Looming Retirement & Market Jitters

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TresBelle65
Posts: 65
Joined: Sun Apr 12, 2015 2:44 pm

Looming Retirement & Market Jitters

Post by TresBelle65 » Fri Oct 20, 2017 5:58 am

I am planning to retire from a second career (federal employee, 10 years of service) in 18 months, give or take a month or so. Would like to retire today, but holding out for eligibility for lifetime healthcare coverage in retirement (requires a minimum of 10 years of service).

I'm 56, divorced and plan to live on approx $50K in retirement, will need to purchase a home at some point, as I currently rent. I could live on less than $50K if I have to.

Total portfolio value is $1.4M, excluding the value of two pensions

$600K +/- in taxable accounts (a mix of cash, treasury bonds, CDs and stock index funds)

$800K +/- in tax deferred or non taxable accounts. (Federal TSP, Roth IRA invested in index funds)

The two pensions, when I start them in 2019, will be worth approx. $22K per year in income. My SS should be close to the max when I decide to start taking it. Was married 10 years + plus but a FA recently mentioned something about a law recently passed, so that this no longer matters.

I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.

For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.

Seeking to know what others, also soon to retire, are doing, if anything, given the current conditions.... thanks

runner540
Posts: 399
Joined: Sun Feb 26, 2017 5:43 pm

Re: Looming Retirement & Market Jitters

Post by runner540 » Fri Oct 20, 2017 6:21 am

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
I am planning to retire from a second career (federal employee, 10 years of service) in 18 months, give or take a month or so. Would like to retire today, but holding out for eligibility for lifetime healthcare coverage in retirement (requires a minimum of 10 years of service).

I'm 56, divorced and plan to live on approx $50K in retirement, will need to purchase a home at some point, as I currently rent. I could live on less than $50K if I have to.

Total portfolio value is $1.4M, excluding the value of two pensions

$600K +/- in taxable accounts (a mix of cash, treasury bonds, CDs and stock index funds)

$800K +/- in tax deferred or non taxable accounts. (Federal TSP, Roth IRA invested in index funds)

The two pensions, when I start them in 2019, will be worth approx. $22K per year in income. My SS should be close to the max when I decide to start taking it. Was married 10 years + plus but a FA recently mentioned something about a law recently passed, so that this no longer matters.

I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.

For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.

Seeking to know what others, also soon to retire, are doing, if anything, given the current conditions.... thanks
TresBelle, I am not soon to retire, but if I may comment anyway:

It sounds like your pensions ($22k) plus the social security will cover your $50k in expenses once you reach FRA. You need your assets to cover the first ~8-10 years to supplement the pension. So you may need ~$30k/year x 8-10 years = $240-300k from your portfolio. After that, what is your portfolio to be used for? (legacy, buying a house - see below, upgrading retirement lifestyle, etc.)

The markets could drop any day, for the tax cut or myriad other reasons. If you are uncomfortable, maybe your AA should be lower. However, there is a fine line between marketing timing and adjusting your AA.

Why do you "need" to buy a home? That is going to take a big chunk of your assets, and tie them up. If you want to buy, fine, but don't buy unless you actually want to be a homeowner in retirement.
P.S. Who is the FA? Don't just take his/her word for what the SS policy is. Ask the good folks here and do your own research, too.

Dottie57
Posts: 2236
Joined: Thu May 19, 2016 5:43 pm

Re: Looming Retirement & Market Jitters

Post by Dottie57 » Fri Oct 20, 2017 6:25 am

Stop listening to those who know what the market will do.

Make sure you have enough fixed income to pull you through a bad economic time. I have money in cds and bonds. Should carry me to Ss.

Good luck.

David Scubadiver
Posts: 522
Joined: Thu Mar 24, 2016 8:40 am

Re: Looming Retirement & Market Jitters

Post by David Scubadiver » Fri Oct 20, 2017 6:51 am

The market is not sustainable because we peaked and will not go higher in your lifetime? If so, sell it all and go short. Most people believe that while the market is at an all time high, that is merely to be expected. It won’t go up without going down, but the long term trend has been to hit an up so it is always at an all time high or approaching one.

But you do need to assess your likely reaction to a 10 or 20% decline and how that impacts your financial planning.

gd
Posts: 1226
Joined: Sun Nov 15, 2009 8:35 am
Location: MA, USA

Re: Looming Retirement & Market Jitters

Post by gd » Fri Oct 20, 2017 7:21 am

"news reports describing" impact of ill-undefined future tax policy? I think you mean "speculation", motives included.
I have equivalent concerns if it does happen. Call it a draw?

(edited mildly political statement)

Jack FFR1846
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Joined: Tue Dec 31, 2013 7:05 am

Re: Looming Retirement & Market Jitters

Post by Jack FFR1846 » Fri Oct 20, 2017 7:43 am

David Scubadiver wrote:
Fri Oct 20, 2017 6:51 am
The market is not sustainable because we peaked and will not go higher in your lifetime? If so, sell it all and go short. Most people believe that while the market is at an all time high, that is merely to be expected. It won’t go up without going down, but the long term trend has been to hit an up so it is always at an all time high or approaching one.

