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it all depends on the draw rate you hope to get. being to conservative has crashed and burned more retirements than being to aggressive in diversified investments .
basically anything more than 2-1/2%-3% inflation adjusted draws would be risky with less than 35% in equities . .the sweet spot is about 50% with 40-60% the most popular range for 4% inflation adjusted draws going out 30 years . going out longer would require more equities . .
i could never see working ,saving and investing my entire life so i could live on a 2-1/2-3% draw rate . heavy cash positions are fine when you have a pension that takes care of most of your spending needs .
Last edited by mathjak107; 08-09-2017 at 06:25 PM..
My financial guy looked at how my company was allocating my 401K. He said it was great for younger workers who were farther from retirement, but not so good for me who was close to retirement. When he was able (when I turned 59) he moved a big part (not all) of my 401K money from the company's account into an investment account that he could allocate much more appropriately for someone close to retirement.
My financial guy looked at how my company was allocating my 401K. He said it was great for younger workers who were farther from retirement, but not so good for me who was close to retirement. When he was able (when I turned 59) he moved a big part (not all) of my 401K money from the company's account into an investment account that he could allocate much more appropriately for someone close to retirement.
Just because you are close to retirement doesn't mean there is a one-size-fits-all allocation. You still have to look at your needs, length of retirement, tax situation, etc.
My financial guy looked at how my company was allocating my 401K. He said it was great for younger workers who were farther from retirement, but not so good for me who was close to retirement. When he was able (when I turned 59) he moved a big part (not all) of my 401K money from the company's account into an investment account that he could allocate much more appropriately for someone close to retirement.
And just what was this so called appropriate allocation?
I'm 3-4 years from retirement and my 401k is almost entirely in equities. . . Because . . . I have a pension plan I was grandfathered in to and that is in essence my money market account.
The plan is to take the lump sum and finance the 8 years from 62-70 to max my SS. I'm leaning towards a very conservative investment for the 1st 2 years while we wait for my wife to turn 62 and collect SS, she has a small pension too. I'll look for something relatively safe - I've used 2% as a guideline - for the other 6 years while letting the former 401k go with a higher equity allocation and hopefully higher returns and growth.
The luxury of the pension, either as an annuity or as a lump sum is that combined with SS it covers our monthly expenses with room to spare. From my readings, many retirement investment specialists pretty much say you can go higher, even 70-30 in equities if you have pension funds.
At "retirement" (company RIF at age 57) I moved 1/2 my 401k into Fidelity stable value fund, 25% is still in the Fidelity "2020 Retirement" account, and 25% is in the Fidelity S&P 500 account.
I'm up over $50k this year so far, without putting in another dime.
I haven't had to touch it at all as of yet, as I have enough severance left to last at least until the end of this year, even after paying off my house. I turn 59 in early December. I could actually access it with no penalty right now, since I was 'retired' in a company RIF after the magic age of 55, but why do so when I can let it all ride a bit longer?
it all depends on the draw rate you hope to get. being to conservative has crashed and burned more retirements than being to aggressive in diversified investments .
basically anything more than 2-1/2%-3% inflation adjusted draws would be risky with less than 35% in equities . .the sweet spot is about 50% with 40-60% the most popular range for 4% inflation adjusted draws going out 30 years . going out longer would require more equities . .
i could never see working ,saving and investing my entire life so i could live on a 2-1/2-3% draw rate . heavy cash positions are fine when you have a pension that takes care of most of your spending needs .
I would say if a pension takes care of most of your spending needs, you would be much better off to put everything in stocks.
you could go heavy in to stocks but you also have the option of not .that is the nice thing about having an income stream that is not market dependent that meets your needs . if you go heavier it is not out of necessity . some have the attitude of why keep playing if you already won the game .
pension or not we can all go heavier if we have the stomach . even 100% equities has had a terrific success rate for retirees . but the reverse is not true.being to conservative has sent many retirements in to the retirement grave yard way to soon .
90% is considered the minimum success rate .
Last edited by mathjak107; 08-10-2017 at 02:09 AM..
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