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If the stock market were to crash again, like it did in 2008, and the time it takes to recover your losses takes X number of years, and you will retire before then, would it be better to cash out in that case or put your money elsewhere?
Another scenario: What if another crash were to hit and it occurs during retirement? Would it be better to cash out in that case?
During the 2008 crash, I knew some people who lost half of their 401K, so just wondering, based on the above scenarios, if the proper course of action is still to hold tight and keep the money in the 401K.
I was retired early with a fairly good monthly annuity by 2001 but I lost a significant amount of savings in 2001 after 9-11 and I lost a lot more (on paper) in home equity in the 2008 real estate downturn. After 9-11, I had taken what little cash I had left and bought inexpensive real estate in a long stable real estate market. My thought was I could not stand another financial hit during the time I had remaining so I would buy something they have not yet learned to print more of, land and property.
Although we too are worried about another collapse, my wife still has a 401K and an IRA. Short of moving some of her IRA into precious metals, we're staying put there until she retires in another year. Should she lose most of her money in another crash, we have two homes that are paid for. One home is in a low property tax state (NM) and one is in a very high property tax state (TX). However the values of each home are balanced between those two facts, i.e., the high value home is in a low tax rate NM city and the low valued farm is in a high tax rate rural TX county.
Unfortunately no one here can tell you what to do with your money but I would always recommend a place to live that is yours free and clear whatever happens. All the folks here can tell you is what they did with their own money during the downturns and how it turned out for them.
It sounds like you will do okay. You're at least giving it some thought.
If the stock market were to crash again, like it did in 2008, and the time it takes to recover your losses takes X number of years, and you will retire before then, would it be better to cash out in that case or put your money elsewhere?
Another scenario: What if another crash were to hit and it occurs during retirement? Would it be better to cash out in that case?
During the 2008 crash, I knew some people who lost half of their 401K, so just wondering, based on the above scenarios, if the proper course of action is still to hold tight and keep the money in the 401K.
This is why you hedge your portfolio or at least have long put positions as insurance as a minimum. There are multiple ways to hedge a portfolio, options is just one choice that usually requires the minimum outlay/risk.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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+ 1, txgolfer130
exactly what we did Nov 2008. A bit too late for the Great Recession but prepared for the next recession.
Current age 67/70. As you surmise a recession even half of what we saw, would be a disaster for near retirees and retirees.
What if another crash were to hit and it occurs during retirement?
During the 2008 crash, I knew some people who lost half of their 401K, so just wondering, based on the above scenarios, if the proper course of action is still to hold tight and keep the money in the 401K.
It is unwise to have most of your money invested in the stock market when you are close to retirement.
It is too volatile. If it crashes, you may not have enough time to recover your funds before you retire.
If the stock market were to crash again, like it did in 2008, and the time it takes to recover your losses takes X number of years, and you will retire before then, would it be better to cash out in that case or put your money elsewhere?
Another scenario: What if another crash were to hit and it occurs during retirement? Would it be better to cash out in that case?
During the 2008 crash, I knew some people who lost half of their 401K, so just wondering, based on the above scenarios, if the proper course of action is still to hold tight and keep the money in the 401K.
going in you should have the allocation you are comfortable with . it is not the amount of the drop that hurts early on .it is the length of years it drops for .
2008 was basically a non event for retirees who stayed the course. it was a quick v-shaped recovery .on the other hand even a modest u-shaped recovery can do damage if it goes on long enough .
a safe withdrawal rate is called that because it is already based on the worst of the worst outcomes.
if you are really nervous do a rising glide path in . before retirement ,when markets are up go down to about 35% equities and then every two years go up another 2% until you reach your allocation .
Am retired. Wife still works. Our IRA's produce income. Doesn't matter if the value goes up or down.
can i keep paying you the income and keep your principal ? in fact i will offer you a bit more income if down does not matter as long as the income flows .
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