Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
and you can plan and implement for contratian moves (but it's still risky, just not AS RISKY)
ETF's and available automated exit plan strategies and arbitrage use of options make this very simple. (For those inclined and capable to manage those tools). https://www.investopedia.com/article.../05/011905.asp
A few 'predictable' sectors have been quite profitable since Dec 2021.
Now you are talking about trading. I am no trader, never have been, never will be.
I definitely do not have any inclination to get into options.
Quote:
Originally Posted by StealthRabbit
Create a plan, and stick with it.
Change your plan ONLY when you have thoroughly understood why you want to change it. (and are prepared for the consequences)
But wouldn't it be accurate to say that the 6month (or whatever the term was) CD was absolutely going to return 5%?
You should look at the return over inflation - so while the return may be fixed, the return vs inflation will likely not be. Getting 5% fixed rate when inflation is 4% means only a 1% real return.
As far as the Op is concerned - invest what you are comfortable with because so many make the wrong decision if there is a downturn otherwise (unless a professional is controlling things). For most planning for retirement, having most of the money in stocks should be fine.
if we could miss the worst market days our records would beat warren buffetts .
not only can’t we miss the worst days , we are poor at missing the worst time frames .
our investing returns would be crazy high if we could .
but not missing the best days is easy ..just stay invested
University of Michigan Professor H. Nejat Seyhun analyzed 7,802 trading days for the 31 years from 1963 to 1993 and concluded that just 90 days generated 95% of all the years’ market gains — an average of just three days per year. miss those few days and you hurt your return .
To the OP - I don't know what your risk tolerance is, but pick a ratio of stocks/bonds and stick with it during bull and bear markets (adjusting for a glide path is a difference matter). Don't try to shift assets to time the market, because the vast majority of us will fail at that. Even the full time portfolio managers usually underperform the market indices.
Adding to what Mathjak said above and to my previous point:
From Hartford:
"About 42% of the S&P 500 Index’s strongest days in the last 20 years occurred during a bear market. Another 36% of the market’s best days took place in the first two months of a bull
market—before it was clear a bull market had begun. In other words, the best way to weather a downturn could be to stay invested since it’s difficult to time the market’s recovery."
For those of you who have soured on bonds recently, I just saw a table of 10 year Treasury annual returns and we are currently experiencing the only 3 year period where bonds have had a negative return since 1928, including a horrible -17.83% in 2022. So, this has been a historically bad time for bonds, but we are due for some positive returns in the next few years.
OP here, responding with answers to the questions I saw:
The Intelligent Investor by Benjamin Graham -- thanks for the recommendation, I've requested it from the library. I hope it's not written completely over my head.
Are we paying plan admin/management fees? I didn't think we were, but I will research this. There's not an obvious fee on the quarterly statements; should I be looking at the expense ratio for each listed fund?
Here are additional financial details:
Retirement target date? age 67, Jan 2035 (12 years, 4 mos)
Social Security: projected disbursement is 1,694/mo
401k: current balance is 143,785, projected disbursement is 3,315/mo
pension: 143,771, projected disbursement is 836/mo
If I retire at age 67 (2 yrs after him), my projected SocSec disbursement is 1,710/mo. I have no other investments.
Do you plan to roll 401k into IRA? We will research and consider.
What % of 401k is Roth 401k? 0% currently, we will research and consider.
How broadly is equity choices in 401k? I'm not sure what you're asking. These are the funds we're in currently:
CORE
Vanguard Retirement Savings Trust II (.47% balance mix, .11% contributions mix)
Vanguard US Large Cap Equity Index Fund (12.19% balance mix, 13.90% contributions mix)
Vanguard US Small and MidCap Equity Index Fund (19.94% balance mix, 25.83% contributions mix)
Vanguard US Bond Index Fund (.12% balance mix, .03% contributions mix)
SUPPLEMENTAL
Vanguard Wellington Fund Admiral Shares (25.57% balance mix, 3.02% contributions mix)
Vanguard PRIMECAP Fund Admiral Shares (9.54% balance mix, 11.96% contributions mix)
Vanguard Windsor Fund Admiral Shares (13.59% balance mix, 17.01% contributions mix)
Diversified Bond Fund (5.37% balance mix, 8.21% contributions mix)
3315 x 12 = $39780 annually. Wouldn't you empty the 401k very quickly with that withdraw rate?