But you do need to assess your likely reaction to a 10 or 20% decline and how that impacts your financial planning.
The market has already peaked more than 16 times this year. This is normal for the market if you limit yourself to looking at only the last 100 years. It reaches a new high, on average every 18 days. You should stop looking at financial news, the markets, your accounts and probably even Bogleheads. Remember the Fidelity 401k study that found that the property of people who by far did better than any other were that they were.......dead.
Bogle: Smart Beta is stupid

MJS
Posts: 20
Joined: Sat Aug 05, 2017 10:55 pm

Re: Looming Retirement & Market Jitters

Post by MJS » Fri Oct 20, 2017 7:56 am

Getting a mortgage after retirement is not impossible, just difficult to very difficult. The down payment and interest rates tend to be higher. Consider buying your house now, while still employed. (Do not mentioned your retirement plans to the loan officer :-) Good luck!

retiredjg
Posts: 30554
Joined: Thu Jan 10, 2008 12:56 pm

Re: Looming Retirement & Market Jitters

Post by retiredjg » Fri Oct 20, 2017 8:03 am

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.
If you have enough money to retire, a steep drop, even something like 2007 - 2009, will not be a long term problem. And you have more than enough money to retire. In fact, if you plan to live on $50k a year, you have way more than enough in my opinion.

For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.
Suggest you go to 40% stocks and 60% bonds and stay there.


I suspect your "problem" is simply fear of the unknown. Retirement seems like such a big black hole while you are still working. Trust many of us that it's actually pretty simple.


I did not find that getting a mortgage in retirement was difficult at all. Having a pension helps. And there is no "need" to buy if renting suits you.

Da5id
Posts: 1501
Joined: Fri Feb 26, 2016 8:20 am

Re: Looming Retirement & Market Jitters

Post by Da5id » Fri Oct 20, 2017 8:04 am

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.

For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.
Most bogleheads believe that adjustments of asset allocation should be strategic (based on need/ability to take risk) rather than tactically based (market timing, belief you know the direction of a market). Most here believe that "gut feelings" about market direction are just indigestion rather than correct evaluations. On the other hand, most also believe that if your asset allocation is causing you to not sleep at night, you should reevaulate it on a longer term strategic basis. Seems like you can make a strategic decision to have less in stocks and stick to it given your assets and income sources. You don't need to take the risk of more than 50% stocks to achieve your income goal, so why take the risks?

Ron Scott
Posts: 331
Joined: Tue Apr 05, 2016 5:38 am

Re: Looming Retirement & Market Jitters

Post by Ron Scott » Fri Oct 20, 2017 8:16 am

I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.

MI_bogle
Posts: 264
Joined: Mon Aug 01, 2016 3:56 pm

Re: Looming Retirement & Market Jitters

Post by MI_bogle » Fri Oct 20, 2017 8:33 am

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am

I'm 56, divorced and plan to live on approx $50K in retirement, will need to purchase a home at some point, as I currently rent. [Do you need to buy a house? How come?]

I could live on less than $50K if I have to.

Total portfolio value is $1.4M, excluding the value of two pensions

$600K +/- in taxable accounts (a mix of cash, treasury bonds, CDs and stock index funds)

$800K +/- in tax deferred or non taxable accounts. (Federal TSP, Roth IRA invested in index funds)

The two pensions, when I start them in 2019, will be worth approx. $22K per year in income. My SS should be close to the max when I decide to start taking it.

So, you have ~28x expenses right now in your portfolio. And you will have nearly 1/2 your expenses in pension income starting in 2019, and will collect the other half in SS once you start taking it, which could be starting as early as 4 years after retiring
You have it made in the shade, my friend. Some might even say you have won the game

What is your asset allocation?

Da5id
Posts: 1501
Joined: Fri Feb 26, 2016 8:20 am

Re: Looming Retirement & Market Jitters

Post by Da5id » Fri Oct 20, 2017 8:39 am

Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.
You make it sound so underhanded ("They'll say", "admit"). My asset allocation at beginning of the year was 50% stocks (2:1 US/Int'l). It still is. I've sold a bit of stocks (mostly int'l) to get back to 50% stocks. Market conditions like today will indeed cause people with fixed asset allocations to sell some stocks, but that is because stock appreciation has triggered a rebalance. Do you likewise think the Vanguard Lifestrategy funds are behaving badly? They likely don't need to sell stocks often to rebalance as they presumably have enough inflows/reinvested dividends to just purchase bonds in an up market, but ??? Or do you believe that fixed long term asset allocations are "market timing"?

My gut feeling is indeed that the market is overpriced. I don't let my gut feelings change things as I have no faith in them.

magicrat
Posts: 83
Joined: Sat Nov 29, 2014 7:04 pm

Re: Looming Retirement & Market Jitters

Post by magicrat » Fri Oct 20, 2017 8:56 am

Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.
I haven't sold any stocks this year.

runner540
Posts: 399
Joined: Sun Feb 26, 2017 5:43 pm

Re: Looming Retirement & Market Jitters

Post by runner540 » Fri Oct 20, 2017 9:20 am

retiredjg wrote:
Fri Oct 20, 2017 8:03 am
TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.
If you have enough money to retire, a steep drop, even something like 2007 - 2009, will not be a long term problem. And you have more than enough money to retire. In fact, if you plan to live on $50k a year, you have way more than enough in my opinion.

For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.
Suggest you go to 40% stocks and 60% bonds and stay there.


I suspect your "problem" is simply fear of the unknown. Retirement seems like such a big black hole while you are still working. Trust many of us that it's actually pretty simple.


I did not find that getting a mortgage in retirement was difficult at all. Having a pension helps. And there is no "need" to buy if renting suits you.
I would not take comfort from the speed amd form of the recovery. It was a very close shave, could have easily been an "L shaped" period with out massive and creative central bank actions. They admit they don't have the same arsenal available for the next time.

dbr
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Re: Looming Retirement & Market Jitters

Post by dbr » Fri Oct 20, 2017 9:22 am

magicrat wrote:
Fri Oct 20, 2017 8:56 am
Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.
I haven't sold any stocks this year.
I haven't either. I did sell some bonds to make a withdrawal, but that was because for various reasons I was a little underallocated to stocks at the time.

