New retiree perspective during Corona Crash

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Topic Author
Chaconne
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New retiree perspective during Corona Crash

Post by Chaconne »

ON EDIT, SUNDAY, MARCH 15, 2020:
I thought it might be interesting to revisit this thread in light of recent events. So I've updated my situation. It should be the eighth post on page two. THANKS.


I’d like to give—and get—some perspective from a retiree point of view, either those who retired recently or are near retirement. All my working life, I had a nest egg goal of $XXX by the time I retired. Here’s what happened:

On retirement day (December 31, 2018), I had $XXX plus 24%
On my all-time high day (2/19/2020), I had $XXX plus 43%
Six days later (during current Corona Crash), I still had $XXX plus 37%

Thank you, bull market.

My current allocation is about 40/60. I switched from 60/40 in August of 2018. I have enough cash and bonds to last me about 12 to 15 years. I will probably stick to my current allocation, even though I’m fighting the temptation to go more conservative, now that retirement—and the current unique-seeming downturn—is a reality to me.

What about others in a similar life stage? Is the Corona Crash tempting you to go one way or another? After all, we’ve said goodbye to our beautiful old working-days income. Thoughts?
-Bob
Last edited by Chaconne on Sun Mar 15, 2020 10:18 am, edited 1 time in total.
Broken Man 1999
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Re: New retiree perspective during Corona Crash

Post by Broken Man 1999 »

For a new or near new retiree, I'm sure it is painful to experience this decline.

But, it really drives home the need for a good AA.

Broken Man 1999
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Teague
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Re: New retiree perspective during Corona Crash

Post by Teague »

Meh.

I'm 2 years into retirement. 50/50 stocks/bonds. I reallocated 1% of my portfolio from bonds to stocks yesterday, and did the same today.

Again, meh.
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triggertreat
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Re: New retiree perspective during Corona Crash

Post by triggertreat »

Im a couple months into retirement and at 50/50 . Held in 2008 and a year ago and holding now.Just put your blinders on. :D
vipertom1970
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Re: New retiree perspective during Corona Crash

Post by vipertom1970 »

I retired 6 months ago at the age of 50 and getting ready to go 100% equities from 60/40. I might be the only idiot retiree here :D
bltn
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Re: New retiree perspective during Corona Crash

Post by bltn »

With enough money in fixed income to last 10 years or more, I wouldn't touch my stocks.

Most bogleheads don t believe they can beat the market return with market timing.. At least I don t think I can.
bltn
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Re: New retiree perspective during Corona Crash

Post by bltn »

vipertom1970 wrote: Fri Feb 28, 2020 3:26 pm I retired 6 months ago at the age of 50 and getting ready to go 100% equities from 60/40. I might be the only idiot retiree here :D
Or one of the bravest. Or one of the best funded.
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WoodSpinner
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Re: New retiree perspective during Corona Crash

Post by WoodSpinner »

OP,

Retired Dec 2017 and my AA is 55/45.

Hold 10 years of expenses in Treasuries and the rest in VTI/VXUS.

Haven’t hit a 5% rebalancing band (as of Thu) so haven’t shifted any investments. I have been accelerating my Roth Conversions for the year. I have a large target for this year and next since I won’t have to worry about IRMAA penalties.

Overall feeling comfortable—glad I have an IPS and have done lots of thinking about my risk tolerance.

WoodSpinner
Dottie57
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Re: New retiree perspective during Corona Crash

Post by Dottie57 »

I have enough bonds to get me to SS and to supplement SS until mid 90’s. Stocks will give me some fun.

I hope to have fun!
hirlaw
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Re: New retiree perspective during Corona Crash

Post by hirlaw »

Retired in 2018. Before the correction, I was 38% cash and fixed income and 62% stocks. For me, this highlights the "sequence of returns" issue for recent retirees.
tibbitts
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Re: New retiree perspective during Corona Crash

Post by tibbitts »

I'm down $200k from when I retired (December 2019) - ouch! I've been doing some Roth conversions. Every day this week I've done one and of course wished I'd waited longer. I'm past half way to running out of room for conversions this year. I'm not making any other changes.
7eight9
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Re: New retiree perspective during Corona Crash

Post by 7eight9 »

One thread that I think is worth reading is Taylor Larimore's "Maximum Tolerable Loss" -- Not just a fear factor.

