Hitting your number---Now What?

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curo
Posts: 23
Joined: Fri Apr 19, 2013 7:53 pm

Hitting your number---Now What?

Post by curo » Sun Jun 24, 2018 11:32 am

Once one saves all their lives, does all the right things ,and finally has enough money to retire----now what do due with that money to protect from losses and give you a very safe return (sleep well)----as little as it may be.

Love to here from fellow Bogleheads on this topic.

PFInterest
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Re: Hitting your number---Now What?

Post by PFInterest » Sun Jun 24, 2018 11:39 am

adjust your asset allocation given your need, ability, and desire for risk.

marcopolo
Posts: 850
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Re: Hitting your number---Now What?

Post by marcopolo » Sun Jun 24, 2018 11:50 am

curo wrote:
Sun Jun 24, 2018 11:32 am
Once one saves all their lives, does all the right things ,and finally has enough money to retire----now what do due with that money to protect from losses and give you a very safe return (sleep well)----as little as it may be.

Love to here from fellow Bogleheads on this topic.
It depends on what you mean by "very safe return". If you really want protect what you have saved, meaning very little loss of principle, then you have to shit all your investments to safe products like CDs, short term bonds, TIPs, and the like. The downside to this is that you will achieve very little real growth, so your "number" needs to be much higher to account for that.

On the other hand, if you want to have the possibility of achieving some real growth, then you have to have some of your investments in riskier investments like equities. The downside to that is that you will almost certainly at some point have some losses.

The real challenge is deciding where along the spectrum you want to be. That is really a person comfort level question that no one else can answer for you.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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TomatoTomahto
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Re: Hitting your number---Now What?

Post by TomatoTomahto » Sun Jun 24, 2018 12:02 pm

What we did is to put 3 million in fixed income, sort of a hybrid liability matching portfolio. The rest goes into equities. In a pinch, even during a market rout, our equities are capable of augmenting our finances. And, more than likely, my wife will continue to work for another half decade or so.

The only thing that disrupts my sleep is neurosis, not any rational analysis of our finances.

gilgamesh
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Re: Hitting your number---Now What?

Post by gilgamesh » Sun Jun 24, 2018 12:04 pm

curo wrote:
Sun Jun 24, 2018 11:32 am
Once one saves all their lives, does all the right things ,and finally has enough money to retire----now what do due with that money to protect from losses and give you a very safe return (sleep well)----as little as it may be.

Love to here from fellow Bogleheads on this topic.
I don’t know how to reach “the number” without knowing my retirement “sleep well” AA. If I want a 4% SWR vs 3.5% SWR, then “the number” changes too. Personally I am planning for a floor income plus side portfolio strategy in retirement, that in turn dictates “the number” for me. So, they are intertwined...I don’t see how I could have a number and then decide my withdrawal strategy. So I will not hit “my number” and then say “now what?”...I will first figure out “now what” prior to coming up with “the number”.

birdy
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Joined: Sun May 02, 2010 7:31 pm

Re: Hitting your number---Now What?

Post by birdy » Sun Jun 24, 2018 12:56 pm

I am leaving my 60/40 allocation alone! I have not changed anything. I have been sleeping very well! My "40" is in EE bonds, CD's, VG Interm-term bond index, and VG Total bond market index.

birdy

dbr
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Re: Hitting your number---Now What?

Post by dbr » Sun Jun 24, 2018 1:11 pm

You might want to read here (with the links): https://www.bogleheads.org/wiki/Retirement_spending

and here: https://www.bogleheads.org/wiki/Retirem ... d_spending

Jim Otar has a book on the subject: http://www.retirementoptimizer.com/

Lots and lots of the discussion on this forum addresses your question, but it isn't a paragraph.

Nowizard
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Re: Hitting your number---Now What?

Post by Nowizard » Sun Jun 24, 2018 1:20 pm

It depends on how close you are to your target or how far above it. If the latter, you may want to be more aggressive with a portion of your portfolio, if not, you will want to minimize risk. The most difficult change for us was to become more conservative. It takes awhile to become comfortable with the shift from an acquisition to consumption/preservation phase of investment.

Tim

Dandy
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Re: Hitting your number---Now What?