I know what Ron Scott is thinking, which is that lots of people talk the talk but don't walk the walk when faced with reality. We should see what kind of conversations we have here the next time the market seriously declines. Nevertheless, I don't really believe Bogleheads are cutting back because the market is "overvalued" and neither should anyone else who had arrived at an appropriate asset allocation in the first place.

retiredjg
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Re: Looming Retirement & Market Jitters

Post by retiredjg » Fri Oct 20, 2017 9:42 am

runner540 wrote:
Fri Oct 20, 2017 9:20 am
I would not take comfort from the speed amd form of the recovery.
Yes, I know a lot of people thought the market "bounced back" in no time at all. I was not one of them.

Ron Scott
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Re: Looming Retirement & Market Jitters

Post by Ron Scott » Fri Oct 20, 2017 9:46 am

Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.
Da5id wrote:
Fri Oct 20, 2017 8:39 am
You make it sound so underhanded
dbr wrote:
Fri Oct 20, 2017 9:22 am
I know what Ron Scott is thinking, which is that lots of people talk the talk but don't walk the walk when faced with reality.
Actually, I don’t think anyone is acting in an underhanded way or failing to walk the talk. When I say most people here have sold stock this year I’m saying they are following their asset allocation and rebalancing strategies. When markets skyrocket as they have recently most will find they are over-allocated in stocks and sell (at a high).

dbr
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Joined: Sun Mar 04, 2007 9:50 am

Re: Looming Retirement & Market Jitters

Post by dbr » Fri Oct 20, 2017 9:56 am

Ron Scott wrote:
Fri Oct 20, 2017 9:46 am
Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.
Da5id wrote:
Fri Oct 20, 2017 8:39 am
You make it sound so underhanded
dbr wrote:
Fri Oct 20, 2017 9:22 am
I know what Ron Scott is thinking, which is that lots of people talk the talk but don't walk the walk when faced with reality.
Actually, I don’t think anyone is acting in an underhanded way or failing to walk the talk. When I say most people here have sold stock this year I’m saying they are following their asset allocation and rebalancing strategies. When markets skyrocket as they have recently most will find they are over-allocated in stocks and sell (at a high).
Sorry, I misunderstood the meaning of "whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock." It is true that when the market runs up a natural consequence is that people will be overallocated to that asset.

Da5id
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Joined: Fri Feb 26, 2016 8:20 am

Re: Looming Retirement & Market Jitters

Post by Da5id » Fri Oct 20, 2017 9:57 am

Ron Scott wrote:
Fri Oct 20, 2017 9:46 am
Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.
Da5id wrote:
Fri Oct 20, 2017 8:39 am
You make it sound so underhanded
dbr wrote:
Fri Oct 20, 2017 9:22 am
I know what Ron Scott is thinking, which is that lots of people talk the talk but don't walk the walk when faced with reality.
Actually, I don’t think anyone is acting in an underhanded way or failing to walk the talk. When I say most people here have sold stock this year I’m saying they are following their asset allocation and rebalancing strategies. When markets skyrocket as they have recently most will find they are over-allocated in stocks and sell (at a high).
You say so. Your use of scare quotes and words like admit says otherwise. I read your words to implies that people are in fact engaging in market timing due to being spooked by high valuations. Guess that isn't what you intended to convey.

I tend to worry more about people who panic once the inevitable next crash occurs (always will be a next crash) or who react to the recent run up by thinking that markets only go up... I worry less about people who are feeling so rich that they are nervous, though both types of people can have bad behaviors.
Last edited by Da5id on Fri Oct 20, 2017 10:19 am, edited 1 time in total.

goblue100
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Re: Looming Retirement & Market Jitters

Post by goblue100 » Fri Oct 20, 2017 9:59 am

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
Seeking to know what others, also soon to retire, are doing, if anything, given the current conditions.... thanks
I'm also 56, looking to pull the plug at 60. My current AA is 68%/24/8 (S/B/Cash). That has changed over the last 4 years from 75/18/7. I'm definitely trying to trend more conservative.

For you, I would say don't worry so much. With $22,000 guaranteed, you need $28,000 a year from a $1.4 million portfolio. If you can generate a 2.5% yield it's $35,000 a year, essentially living off the dividends and interest and probably still growing your portfolio.

Your need to take risk is pretty much 0, and it sounds like your willingness is close to that.
Some people are immune to good advice. - Saul Goodman

Ron Scott
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Re: Looming Retirement & Market Jitters

Post by Ron Scott » Fri Oct 20, 2017 10:39 am

Da5id wrote:
Fri Oct 20, 2017 9:57 am
Ron Scott wrote:
Fri Oct 20, 2017 9:46 am
Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.
Da5id wrote:
Fri Oct 20, 2017 8:39 am
You make it sound so underhanded
dbr wrote:
Fri Oct 20, 2017 9:22 am
I know what Ron Scott is thinking, which is that lots of people talk the talk but don't walk the walk when faced with reality.
Actually, I don’t think anyone is acting in an underhanded way or failing to walk the talk. When I say most people here have sold stock this year I’m saying they are following their asset allocation and rebalancing strategies. When markets skyrocket as they have recently most will find they are over-allocated in stocks and sell (at a high).
You say so. Your use of scare quotes and words like admit says otherwise. I read your words to implies that people are in fact engaging in market timing due to being spooked by high valuations. Guess that isn't what you intended to convey.
Well I don't condem all forms of market timing because that is essentially what my rebalancing strategy tells me to do: use rebalancing to sell stocks at those times when the market goes so high that it throwns my allocation in stocks over plan, and buy when the market is so low that it throws my allocation under plan. Call it whatever you want but “buy low, sell high” is a timing goal.