Everyone should have a Plan B. Hopefully the markets don't drop so much that one has to exercise it.

viewtopic.php?t=30085
I guess it all could be much worse. | They could be warming up my hearse.
Rob1
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Re: New retiree perspective during Corona Crash

Post by Rob1 »

It's a good test of our plan:
  • Will stick with a 60/40 asset allocation
  • Will rebalance if asset allocation goes off by 5% (not there yet)
  • Will cut spending if it ends up being a big down year
Also, feeling grateful that I have some self employment part-time income as well as reasonable cash reserves.
Topic Author
Chaconne
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Re: New retiree perspective during Corona Crash

Post by Chaconne »

Thanks very much for all the responses. Hirlaw, yes, sequence of returns, indeed.

My main point was that you can read and understand everything possible about things like risk tolerance and sequence of returns risk, but until those things hit you squarely in the face—in real time—it's difficult to know yourself well enough to know how you will act. Perhaps Teague's "Meh" is the most eloquent comment!

THANKS!
-Bob
nguy44
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Re: New retiree perspective during Corona Crash

Post by nguy44 »

I retired the end of June 2018. At the end of 2017 I shifted down to 40% stocks. I came into the year around 35% stocks. I am not planning to change my AA. While I do not like to see my portfolio going down, I am still way ahead of what I had when I retired.

I have a pension but it does not cover all of our regular expenses. One of my retirement criteria was to have enough in cash to cover the balance of our expenses so that I would not have to touch stocks/bond holdings until my SS FRA at the earliest (at that point pension + SS + investment income will cover all expenses). I retired at 60, so that meant having 6 years of planned expenses in cash. I am willing to forgo potential growth to better deal with risky times like this.

So far in retirement our SWR has been a little more than 1%, about half of what we had planned for. So far, so good.

For all these reasons, this week has been at most an "annoyance", but I think we have enough to wait it out for the long term. So far the only impact would be the amount we would leave to our heirs to inherit. :happy
Wanderingwheelz
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Re: New retiree perspective during Corona Crash

Post by Wanderingwheelz »

vipertom1970 wrote: Fri Feb 28, 2020 3:26 pm I retired 6 months ago at the age of 50 and getting ready to go 100% equities from 60/40. I might be the only idiot retiree here :D
Curious what changed in your life where your allocation must to go to 100% equities from 60% equities?

Mainly because I’m a year younger and 60/40 myself.
chevyman38829
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Re: New retiree perspective during Corona Crash

Post by chevyman38829 »

I don’t have enough nerve to go 100% in equity but I have reduced my international equity exposure because of the virus and since it has way underperformed for the last decade
HEDGEFUNDIE
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Re: New retiree perspective during Corona Crash

Post by HEDGEFUNDIE »

chevyman38829 wrote: Fri Feb 28, 2020 9:38 pm I don’t have enough nerve to go 100% in equity but I have reduced my international equity exposure because of the virus and since it has way underperformed for the last decade
Total International is only down 7% this week compared to 11% for S&P.
tibbitts
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Re: New retiree perspective during Corona Crash

Post by tibbitts »

chevyman38829 wrote: Fri Feb 28, 2020 9:38 pm I don’t have enough nerve to go 100% in equity but I have reduced my international equity exposure because of the virus and since it has way underperformed for the last decade
I don't think you'll find much support for moving out of international equities. You'll get some support for never being in them, but not for moving out. Generally you'd rebalance into an asset that has underperformed. You make your bet either for or against international, but once you do you have to stick with it. Just like with small value or REIT or whatever. You just can't bail after a short period (with "short period" being an entire human lifetime or longer) of underperformance. You can tweak your allocation with new money if you're still contributing, but as a retiree, probalby not.
chevyman38829
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Re: New retiree perspective during Corona Crash

Post by chevyman38829 »

So, you shouldn’t overweight or underweight any asset class regardless of market conditions?
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RogueBear
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Re: New retiree perspective during Corona Crash

Post by RogueBear »

