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What do we do now?

Posted: Fri Jan 17, 2020 12:59 pm
by big bang
Hello fellow Boglehaeds,

This week we reached 30 times our annual expenses. I think that we can say that we reached our number.
So, what do we do now?
Do we scale back further our AA? Leave it as it is?
We do feel comfortable with our AA. So we just let it fluctuate from here and risk that it will go up or down our number?

Our ages 62
I am retired, wife is still working. She will work for another year or two and than claim social security. I will be claiming social security at 70.
No pension.

Our asset allocation is 55/45:
25% Large Cap
10% Mid Cap
5% Small Cap
15% Foreign Large
40% Intermediate Term Bonds
5% Short Term Treasuries (serves as our emergency fund too..)

So, what people recommend to do at this stage?

Re: What do we do now?

Posted: Fri Jan 17, 2020 1:02 pm
by RickBoglehead
PARTY HEARTY!

Then, relax. You've reached your number, you're happy with your AA, and your wife wants to work for a bit more. Enjoy life!

We're 17 months away.

Re: What do we do now?

Posted: Fri Jan 17, 2020 1:05 pm
by Royal Blue
Lower your Golf handicap? :D Congrats on hitting your number!

If I were you, I'd probably only tweak the Foreign exposure. But that's just me, I get the jitters with Foreign central bank policy with negative interest rates and their debt. China is slowing (just hit a 30yr low)... etc.

Re: What do we do now?

Posted: Fri Jan 17, 2020 1:13 pm
by Carol88888
I really like your portfolio. Since you have a nice portion of bonds I think you will be just fine come what may.

Remember - people are living longer these days and it would not be surprising if either you or your wife reached 95+.

Therefore I think it is a good idea to have a portfolio that will keep growing so that your lifestyle doesn't become crimped in old age.

Re: What do we do now?

Posted: Fri Jan 17, 2020 1:28 pm
by nguy44
Congrats!

If you are comfortable with that AA, leave it and just keep going. I chose to reduce my stock AA when I turned 60 and hit retirement for more emotional that logical reasons. We are living a more than comfortable lifestyle for us and just chose to reduce risk a bit - smaller returns are still plenty for us. Just a choice for now, not carved in stone.

Re: What do we do now?

Posted: Fri Jan 17, 2020 1:37 pm
by Wiggums
RickBoglehead wrote: Fri Jan 17, 2020 1:02 pm PARTY HEARTY!

Then, relax. You've reached your number, you're happy with your AA, and your wife wants to work for a bit more. Enjoy life!

We're 17 months away.
Congratulations! I am retired and my wife is still working for two more years. Enjoy your retirement.

Re: What do we do now?

Posted: Fri Jan 17, 2020 1:48 pm
by big bang
Royal Blue wrote: Fri Jan 17, 2020 1:05 pm If I were you, I'd probably only tweak the Foreign exposure. But that's just me, I get the jitters with Foreign central bank policy with negative interest rates and their debt. China is slowing (just hit a 30yr low)... etc.
I have thought about it many times, especially with recent years of disappointment.
However, I still like the diversification that it provides. So, I will probably continue keeping it at 15%.

Thank you for your response.

Re: What do we do now?

Posted: Fri Jan 17, 2020 1:56 pm
by big bang
nguy44 wrote: Fri Jan 17, 2020 1:28 pm I chose to reduce my stock AA when I turned 60 and hit retirement for more emotional that logical reasons. We are living a more than comfortable lifestyle for us and just chose to reduce risk a bit - smaller returns are still plenty for us. Just a choice for now, not carved in stone.
AA was reduced to 50/50 when I retired. Than my wife found a better paying job. So we moved it to 55/45, which we feel comfortable with.

Re: What do we do now?

Posted: Fri Jan 17, 2020 2:01 pm
by bloom2708
Why not have your wife join you now in retirement?

I don't think you have won until you both reach the goal. :wink:

Congrats!

Re: What do we do now?

Posted: Fri Jan 17, 2020 2:14 pm
by Broken Man 1999
big bang wrote: Fri Jan 17, 2020 12:59 pm Hello fellow Boglehaeds,

This week we reached 30 times our annual expenses. I think that we can say that we reached our number.
So, what do we do now?
Do we scale back further our AA? Leave it as it is?
We do feel comfortable with our AA. So we just let it fluctuate from here and risk that it will go up or down our number?

Our ages 62
I am retired, wife is still working. She will work for another year or two and than claim social security. I will be claiming social security at 70.
No pension.