It is also likely that those who follow asset allocation and rebalancing strategies will be buying and selling stock around the same time, I.e., within the same year period. And I for one hesitate to advise entrants to the game to buy hearty into the market while those already in the game are selling.
Last edited by Ron Scott on Fri Oct 20, 2017 10:44 am, edited 1 time in total.

Ron Scott
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Re: Looming Retirement & Market Jitters

Post by Ron Scott » Fri Oct 20, 2017 10:41 am

Sell/buy
Last edited by Ron Scott on Fri Oct 20, 2017 10:43 am, edited 1 time in total.

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Sandtrap
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Re: Looming Retirement & Market Jitters

Post by Sandtrap » Fri Oct 20, 2017 10:42 am

Some helpful links:
Bogle Philosophy
https://www.bogleheads.org/wiki/Boglehe ... philosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Boglehe ... art-up_kit
Define General Investment Goals and Objectives
https://www.bogleheads.org/wiki/Invest ... _statement
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Post format
viewtopic.php?f=1&t=6212

Ignore news reports.
Ignore Market Jitters
j

Da5id
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Re: Looming Retirement & Market Jitters

Post by Da5id » Fri Oct 20, 2017 11:02 am

Ron Scott wrote:
Fri Oct 20, 2017 10:39 am
Well I don't condem all forms of market timing because that is essentially what my rebalancing strategy tells me to do: use rebalancing to sell stocks at those times when the market goes so high that it throwns my allocation in stocks over plan, and buy when the market is so low that it throws my allocation under plan. Call it whatever you want but “buy low, sell high” is a timing goal.
I guess you can define "market timing" to suit your rhetorical needs. My sense of market timing is more like the meaning here: http://www.investopedia.com/terms/m/mar ... sp, namely
Market timing is the act of moving in and out of the market or switching between asset classes based on using predictive methods such as technical indicators or economic data
Clearly rebalancing to a fixed allocation is not an exercise in market timing by that definition. If I have a 50% stock allocation goal, and get above 50% to a pre-defined level that triggers a rebalance, I'm not predicting whether the market will next go up or down. Adjusting dynamically ones stock allocation in response to predictions, that is IMHO market timing. I guess your definition is somewhat different.

Dandy
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Re: Looming Retirement & Market Jitters

Post by Dandy » Fri Oct 20, 2017 11:19 am

You are right to be somewhat concerned since the most risky years are the few before and after retirement. One thing I did was follow Dr. Bernstein's idea of having 20-25 years worth of drawdown needs (he calls it residual expenses) in "safe" products. e.g. Savings accounts, CDs, short term bond funds, individual TIPS, etc. The rest he says can be invested anyway you want. For you the "rest" would be approximately $400k

What this does is try to secure your retirement funding first and then figure out your overall allocation. Kind of a bottom up vs top down process. So, you have a "safe" portfolio (20+years of withdrawals) and a "risk" portfolio ( some equities, intermediate bonds, etc.). I would further suggest when you withdraw money - take some or all from the "risk" portfolio when it does well and most or all from the "safe" portfolio when the "risk" portfolio does poorly. This will help extend the coverage of the "safe" portfolio which is especially important if you can't quite manage to put 20 or so years in "safe" products.

The other suggestion is that you consider delaying collecting Social Security for as long as you can and make sure you have decent health care until you can collect Medicare.

I have implemented the above and while I hate seeing the market drop -- I sleep well.

You need to keep an eye on the adequacy of the "safe" portfolio an top it off as necessary to account for expense or inflation creep.

Olemiss540
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Re: Looming Retirement & Market Jitters

Post by Olemiss540 » Fri Oct 20, 2017 11:27 am

Ron Scott wrote:
Fri Oct 20, 2017 9:46 am
Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.

John Bogle himself suggested very recently that those concerned by the current state of the market might want to adjust their asset allocation in stocks downward. I listen to him primarily regarding basic investing and like his advice.
Da5id wrote:
Fri Oct 20, 2017 8:39 am
You make it sound so underhanded
dbr wrote:
Fri Oct 20, 2017 9:22 am
I know what Ron Scott is thinking, which is that lots of people talk the talk but don't walk the walk when faced with reality.
Actually, I don’t think anyone is acting in an underhanded way or failing to walk the talk. When I say most people here have sold stock this year I’m saying they are following their asset allocation and rebalancing strategies. When markets skyrocket as they have recently most will find they are over-allocated in stocks and sell (at a high).
I haven't done anything but buy more of my target date funds every two weeks. They get paid to do the thinking for me so I am not tempted to screw anything up. Just another reason that these products are so invaluable to today's investors. The proper course of action is often muddied by personal speculation and "gut feelings".