Tomorrow will be my first day of retirement and I am not worried about my portfolio. Thanks to all you Bogleheads who helped me develop a solid portfolio with an asset allocation that accurately reflects my risk tolerance. 62/38 will see me through for several years to weather the storm so I can stay the course. I was planning on selling some bonds and now their value has increased. Hopefully we will bounce back before too long, but one never knows and I don't see anything I would do differently.
RB
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Watty
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Re: New retiree perspective during Corona Crash

Post by Watty »

Chaconne wrote: Fri Feb 28, 2020 3:09 pm What about others in a similar life stage? Is the Corona Crash tempting you to go one way or another? After all, we’ve said goodbye to our beautiful old working-days income. Thoughts?
I retired in 2015 and put most of my money into a 2015 target date fund.

I did not calculate it carefully but even after this last week the 2015 target date fund is back to about where it was in September.

The 2015 target date fund is currently about 35% stocks and 65% in bonds. With interest rates dropping the bonds have been going up and today it was unchanged.

https://investor.vanguard.com/mutual-fu ... ance/vtxvx

It is down 1.38% YTD.

I only calculate my net worth once a year on January 1st so I do not track it as closely as you do but I also got lucky with the sequence of returns risk by retiring at a good time so despite 4.5 years of spending my net worth was only down a little bit on January 1st of this year.

I am not too concerned about changing my asset allocation since even if stocks went down by 50% my Target Date 2015 fund would only be down around 18%, assuming that the value of my bonds did not change.

Interest rates have really dropped a lot and if they stay real low I might consider switching from bond to a money market fund since the bond mutual funds will be hurt when rates eventually rise.
vipertom1970
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Re: New retiree perspective during Corona Crash

Post by vipertom1970 »

Wanderingwheelz wrote: Fri Feb 28, 2020 8:52 pm
vipertom1970 wrote: Fri Feb 28, 2020 3:26 pm I retired 6 months ago at the age of 50 and getting ready to go 100% equities from 60/40. I might be the only idiot retiree here :D
Curious what changed in your life where your allocation must to go to 100% equities from 60% equities?

Mainly because I’m a year younger and 60/40 myself.
I have been 100% equities since 1995 so I gave bonds a try 6 months ago but realized it's just a big drag on my portfolio. My expenses is low, I don't have debt and I have emergency fund to pretty much could weather any storm.
gus1961
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Re: New retiree perspective during Corona Crash

Post by gus1961 »

I'm on the verge of retiring, either this year or next.
I do a financial inventory of my accounts on the first of each month.
My AA is 60/40 and as of today I'm down 4.19% from 2/1/20. It puts me back to where I was in November 2019.... Easy come, easy go!

To put this present dip into perspective....
In December 2018, I was down 4.42% for the month.
In May 2019, I was down 3.13% for the month.
In June 2019, I was up 5.59% for the month!
At present, this is just another dip. I do expect the market to rebound, but likely not fully regain it's full vitality until the Corona effects have passed. Keeping the faith....
remomnyc
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Re: New retiree perspective during Corona Crash

Post by remomnyc »

Retired mid 2018 at 55/45. Took cash for my annual expenses in January. Portfolio is down $250k from peak this year and back to its mid 2018 level at 57/43. I rebalance when I take cash and when CDs mature. Not sure if the world is going to end. Just waiting for my 5% bands to be triggered or a TLH opportunity to do something. Very comfortable with my asset allocation because I oscillate from feeling like I have too much stock (fear of bear) and too much bonds (fear of missing out), so it's just right.
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steve roy
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Re: New retiree perspective during Corona Crash

Post by steve roy »

Three years and two months into retirement. Stock/bond allocation 30/70; currently running 28.3% stocks.

DW and I will probably take some money from the (over-sized) VG settlement account and reinvest it in some stock and bond funds next week. We're not in any particular hurry.
AlphaLess
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Re: New retiree perspective during Corona Crash

Post by AlphaLess »

Nice perspectives. Thanks for sharing.
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Re: New retiree perspective during Corona Crash

Post by carolinaman »

I retired at end of 2010, age 75, wife 77. We are 50/50 or at least we were before correction this week. We live off SS and pensions so no real worries although I must prefer to make money, not lose money.

