How the hell are we supposed to retire?

[terrabike01]

Well, so much for inflation dying down in a few months like some suggested in early summer...

Highest level now since 1990!

https://www.marketwatch.com/story/b...s-lost-control-of-consumer-prices-11636653480

Sadly get used to the inflation as long as Mr Magoo is in office. This is all self inflicted. Gas prices, supply chain issues, labor issues, car shortages, etc. Guy doesnt even know the difference between a test and a pill. Even my garbage pickup went up because the company is charging a fuel surcharge. We are soooo screwed.

 

[Patrick]

So what? You get less upside during growth, less downside during contraction. Still get growth.

I'll stand by the issue i've outlined.
30 years is a long time.

 

[Patrick]

Sadly get used to the inflation as long as Mr Magoo is in office. This is all self inflicted. Gas prices, supply chain issues, labor issues, car shortages, etc. Guy doesnt even know the difference between a test and a pill. Even my garbage pickup went up because the company is charging a fuel surcharge. We are soooo screwed.

Did you get the memo about the politics thing?

I know it was somewhat pandemic specific, but let's expand it a bit and not blame a global supply chain issue during a pandemic on 1 person

Stick with discussing/disagreeing with policy decisions, and alternate solutions.

 

[rick81721]

Easy peasy- change the date to a later retirement date with relatively more equities if you want more potential growth than overweight bonds.

Exactly - you can have any mix of stocks vs bonds that you want.

 

[rick81721]

I'll stand by the non-issue i've outlined.
30 years is a long time.

FTFY

 

[Santapez]

So here is the problem. You go into income mode at 65 and live 30 more years. You miss at least 2 growth cycles.

Change your living expenses to match your draw in down years. Cause you don't want to be making 2020 money in 2050.

I'll counter argue some of the go-all-in-on-bonds thought.

If you're retiring with a healthy income from dividends & Social security and have enough liquid assets to cover you for awhile if market conditions go bad, why move out of securities? Especially if there's a tax hit on taxable accounts.

If you're expenses are fully covered you can deal with drops in the market by just watching them happen assuming dividend drops don't affect you too much.

Like any other plan, it's situation dependent on the individual.

 

[Cassinonorth]

Did you get the memo about the politics thing?

I know it was somewhat pandemic specific, but let's expand it a bit and not blame a global supply chain issue during a pandemic on 1 person

Stick with discussing/disagreeing with policy decisions, and alternate solutions.

Ban hammer time!!

 

[Bike N Gear]

I'll stand by the issue i've outlined.
30 years is a long time.

A More Modern Approach​

If you have at least a moderate risk tolerance, forget about bonds and your age, and try the 15/50 stock rule. If you think that you have more than 15 years left to live your portfolio should consist of at least 50% stocks, with the balance that's left placed in bonds and cash. This approach can help you maintain a steady balance between risk and reward.


This isn’t a new concept by any means. The 15/50 portfolio approach, which is first split 50/50 between stocks and bonds, has been around for decades.

 

[rick81721]

A More Modern Approach​

If you have at least a moderate risk tolerance, forget about bonds and your age, and try the 15/50 stock rule. If you think that you have more than 15 years left to live your portfolio should consist of at least 50% stocks, with the balance that's left placed in bonds and cash. This approach can help you maintain a steady balance between risk and reward.


This isn’t a new concept by any means. The 15/50 portfolio approach, which is first split 50/50 between stocks and bonds, has been around for decades.

Does anyone do bonds % by age anymore? We aren't close to that amount - actually closer to the opposite.

 

[Bike N Gear]

Does anyone do bonds % by age anymore? We aren't close to that amount - actually closer to the opposite.

Don't know. My mother in her 80's is only 30% bonds. Hasn't been an issue.

 

[Fire Lord Jim]

Does anyone do bonds % by age anymore? We aren't close to that amount - actually closer to the opposite.

The bonds % by age rule is foolish without considering size of your total portfolio and your spending. If you have ten years of spending in cash and fixed income, you can likely have everything else in equities. The percentage will decrease as the asset size increases.

 

[Santapez]

A lot of these bond rules are from when they paid actual interest and at an amount that didn't significant trail inflation.

 

[kidzach]

How about I Bonds ? Was considering this move starting January. Especially with more inflation coming our way.

 

[w_b]

How about I Bonds ? Was considering this move starting January. Especially with more inflation coming our way.

Couple caveats we discussed last week, but currently earning 7.12%, worth a further look. Prolly want a minimum 5 yr window.

 

[rick81721]

How high will it fly? 7%!!

https://apnews.com/article/consumer-prices-inflation-c1bfd93ed1719cf0135420f4fd0270f9

 

[Santapez]

How high will it fly? 7%!!

https://apnews.com/article/consumer-prices-inflation-c1bfd93ed1719cf0135420f4fd0270f9

On one hand we're discussing getting excited about 7% returns on bonds (that are subject to taxes), on the other hand 7% inflation...

Not so great for savers.

 

[Patrick]

taking a trailing snapshot against an uncertain future exponential.

spend 7% less and cancel inflation
I'm conquering the spending side with dry january. that should cover it.

 

[w_b]

Move 7% more from fixed income to mid cap equity. F that inflation. The only thing inflating is my NAV.

 

[Dave Taylor]

Inflation is temporary.... temporary and whacky prices from supply issues are causing this. Once prices come down so will inflation.

 

[stb222]

taking a trailing snapshot against an uncertain future exponential.

spend 7% less and cancel inflation
I'm conquering the spending side with dry january. that should cover it.

But offset by “make up for lost time February”