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Going to an all cash-type portfolio just seems a bit extreme... The real secret to living on investments is to leave them invested

I agree, but it's not me with the funds, it's a friend of mine, and he has his own ideas and safety level. He was originally looking at CD ladders, but the indications are that you can lose principle if you do that in a 401K, so he was looking for alternatives. I thought this board might have alternate suggestions.

His main concern is a fear that the money he needs some time in the next 11 years will be gone when he absolutely needs it, if he leaves it where it is. He has a chunk of the money in stock indexes, but if it goes down by 50% or some such thing, and doesn't recover for 10 years, he'd be in trouble with his current portfolio, I think. I haven't looked at it, but that's how it sounded.

Anyway, I don't exactly have this concern myself - in the sense that I'll just have to figure out what to do if the stock market goes down like that. It will not be pretty, but the alternative (not investing in stocks) is also not pretty.

Does that help you?

Well - you mentioned annuities. I have also not investigated annuities ever. But in fact, my mom has an annuity via TIAA-CREF and it has been pretty good for her, so I will mention that to him as a research area. With all the usual caveats about annuities.

During a down-turn, like the 2007 to 2009 event, we lived on the cushion, took it down to about 1 year remaining. When things recovered, it was replenished.

So you had a cash cushion of about a year, and what if the market had not recovered but had slumped for say another 5 years? 10 years? This is what concerns him.

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