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telemark
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Re: Looming Retirement & Market Jitters

Post by telemark » Fri Oct 20, 2017 11:33 am

I'm 58, looking at retiring next year or in 2019. I'm currently 60% in stocks but am thinking about changing to 55/45 or 50/50. Recent market performance has put me ahead of where I expected to be, and this is starting to look like risk I don't need to take.

scone
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Re: Looming Retirement & Market Jitters

Post by scone » Fri Oct 20, 2017 11:47 am

My situation is somewhat similar to yours, in that I have more money than I think I need. So it has crossed my mind that "getting out of stocks" was a possibility, in that I have apparently "won the game." However, I've decided to keep my stock allocation, which is about 30%, or maybe just sell down to 25%. My reasons are:

1. Selling stocks doesn't eliminate the jitters-- if the market goes up, one loses out, if the market crashes, it's hard to know when to buy, since the market could fall even further.
2. CDs and safer bonds aren't exactly impressive in their payout, and still have some volatility.
3. Inflation. I have "enough" now, but if I live long enough, high inflation could come back, and stocks (along with TIPS) should help with that.
4. Legacy. I do care about growing the pot for my heirs, especially charities I care about.
5. Unknown unknowns, e.g. medical care costs, pension stability, changes in interest rates, changes in personal circumstances. Life is uncertain.

Somewhere on this website, there are some discussions about the idea that a small allocation to stocks is actually more stable than an all bond portfolio. There seems to be a "sweet spot" at about 20%. I would suggest that an allocation somewhere in the 20% - 30% range could be all you need. I also keep several years worth of expense money in cash, mostly because it makes me feel better and reduces market jitter worries.
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore

SimplicityNow
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Re: Looming Retirement & Market Jitters

Post by SimplicityNow » Fri Oct 20, 2017 2:27 pm

Yesterday was my first day of retirement.

To be blunt, you have absolutely no idea that the market is "unsustainable", whatever that means.

Could the market correct 20, 30 or 50%? Absolutely. Is that going to happen tomorrow, next week next year or if the tax cut doesn't pass? Maybe. Maybe not.

The fact is no one knows. No one.

You asked what other people in similar circumstances plan to do. I plan to to do nothing. What can I say, I am a boring guy :). The real reason I plan to do nothing is because I have an asset allocation that I am comfortable with. It allows me to sleep well at night regardless of what the market is doing.

The purpose of an asset allocation, whatever that allocation may be, is to provide a framework and guide to assist you in keeping your portfolio on track. Not just when the market goes up, but also when it goes down.

If you feel your asset allocation is too heavily weighted towards equities because you can meet your expenses and goals with less risk, then consider changing your allocation to a higher percentage of fixed income assets. Then stick with it! Changing it based on news, hunches, noise, an inside tip from a neighbor or a comet has flown by is market timing. It is a losers game. Don't play it.

I suggest you read a good book on Asset Allocation. Rick Ferri's is a popular choice. Another suggestion is to read the wiki especially the part about an Investment Policy Statement. And lastly read Larry Swedroe's book "The Only Guide To A Winning Investment Strategy You Will Ever Need" where he discusses your need, willingness and ability to take risk.

Best of luck on your soon to be retirement.

TresBelle65
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Re: Looming Retirement & Market Jitters

Post by TresBelle65 » Fri Oct 20, 2017 2:50 pm

Thank you for all the replies and feedback. When it comes to this topic, in my opinion, it all bears repeating. One part of my gut knows the right answer, the other part of my gut is on the edge - and I appreciate the words of the poster who does point out that the years surrounding retirement - up to and soon after - are critical ones. I am not sure how anyone could deny that.

I want (need?) to buy a home because I want one stable, longterm base in my life. I won't go into my personal background on this issue (I'll spare you all lol). The good news is that the areas I have been looking into are among the lowest cost available. I haven't been too worried about getting a mortgage, maybe I should be. Worst case scenario is that I could pay cash out right - maybe $200K at the most in the areas I have been looking at.

I have blind spots like most people do. I feel fortunate to have self-awareness of what those are. I was born and raised on the razor's edge of the poverty line. The hand I am holding is not the one that was dealt to me. It's the one I created for myself. It's hard to shake the notion of ever having enough, but I am working on it. I've been caught up in market chaos twice over the years and suffered greatly - once owing from greed and the other from fear....it's a great mind trick to be able to balance the two. Kudos to those who have mastered that.

I think I'll revisit the AA issue again. At least no one has called me a fool (YET!) for working another 18 months JUST for healthcare. :)

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Re: Looming Retirement & Market Jitters

Post by ThrustVectoring » Fri Oct 20, 2017 2:53 pm

You have far more than enough to retire. Your retirement assets need to cover $50k - $22k (pension) = $28k/yr. If you're at a 50/50 asset allocation, you have 25 times your annual expenses in bonds alone. If your equity assets dropped to zero you'd be fine.

You can pick any asset allocation between 25/75 and 75/25 and you'd also be fine. Especially with government-provided healthcare. The only real question is what you want to be investing for - enjoying your retirement with vacations and the like, leaving something behind for your children, making charitable donations, etc. If you're trying to max out your inheritance you should probably be trying to get as much into Roth as you can, along with more aggressively investing in equities.

Working 18 months for the healthcare is a great choice. Unexpected health costs are the biggest source of uncertainty for retirement planning. Although, I might look into how much unpaid vacation you can take while still running out the clock for getting government healthcare :twisted:

TresBelle65
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Re: Looming Retirement & Market Jitters

Post by TresBelle65 » Fri Oct 20, 2017 3:09 pm

You can pick any asset allocation between 25/75 and 75/25 and you'd also be fine. Especially with government-provided healthcare. The only real question is what you want to be investing for - enjoying your retirement with vacations and the like, leaving something behind for your children, making charitable donations, etc. If you're trying to max out your inheritance you should probably be trying to get as much into Roth as you can, along with more aggressively investing in equities.