This is how much I don't know -- do I have a different choice? We will not need all of that to live on. Upon hubby's retirement, would we roll it over into an IRA and draw from that as needed?
3315 a year in income or an assumption his 401k would grow to 1.4mm by retirement
I really am dumb as a bunch of rocks when it comes to this. If the current balance is $143K, we have 12 years to grow it. However, the Vanguard site says, "Your target monthly retirement income is $3,347."
When I click on "how we get your estimate," it says this:
This tool projects your monthly income at retirement based on your savings at Vanguard, estimated Social Security, other benefits provided by your employer, additional information you enter on your outside retirement assets and benefits, and investment return projections. All figures are shown in today's dollars.
Please note: The investment return projections are hypothetical in nature and based on historical data. Your future investment growth is simulated thousands of times to produce your estimate. In 85% of these simulations, your investments achieve returns that provide at least the level of income shown in your estimate. Your estimate is provided for educational purposes only and is not intended to provide a guarantee of attaining individual retirement goals.
Somewhere in this calculation there must be a factor for life expectancy or whatever.
I'm sorry, it's clear I don't know what I'm doing, nor am I even in the right headspace. It's probably best we dump all this on a fee-for-service financial advisor and let them guide us.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,060 posts, read 7,493,946 times
Reputation: 9787
Quote:
Originally Posted by StealthRabbit
Retirement target date?
% of total retirement assets in 401k?
Other retirement income sources?
How broadly is equity choices in 401k?
Do you plan to roll 401k into IRA?
What % of 401k is Roth 401k?
If you need those 401k funds for retirement cash flows...
Probably a good time to reduce equity exposure to ~50:50 until 5+ years into retirement
Lots of ways to learn.
All of the big 3 brokerages have learning centers.
Fidelity has many online seminars, and recordings are available.
Boglehead wiki
Make a plan.
Stick with the plan. (Have a defined and disciplined strategy)
Have high expectations of your responsibility and respect your performance.
It's not tough to do.
There is no perfect solution for all.
.
Quote:
Originally Posted by ERH
I really am dumb as a bunch of rocks when it comes to this. If the current balance is $143K, we have 12 years to grow it. However, the Vanguard site says, "Your target monthly retirement income is $3,347."
When I click on "how we get your estimate," it says this:
This tool projects your monthly income at retirement based on your savings at Vanguard, estimated Social Security, other benefits provided by your employer, additional information you enter on your outside retirement assets and benefits, and investment return projections. All figures are shown in today's dollars.
Please note: The investment return projections are hypothetical in nature and based on historical data. Your future investment growth is simulated thousands of times to produce your estimate. In 85% of these simulations, your investments achieve returns that provide at least the level of income shown in your estimate. Your estimate is provided for educational purposes only and is not intended to provide a guarantee of attaining individual retirement goals.
Somewhere in this calculation there must be a factor for life expectancy or whatever.
I'm sorry, it's clear I don't know what I'm doing, nor am I even in the right headspace. It's probably best we dump all this on a fee-for-service financial advisor and let them guide us.
Life expectancy is not given much weight in this matter in this scenario because, "Your target monthly retirement income is $3,347". In affect, Vanguard is annuitizing the portfolio to give you $3,347 monthly, given your inputs of current age, expected retirement date, expected death age, portfolio composition. This is probably a standard, Age- Initial Asset Base Income retirement projection scenario.
Some others: Age based, Health based, Variable asset based, Rentals, et al, and their combinations - permutations. See Wade Pfau's books.
YMMV
Last edited by leastprime; 09-02-2023 at 08:47 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If the current balance is $143K, we have 12 years to grow it. However, the Vanguard site says, "Your target monthly retirement income is $3,347." 
