Just came across this article from Bernstein. I see the logic of the take money off the table if you've hit your number policy. But I do wonder how many people it really applies to. How many people really manage to save 20 to 25 times their yearly expenses by retirement age? I suspect a lot of people are more in a grey area, somewhere short of that goal.
At the same time, despite the fact that people are living longer, it is usually not noted that this does not mean that they are necessarily healthier and full of more energy at those advanced ages. So Bernstein's advice to just keep working if you haven't hit your number, may be unrealistic. This could depend a lot on the nature of one's job, one's employer, and economic circumstances.
So given that a lot of people may reach retirement age, not have hit their number, and not have good options to keep working, I wonder how Bernstein's advice squares with the also often discussion of safe withdrawal rates and the use of calculators like Firecalc that look at the odds of running out of money before retirement. I feel a comment from Jerry_lee above in this thread sums up the counter-balancing concerns:
Jerry_lee wrote:remember, risk can show up (at least) two ways: sustain losses so big and permanent that your spending capacity is impaired, or invest so conservatively that your future spending requirements far outstrip your assets ability to keep up. In my opinion, the second is far worse, as you will see the inevitability of it play out slowly over time
Indeed, how do we square Bernstein's suggestion about taking money off the table, with things like Firecalc that seem to show that portfolios with more equity risk often have better odds of lasting through retirement, at a given withdrawal rate? In other words, overly conservative investments can actually increase the odds of running out of money. It seems to me that Bernstein doesn't really discuss this side of the coin.
Interested in people's thoughts on the question.
