People live around 20 years in retirement, but it seems all the attention is given to the young with lots of years ahead, I belive people living 20 years after retirement qualify for long term investment, but we get very little information for our "situation"Any suggestions?db
<People live around 20 years in retirement, but it seems all the attention is given to the young with lots of years ahead, I belive people living 20 years after retirement qualify for long term investment, but we get very little information for our 'situation'Any suggestions?>I think one reason for the lack of emphasis, even in this folder, for the older investor is that most of the participants are younger. I am 59 1/2 or so, so am aware of the disquiet that this may cause you.I think there are a couple of things to consider. First is that you do not wish to depend on dieing only 20 years after you retire, so you better have a longer-range plan than that in mind. You can arrange to never run out of money by having enough invested so you never touch the principle (preferably let it grow a little faster than long-term inflation after taxes). I know that for me, I doubt I would have the luxury of waiting 25-30 years for the market to recover after an unpleasantness such as happened in 1929 - 1931. An 80% drop! That would be as if the DJIA dropped 6400 points or so instead of the silly little 550 or whatever it was that shook up all the talking heads and astrologers.The other thing is that all investors, not just the older ones, should have some money around to live on for the duration of any likely market unpleasantness. There is a little social security (that I do not think will fail, but it will not become adequate as a sole source of income either), and you should have 6 months or so (perhaps up to 5 years or so as we get older) in something more liquid than a volatile stock portfolio). You have to spend money every month even if the market is down. When it is down, use the more liquid investment. Just do not put too much into it. I would hate to have 5 years supply of money in a money market or even treasury bonds. At present, I have about 2 years in mostly 6% savings bonds (2 years of squeaking by, less than one year's salary when I was working), and some money in Swiss Francs (about the same amount). But I think a case could be made for keeping it all in stocks.Recently Robert Sheard suggested subtracting your age from 100 and putting that amount into a growth portfolio and the rest into a value portfolio. Thus, as you get older, your investments would become more conservative, but not something a lousy as bonds which, after taxes, just barely keep up with inflation.The second
Greetings, DB, and welcome.<<People live around 20 years in retirement, but it seems all the attention is given to the young with lots of years ahead, I belive people living 20 years after retirement qualify for long term investment, but we get very little information for our 'situation'Any suggestions?>>I agree this is a subject that receives little attention on these boards. That's because those of us born when slide rules were king seem to spend so little time on-line. However, that doesn't mean the topic doesn't get and hasn't been addressed. You will find numerous messages in this folder and others that talk to this issue. For a start, just read over messages 228 through 250 (Subject: Retiree Portfolio) and 292 through 295 (Subject: Drawdown) in this folder. They should give you some food for thought. And then ask questions on whatever bothers you. You can be sure when you do, many of us are more than willing to offer you our opinions.To me, there are three over-riding concerns when I reach retirement. First, it is indeed long-term, and I don't want to run out of money. Second, inflation is my enemy, so I must do all I can to protect the purchasing power of my money if I expect to maintain my standard of living. Lastly, I must avoid the natural inclination to be overly conservative in my investments because short-term market blips cause me undue fear of losing my retirement stash. All three are personal issues each of us must confront on our own. I assure you there is no easy, one-size-fits-all answer, nor is there a simplistic rule of thumb that says by putting X% of your portfolio in bonds and Y% in stocks, everything will be hunky-dory. Heck, if there were, the world would have far less CFPs like me around, and I certainly don't want to change careers at this stage of life. Nevertheless, through research and a thorough analysis of our own risk-taking abilities, we can and will arrive at an appropriate mix that fits each of us as individuals. What do I suggest? Keep on reading, researching, and asking. In time, you'll find the answer that's right for you.Regards…….Pixy
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