Working 18 months for the healthcare is a great choice. Unexpected health costs are the biggest source of uncertainty for retirement planning. Although, I might look into how much unpaid vacation you can take while still running out the clock for getting government healthcare :twisted:
I do want to leave something for my children (was planning to leave any real estate if possible (real estate figures into potential need for long term care) and possibly other gifts, but truly the point of investing was to quit working - so that's why the point about working JUST for healthcare is the ironic joke for me right now.

I have started to accelerate the amount of time I take off. I've just come to the realization that it's nuts to hoard either vacation time (only gets paid in cash once I leave) or sick leave (will likely only lose what I don't use before leaving)....just trying to pace myself so the natives don't get restless lol.

delamer
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Re: Looming Retirement & Market Jitters

Post by delamer » Fri Oct 20, 2017 3:20 pm

Are you retiring under MRA+10?

Valuethinker
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Re: Looming Retirement & Market Jitters

Post by Valuethinker » Fri Oct 20, 2017 4:44 pm

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
I am planning to retire from a second career (federal employee, 10 years of service) in 18 months, give or take a month or so. Would like to retire today, but holding out for eligibility for lifetime healthcare coverage in retirement (requires a minimum of 10 years of service).

I'm 56, divorced and plan to live on approx $50K in retirement, will need to purchase a home at some point, as I currently rent. I could live on less than $50K if I have to.

Total portfolio value is $1.4M, excluding the value of two pensions

$600K +/- in taxable accounts (a mix of cash, treasury bonds, CDs and stock index funds)

$800K +/- in tax deferred or non taxable accounts. (Federal TSP, Roth IRA invested in index funds)

The two pensions, when I start them in 2019, will be worth approx. $22K per year in income. My SS should be close to the max when I decide to start taking it. Was married 10 years + plus but a FA recently mentioned something about a law recently passed, so that this no longer matters.

I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.

For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.

Seeking to know what others, also soon to retire, are doing, if anything, given the current conditions.... thanks
I have increased bond weighting. I am similar age but (I hope) 10 years from retirement.

I think that you may never need to purchase a home. Big costs of maintenance condo fees property taxes. One person does not need a lot of space?

Why spend so much cash flow?

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Re: Looming Retirement & Market Jitters

Post by Valuethinker » Fri Oct 20, 2017 4:52 pm

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
I am planning to retire from a second career (federal employee, 10 years of service) in 18 months, give or take a month or so. Would like to retire today, but holding out for eligibility for lifetime healthcare coverage in retirement (requires a minimum of 10 years of service).

I'm 56, divorced and plan to live on approx $50K in retirement, will need to purchase a home at some point, as I currently rent. I could live on less than $50K if I have to.

Total portfolio value is $1.4M, excluding the value of two pensions

$600K +/- in taxable accounts (a mix of cash, treasury bonds, CDs and stock index funds)

$800K +/- in tax deferred or non taxable accounts. (Federal TSP, Roth IRA invested in index funds)

The two pensions, when I start them in 2019, will be worth approx. $22K per year in income. My SS should be close to the max when I decide to start taking it. Was married 10 years + plus but a FA recently mentioned something about a law recently passed, so that this no longer matters.

I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.

For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.

Seeking to know what others, also soon to retire, are doing, if anything, given the current conditions.... thanks
I have increased bond weighting. I am similar age but (I hope) 10 years from retirement.

I think that you may never need to purchase a home. Big costs of maintenance condo fees property taxes. One person does not need a lot of space?

Why spend so much cash flow?
TresBelle65 wrote:
Fri Oct 20, 2017 2:50 pm
Thank you for all the replies and feedback. When it comes to this topic, in my opinion, it all bears repeating. One part of my gut knows the right answer, the other part of my gut is on the edge - and I appreciate the words of the poster who does point out that the years surrounding retirement - up to and soon after - are critical ones. I am not sure how anyone could deny that.

I want (need?) to buy a home because I want one stable, longterm base in my life. I won't go into my personal background on this issue (I'll spare you all lol). The good news is that the areas I have been looking into are among the lowest cost available. I haven't been too worried about getting a mortgage, maybe I should be. Worst case scenario is that I could pay cash out right - maybe $200K at the most in the areas I have been looking at.

I have blind spots like most people do. I feel fortunate to have self-awareness of what those are. I was born and raised on the razor's edge of the poverty line. The hand I am holding is not the one that was dealt to me. It's the one I created for myself. It's hard to shake the notion of ever having enough, but I am working on it. I've been caught up in market chaos twice over the years and suffered greatly - once owing from greed and the other from fear....it's a great mind trick to be able to balance the two. Kudos to those who have mastered that.

I think I'll revisit the AA issue again. At least no one has called me a fool (YET!) for working another 18 months JUST for healthcare. :)
Good healthcare is a major uncertainty and risk in retirement.

You would be foolish to walk away from that.

I'd save up my vacation until retirement if they pay that out in cash.

Hang in there and in 18 months you'll be far better off than most retirees at that age. Major major risk you would have dumped.

Don't worry about leaving your kids real estate. Mostly it is a nightmare in terms of resolving in an estate especially if they live in a different city.

Avstock and bond portfolio is a much easier thing to inherit. Believe me. Real estate is generally a lousy investment.

