No. of Recommendations: 2
Should Social Security (and pensions) be considered an asset and factored into a retiree’s investment allocation?

Well yes, unless you are going to decline Social Security. The question is how factor it in.

My belief is the dominate rule should be attempt to avoid the dreaded Buy High Sell Low trap.

We keep enough Cash equivalents and other income (Social security income, Bond fund dividends) that we can go for two years without selling any equity holdings (all our portfolio is mutual funds).

Our last paycheck was dated April 30, 2008 - at which time we had a 15 to 18 month cash reserve plan. The great recession convinced me to extend the cash to 24 months.

During 2008, unlike lots of "experts" I was not able to see July as the start of the mess. Similarly I was not able to see in the middle of March the bottom had been reached. But with 20/20 hindsight I can see both our portfolio and the S&P 500 had recovered to a breakeven value about December 2010.
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