maybe.
I have no friends!Quote:
Originally Posted by MickintheHam
I'm your long lost cousin, nephew, or something. Mom says hello :4chsmu1:Quote:
Originally Posted by Doc
I understand. At the least maybe you can be sure she is maximizing the company contribution, if any. Not getting to that level of contribution is leaving free money on the table. That company contribution also is a cushion for what you have invested. Good Luck!Quote:
Originally Posted by KentuckyWildcat
My plan is to turn to a life of crime or die young. Or die young due to my newfound life of crime more likely.
something white collar though, like selling micro-aggression insurance to college kids.
I suggest the TCCAT model, but do it on the web and do it nationally. Great looking website, hundreds of fake reviews over the past 5 years, huge discounts for spring break travel to all the popular destinations, discounts at the local bars, water sports rentals on the cheap. Nail down a few million in early 50% deposits and skip the country.
Wait, if your were to actually do this and I did not profit from doing this, could this post nail me for aiding and abetting, or being complicit to fraud and interstate wire fraud? Just forget I said anything and please delete this post.
TC had the right idea, but i think he could never bear to skip the country b/c of his love of Taco Tico. Like Aruba doesn't have tacos?
Thanks to everyone on this! I have learned from this thread that I am just going to leave my Wife when I retire since she fails to contribute to her max and go live with Doc ;)
Peace
Richard (CW)
I'm going to find some young rich heiress and let her keep me as her boy toy
Sounds like a plan to me lolQuote:
Originally Posted by Carolinawildcats
But I'm only moving in with Doc if he is staying Florida?
Sent from my SAMSUNG-SM-G900A using Tapatalk
Boarding at Doc's House is pretty good. Most boarders stay for years. You cand find beer in the fridge and play poker most any night with his son and the other freeloaders ..... Er boarders.Quote:
Originally Posted by KentuckyWildcat
I am moving everything to a stable value fund. After what I heard over the weekend, I don't see the market going any higher and my risk far out weighs my reward at this point in my life.
Peace
Richard (CW)
Probably not a bad call. I can't see the market going any higher in the short term. I expect it will drop some after either party is elected in October, seems like it always does.
That's a good move if you are adverse to risk. I'm planning to retire at the end of May in 2020. I think I'll roll the dice and not move to a more stable fund until mid 2018. That is subject to change as I get closer to that date.Quote:
Originally Posted by Carolinawildcats
I ran across an article at Fidelity Viewpoints, that while it doesn’t relate specifically to your question, it may be of general interest to those here who don’t know if they are saving enough. I cannot link the entire article, but here are some key points to know that Ibelieve are helpful.Quote:
Originally Posted by Carolinawildcats
“Key takeaways
Fidelity's rule of thumb: Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.
Factors that will impact your personal savings goal include the age you plan to retire and the lifestyle you hope to have in retirement.
If you're behind, don't fret. There are ways to catch up. The key is to take action.
How much do I need to save for retirement?
Learn more about our 4 key retirement metrics—a yearly savings rate, a savings factor, an income replacement rate, and a potentially sustainable withdrawal rate—and how they work together in the Viewpoints Special Report: Retirement roadmap.
View Larger Image
How much do you need to save for retirement? It's one of the most common questions people have. And no wonder. There are so many imponderables: When will you retire? How much will you spend in retirement? And for how long?
That's why we did extensive analysis to come up with age-based retirement savings factors that can help you plan—in spite of those uncertainties. These milestones are aspirational. You likely won't meet all of them. But they can serve as goalposts to help you make a plan to save enough to maintain your lifestyle in retirement.
Our savings factors are based on the assumption that a person saves 15% of their income annually beginning at age 25, invests more than 50% on average of their savings in stocks over their lifetime, retires at age 67, and plans to maintain their preretirement lifestyle in retirement (see footnote 1 for more details).
Based on those assumptions, we estimate that saving 10x (times) your preretirement income by age 67, together with other steps, should help ensure that you have enough income to maintain your current lifestyle in retirement. That 10x goal may seem ambitious. But you have many years to get there. To help you stay on track, we suggest these age-based milestones: Aim to save at least 1x your income by age 30, 3x by 40, 6x by 50, and 8x by 60. Your personal savings goal may be different based on various factors including 2 key ones described below. But these rules of thumb can provide a starting point to help your build your savings plan, and assess your progress.2,3
1. When you plan to retire
The age you plan to retire can have a big impact on the amount you need to save, and your milestones along the way. The longer you can postpone retirement, the lower your savings factor can be. That's because delaying gives your savings a longer time to grow, you'll have fewer years in retirement, and your Social Security benefit will be higher.
Consider some hypothetical examples (see graphic). Max plans to delay retirement until age 70, so he will need to have saved 8x his final income to sustain his preretirement lifestyle. Amy wants to retire at age 67, so she will need to have saved 10x her preretirement income. John plans to retire at age 65, so he would need to have saved at least 12x his preretirement income.
Of course, you can't always choose when you retire—health and job availability may be out of your control. But one thing is clear: Working longer will make it easier to reach your savings goals.”