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Tamarind
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Re: Looming Retirement & Market Jitters

Post by Tamarind » Fri Oct 20, 2017 5:16 pm

Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.
Maybe other BHs have, but not me. Not even rebalancing because my new contributions this year are 10% of my total accumulation still. That makes it pretty tough to reach a rebalancing band. My portfolio is up about 13% YTD which is nice.

cherijoh
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Re: Looming Retirement & Market Jitters

Post by cherijoh » Fri Oct 20, 2017 6:04 pm

retiredjg wrote:
Fri Oct 20, 2017 8:03 am
TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am
I'm distracted by the news reports that if the tax cut package does not happen, the market will experience a steep drop. Never closely paid attention to these types of stories before, but with retirement so close now....the hair is beginning to stand on the back of my head.
If you have enough money to retire, a steep drop, even something like 2007 - 2009, will not be a long term problem. And you have more than enough money to retire. In fact, if you plan to live on $50k a year, you have way more than enough in my opinion.
For the past 10 years, my AA was 50/50 (I forget which comes first, stocks or bonds in that ratio)....but I've been slowly adjusting the AA over the past several months, in favor of bonds & FI (inside my TSP account)....out of fear - looking at this unsustainable stock market.
Suggest you go to 40% stocks and 60% bonds and stay there.

I suspect your "problem" is simply fear of the unknown. Retirement seems like such a big black hole while you are still working. Trust many of us that it's actually pretty simple.

I did not find that getting a mortgage in retirement was difficult at all. Having a pension helps. And there is no "need" to buy if renting suits you.
+1
OP - retiredjg has given you some great advice. It is scary to think about drawing down your nest egg when the stock market is falling too. I'm still working, but was underemployed during the 2007-09 recession - so I have experience spending more than I was taking in during a down economy. That gave me a taste of the uncertainty you are worried about. I think I have probably worked longer than really necessary because of that experience.

Just be thankful that you will have retiree medical benefits. That gives you a lot more stability in expenses after retirement than many (most?) who retire before 65 will have!

cherijoh
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Re: Looming Retirement & Market Jitters

Post by cherijoh » Fri Oct 20, 2017 7:38 pm

Tamarind wrote:
Fri Oct 20, 2017 5:16 pm
Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.
Maybe other BHs have, but not me. Not even rebalancing because my new contributions this year are 10% of my total accumulation still. That makes it pretty tough to reach a rebalancing band. My portfolio is up about 13% YTD which is nice.
In a few years it is likely your new contributions will be a drop in the bucket and get lost in the noise of the volatility of your portfolio. Which is actually a good thing since it usually means that your portfolio has hit "critical mass". But it can be disconcerting if you happen to check your portfolio on a day or week of high volatility and you realize that your portfolio gained/lost a year's worth of take home pay in the course of the week. :shock:

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Tamarind
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Re: Looming Retirement & Market Jitters

Post by Tamarind » Sat Oct 21, 2017 7:01 am

cherijoh wrote:
Fri Oct 20, 2017 7:38 pm
Tamarind wrote:
Fri Oct 20, 2017 5:16 pm
Ron Scott wrote:
Fri Oct 20, 2017 8:16 am
I would guess that most people in this forum have sold stocks this year. They will not call their action “market timing” or admit to being spooked by high valuations. They’ll say they’re “rebalancing asset allocations”, but whenever we see market conditions like we have today you can be sure lots of Bogleheads are selling stock.
Maybe other BHs have, but not me. Not even rebalancing because my new contributions this year are 10% of my total accumulation still. That makes it pretty tough to reach a rebalancing band. My portfolio is up about 13% YTD which is nice.
In a few years it is likely your new contributions will be a drop in the bucket and get lost in the noise of the volatility of your portfolio. Which is actually a good thing since it usually means that your portfolio has hit "critical mass". But it can be disconcerting if you happen to check your portfolio on a day or week of high volatility and you realize that your portfolio gained/lost a year's worth of take home pay in the course of the week. :shock:
May that day come! I am already pleased to see that a measurable portion of my purchases are being made by automated reinvestment of dividends. It's like getting an extra week's salary, so a good start.

Do you find it helpful to look back at your prior returns and find that you are still doing better than you projected? I would hope as I have a much longer track record to look back on that I can say: Oh well, my nest egg dropped 10% this year, which brings my average annual performance down to 6% real. Good thing I'm a Boglehead and only forecast 4% real growth!

aristotelian
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Re: Looming Retirement & Market Jitters

Post by aristotelian » Sat Oct 21, 2017 7:56 am

Tldr. +1, with your pension you have more than enough to survive a 50% drop. Shift to 30/70 if that makes you feel more comfortable. Enjoy your retirement, you have won the game.

RetiredNow
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Re: Looming Retirement & Market Jitters

Post by RetiredNow » Sat Oct 21, 2017 10:07 am

TresBelle65 wrote:
Fri Oct 20, 2017 3:09 pm
I have started to accelerate the amount of time I take off. I've just come to the realization that it's nuts to hoard either vacation time (only gets paid in cash once I leave) or sick leave (will likely only lose what I don't use before leaving)....just trying to pace myself so the natives don't get restless lol.
Recently retired Fed here. Don't have much to add to others' comments about asset allocation and the sufficiency of your savings (especially if you can buy your retirement home for $200K.) Also, I totally agree with continuing to work until you qualify for FEHB for your whole retirement.

I did just wanted to say two things about your comments (quoted) to encourage you to instead save up that vacation time and possibly some of the sick leave time :

1) When you retire, you will want a big lump sum payment for vacation/Annual leave to tide you over until OPM processes your pension application.It takes a while for OPM to process the pension (sometimes as long as 6 months), and you'll be on an interim annuity until they do. Although they say the interim pay is usually about 70% of the final pension, in my case, my monthly interim pay was less than 20% (to be exact, 17.4%) of my pension. I retired at the end of June, and got no interim pay in July, and 17% of my estimated pension in August, Sept, and October. Only last week did I get a deposit for all of the unpaid pension since June. On Nov. 1 my full monthly annuity amount will finally kick in. In July I did get a lump sum for my unused vacation time (120 hours), and that, plus savings in my taxable account, allowed me to meet monthly expenses with a ridiculously tiny interim annuity. You will want a big lump sum annual leave payment after you retire to tide you over.
Here's a link showing OPM retirement processing times: https://www.opm.gov/about-us/budget-per ... status.pdf (I retired in June, OPM got my pension application in July, and it was finalized in October.)