Post by Dandy » Sun Jun 24, 2018 1:46 pm

Since you didn't provide much detail the responses will have to be general. I would suggest shifting to asset preservation vs growth. That usually means lowering your equity exposure and may include holding shorter duration bond funds and/or other "safe" fixed income e.g. a CD ladder.

But it is hard to tell since we don't know how close to retirement you are, your current allocation, your estimated retirement expenses, whether or not you will have a pension to lessen the portfolio withdrawals, etc.

2015
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Re: Hitting your number---Now What?

Post by 2015 » Sun Jun 24, 2018 3:13 pm

Before enlightenment, chop wood carry water. After enlightenment, chop wood carry water.

Stay the course.

KlangFool
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Re: Hitting your number---Now What?

Post by KlangFool » Sun Jun 24, 2018 3:21 pm

2015 wrote:
Sun Jun 24, 2018 3:13 pm
Before enlightenment, chop wood carry water. After enlightenment, chop wood carry water.

Stay the course.
+1.

KlangFool

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burt
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Re: Hitting your number---Now What?

Post by burt » Sun Jun 24, 2018 4:51 pm

Congratulations on hitting your number.
Now your job is protecting your number.
That means dialing way back on equity (Stock) exposure.

burt

am
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Re: Hitting your number---Now What?

Post by am » Sun Jun 24, 2018 5:05 pm

Is 50% stocks/bonds reasonable once you hit a basic level of independence? This seems like a good compromise since you’d “only” lose 25% or less of portfolio during some of the most severe bears we’ve head in recent times? Would this still allow 3.5-4% swr?

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Rager1
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Re: Hitting your number---Now What?

Post by Rager1 » Sun Jun 24, 2018 5:52 pm

curo wrote:
Sun Jun 24, 2018 11:32 am
Once one saves all their lives, does all the right things ,and finally has enough money to retire----now what do due with that money to protect from losses and give you a very safe return (sleep well)----as little as it may be.

Love to here from fellow Bogleheads on this topic.
Harry Markowitz, the founder of Modern Portfolio Theory (MPT) uses a 50/50 split between stocks and bonds.

Source: https://alphaarchitect.com/2014/10/17/h ... -investor/

Ed

TravelforFun
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Re: Hitting your number---Now What?

Post by TravelforFun » Sun Jun 24, 2018 6:33 pm

I hit my number three years ago and promptly went part time, put 10 years of annual expenses in bonds and CDs, and have been enjoying my semii-retired life ever since. Waiting to get my first SS spousal benefit check next month and my delayed SS benefits in 4 years. My 'number' allows me a 3% SWR.

TravelforFun

livesoft
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Re: Hitting your number---Now What?

Post by livesoft » Sun Jun 24, 2018 6:40 pm

I just changed my number after hitting my number and carried on.
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flyingaway
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Re: Hitting your number---Now What?

Post by flyingaway » Sun Jun 24, 2018 7:07 pm

livesoft wrote:
Sun Jun 24, 2018 6:40 pm
I just changed my number after hitting my number and carried on.
And do a few One More Years.

bltn
Posts: 117
Joined: Mon Feb 20, 2017 9:32 pm

Re: Hitting your number---Now What?

Post by bltn » Mon Jun 25, 2018 6:32 am

livesoft wrote:
Sun Jun 24, 2018 6:40 pm
I just changed my number after hitting my number and carried on.
I did the same a dozen years ago. After a few years ,I began working part time. Still lived on less than my earnings and continued to save. I managed to double my number without really thinking about it or planning to. Surprised myself.
Just goes to show that the most reliable way to wealth accumulation is disciplined saving into indexes.

Ron Scott
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Re: Hitting your number---Now What?

Post by Ron Scott » Mon Jun 25, 2018 7:58 am

1. If you’re under 62 and in good health keep at it and continue to build wealth for retirement. More is safer.
2. Your age in bonds is the safest way to control for bear and inflation risk.

J295
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Joined: Sun Jan 01, 2012 11:40 pm

Re: Hitting your number---Now What?

Post by J295 » Mon Jun 25, 2018 9:21 am

by PFInterest » Sun Jun 24, 2018 10:39 am

adjust your asset allocation given your need, ability, and desire for risk.
+1

FWIW, we intend to leave an inheritance and are comfortable with 110-age = equities in our current retirement status.

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