Our asset allocation is 55/45:
25% Large Cap
10% Mid Cap
5% Small Cap
15% Foreign Large
40% Intermediate Term Bonds
5% Short Term Treasuries (serves as our emergency fund too..)

So, what people recommend to do at this stage?
Congrats! Hey, you and your wife were overachievers, as many workers get antsy and bail out when they have 25 times annual expenses. You have a nice cushion for your retirement, and you aren't very far away from Medicare.

Have you figured out what you need to do for health insurance? That seems to be the elephant in the room when discussing early retirement. Though, you have a short period of time before that issue will be gone.

:sharebeer

Broken Man 1999

Re: What do we do now?

Posted: Fri Jan 17, 2020 2:24 pm
by ruralavalon
Congratulations :) .

big bang wrote: Fri Jan 17, 2020 12:59 pm Hello fellow Boglehaeds,

This week we reached 30 times our annual expenses. I think that we can say that we reached our number.
So, what do we do now?
Do we scale back further our AA? Leave it as it is?
We do feel comfortable with our AA. So we just let it fluctuate from here and risk that it will go up or down our number?

Our ages 62
I am retired, wife is still working. She will work for another year or two and than claim social security. I will be claiming social security at 70.
No pension.

Our asset allocation is 55/45:
25% Large Cap
10% Mid Cap
5% Small Cap
15% Foreign Large
40% Intermediate Term Bonds
5% Short Term Treasuries (serves as our emergency fund too..)

So, what people recommend to do at this stage?
Do something fun to celebrate.

You have reached your number and feel comfortable with the asset allocation. Your 55/45 asset allocation is within the range of what is reasonable for age 62 in my opinion. Leave your asset allocation as is, and rebalance as necessary.

Re: What do we do now?

Posted: Fri Jan 17, 2020 2:46 pm
by elainet7
roth conversions

Re: What do we do now?

Posted: Fri Jan 17, 2020 3:54 pm
by big bang
Broken Man 1999 wrote: Fri Jan 17, 2020 2:14 pm Have you figured out what you need to do for health insurance? That seems to be the elephant in the room when discussing early retirement. Though, you have a short period of time before that issue will be gone.
No, did not plan for the transitional health insurance yet.
Yes, we did figured that is going be for a short time period, maybe for a year or two that we will need to buy from the marketplace.

Re: What do we do now?

Posted: Fri Jan 17, 2020 3:57 pm
by ruralavalon
big bang wrote: Fri Jan 17, 2020 3:54 pm
Broken Man 1999 wrote: Fri Jan 17, 2020 2:14 pm Have you figured out what you need to do for health insurance? That seems to be the elephant in the room when discussing early retirement. Though, you have a short period of time before that issue will be gone.
No, did not plan for the transitional health insurance yet.
Yes, we did figured that is going be for a short time period, maybe for a year or two that we will need to buy from the marketplace.
Most people who have had employer provided/subsidized insurance are surprised to learn the true cost of health insurance. So look into that soon for planning purposes.

Re: What do we do now?

Posted: Fri Jan 17, 2020 3:58 pm
by big bang
elainet7 wrote: Fri Jan 17, 2020 2:46 pm roth conversions
Since my wife is still working we did not have room to do the conversions. I am glad that the RMD is shifted to age 72 starting this year. This will give us more time to do the conversions later.

Re: What do we do now?

Posted: Fri Jan 17, 2020 4:02 pm
by big bang
ruralavalon wrote: Fri Jan 17, 2020 3:57 pm
big bang wrote: Fri Jan 17, 2020 3:54 pm
Broken Man 1999 wrote: Fri Jan 17, 2020 2:14 pm Have you figured out what you need to do for health insurance? That seems to be the elephant in the room when discussing early retirement. Though, you have a short period of time before that issue will be gone.
No, did not plan for the transitional health insurance yet.
Yes, we did figured that is going be for a short time period, maybe for a year or two that we will need to buy from the marketplace.
Most people who have had employer provided/subsidized insurance are surprised to learn the true cost of health insurance. So look into that soon for planning purposes.
Noted.
Hopefully our income will be low enough for those couple of years, that we will not get a big surprise...

Re: What do we do now?

Posted: Fri Jan 17, 2020 6:34 pm
by tesuzuki2002
If you're wife is still working I would change nothing!! since you are still accumulating at this point...

You might talk about a transition when you become a little more conservative...