2) You do get credit in your pension for full months worth of unused sick leave time. It doesn't make you eligible for the pension earlier, but they do count it as additonal service in the pension calculation. I strategically used my sick leave for doctor's appointments at the end of my service to end up with full months of sick leave credit (and I left a cushion of a week of excess sick leave over the 'full months' in case I absolutely had to use sick leave in the final month due to being too sick/contagious to go into work.) Here's a chart showing the sick leave conversion to service: http://www.federalretirement.net/sickleavechart.htm

[edited to correct formatting of quoted post - moderator prudent]

TresBelle65
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Re: Looming Retirement & Market Jitters

Post by TresBelle65 » Sat Oct 21, 2017 3:51 pm

Thanks RetiredNow, for your comments. Fortunately, my expenses are low, so not too worried about being depending on the start of the pension.

As far as the sick leave, I did a calculation based on if I do not use any between now and then. Using the formula.

It would add $8.43 to my monthly pension check.

Life is short :)

TresBelle65
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Re: Looming Retirement & Market Jitters

Post by TresBelle65 » Sat Oct 21, 2017 4:06 pm

What this does is try to secure your retirement funding first and then figure out your overall allocation. Kind of a bottom up vs top down process. So, you have a "safe" portfolio (20+years of withdrawals) and a "risk" portfolio ( some equities, intermediate bonds, etc.). I would further suggest when you withdraw money - take some or all from the "risk" portfolio when it does well and most or all from the "safe" portfolio when the "risk" portfolio does poorly. This will help extend the coverage of the "safe" portfolio which is especially important if you can't quite manage to put 20 or so years in "safe" products.

I had not before considered this, but I think this is definitely something for me to look into - seems to accomplish both goals.

Thank you so much for bringing this up.

TresBelle65
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Re: Looming Retirement & Market Jitters

Post by TresBelle65 » Sat Oct 21, 2017 4:12 pm


Are you retiring under MRA+10?
. yes, so I did factor in the reduced pension...it's factored into the $22K number.

delamer
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Re: Looming Retirement & Market Jitters

Post by delamer » Sun Oct 22, 2017 1:42 pm

TresBelle65 wrote:
Sat Oct 21, 2017 4:12 pm

Are you retiring under MRA+10?
. yes, so I did factor in the reduced pension...it's factored into the $22K number.

Actually, I asked because while you need the 10 years to retire with an immediate annuity, you only need 5 years of continuous FEHB coverage to keep insurance in retirement. So technically, you need the 10 years not for insurance but for the pension eligibility.

TresBelle65
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Re: Looming Retirement & Market Jitters

Post by TresBelle65 » Sun Oct 22, 2017 8:14 pm

Actually, I asked because while you need the 10 years to retire with an immediate annuity, you only need 5 years of continuous FEHB coverage to keep insurance in retirement. So technically, you need the 10 years not for insurance but for the pension eligibility.

But...you can't leave the job and take the health insurance with you unless you leave as a retiree - so you still need to qualify for one of the conditions for retirement.

Or at least that's how it's usually explained....do you have a different understanding of the rules?

delamer
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Re: Looming Retirement & Market Jitters

Post by delamer » Sun Oct 22, 2017 8:31 pm

TresBelle65 wrote:
Sun Oct 22, 2017 8:14 pm
Actually, I asked because while you need the 10 years to retire with an immediate annuity, you only need 5 years of continuous FEHB coverage to keep insurance in retirement. So technically, you need the 10 years not for insurance but for the pension eligibility.

But...you can't leave the job and take the health insurance with you unless you leave as a retiree - so you still need to qualify for one of the conditions for retirement.

Or at least that's how it's usually explained....do you have a different understanding of the rules?
My understanding is the same as yours. I couldn't tell from your original post if you had 10 years of total service but not 10 years under FEHB and thought you couldn't retire until you had 10 years under FEHB.

LuckBeALady
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Re: Looming Retirement & Market Jitters

Post by LuckBeALady » Mon Oct 23, 2017 8:38 am

TresBelle65 wrote:
Fri Oct 20, 2017 5:58 am

Seeking to know what others, also soon to retire, are doing, if anything, given the current conditions.... thanks
It looks to me like you are in great shape. You have plenty of funds to sell if you need money after any market corrections. Congrats!

I'm 52, and we are more than 18 months away from retiring- more like 5 years. However, I have a new interest in the ups and downs of the market that I was always able to tune out until recently. I have played by the Bogle rules for 15 years or so-- I didn't need the money any time soon, so I continued to make my monthly contributions to low-fee index funds and left my allocations alone (with the indirect encouragement of this board.)

Last week, to make myself feel less jittery, I moved from 60/40 (stocks/bonds) to 55/45. I am acting on the general advice that the asset allocation needs to be such that you sleep well at night.

TresBelle65
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Re: Looming Retirement & Market Jitters

Post by TresBelle65 » Mon Oct 23, 2017 11:31 am


My understanding is the same as yours. I couldn't tell from your original post if you had 10 years of total service but not 10 years under FEHB and thought you couldn't retire until you had 10 years under FEHB.


When I leave, I'll have 10 years of service and 10 years participation in the FEHB program.

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