I understand the caution about the coronavirus and support commo sense efforts to contain it. I do hope its threat is minimal. However, we have more than 50,000 people die every year from the flu and half the people do not get a flu shot. Nobody gets excited about that. I find it quite ironic.
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Re: New retiree perspective during Corona Crash

Post by Orbuculum Nongata »

Chaconne wrote: Fri Feb 28, 2020 3:09 pm I’d like to give—and get—some perspective from a retiree point of view, either those who retired recently or are near retirement. All my working life, I had a nest egg goal of $XXX by the time I retired. Here’s what happened:

On retirement day (December 31, 2018), I had $XXX plus 24%
On my all-time high day (2/19/2020), I had $XXX plus 43%
Six days later (during current Corona Crash), I still had $XXX plus 37%

Thank you, bull market.

My current allocation is about 40/60. I switched from 60/40 in August of 2018. I have enough cash and bonds to last me about 12 to 15 years. I will probably stick to my current allocation, even though I’m fighting the temptation to go more conservative, now that retirement—and the current unique-seeming downturn—is a reality to me.

What about others in a similar life stage? Is the Corona Crash tempting you to go one way or another? After all, we’ve said goodbye to our beautiful old working-days income. Thoughts?
-Bob
I retired from my career in 2016. My asset allocation has been one of mild risk. I am now 52 years old. I have no income other than from mutual funds and interest. “Corona Crash” has tempted me to buy more VTSAX shares. After all, my ratio of stock value holdings to bond value holdings has declined due to share price movement. If anything, I will rebalance. Other than that, I would be more likely to return to some kind of work ( part time, etc.) before making any fundamental changes.
I think I can > I believe I can > I did
Wanderingwheelz
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Re: New retiree perspective during Corona Crash

Post by Wanderingwheelz »

chevyman38829 wrote: Fri Feb 28, 2020 10:01 pm So, you shouldn’t overweight or underweight any asset class regardless of market conditions?
I wouldn’t since it’s forward conditions that affect our performance and none of us know what those will be.
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gmaynardkrebs
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Re: New retiree perspective during Corona Crash

Post by gmaynardkrebs »

I'm 30/70 at age 70. I think 40/60 is sensible at your age.
MnD
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Re: New retiree perspective during Corona Crash

Post by MnD »

Started investing 1986 not long before the 1987 crash and retired 11/2018 right before the 12/2018 20% decline.
70/30 for life and global market cap since 2001 and will not make any changes.
I'll rebalance if rebalancing bands are exceeded like always.

I would not be surprised to see this trigger a recession and a garden variety bear market in equities.
Consumers are already altering behavior and they are/were the stalwart of the current boom.
Will take full advantage of bargains on goods and services if a recession ensues.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
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dwickenh
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Re: New retiree perspective during Corona Crash

Post by dwickenh »

Watty wrote: Fri Feb 28, 2020 10:27 pm
Chaconne wrote: Fri Feb 28, 2020 3:09 pm What about others in a similar life stage? Is the Corona Crash tempting you to go one way or another? After all, we’ve said goodbye to our beautiful old working-days income. Thoughts?
I retired in 2015 and put most of my money into a 2015 target date fund.

I did not calculate it carefully but even after this last week the 2015 target date fund is back to about where it was in September.

The 2015 target date fund is currently about 35% stocks and 65% in bonds. With interest rates dropping the bonds have been going up and today it was unchanged.

https://investor.vanguard.com/mutual-fu ... ance/vtxvx

It is down 1.38% YTD.

I only calculate my net worth once a year on January 1st so I do not track it as closely as you do but I also got lucky with the sequence of returns risk by retiring at a good time so despite 4.5 years of spending my net worth was only down a little bit on January 1st of this year.

I am not too concerned about changing my asset allocation since even if stocks went down by 50% my Target Date 2015 fund would only be down around 18%, assuming that the value of my bonds did not change.

Interest rates have really dropped a lot and if they stay real low I might consider switching from bond to a money market fund since the bond mutual funds will be hurt when rates eventually rise.
I thought you were mostly in CDs and not bond funds?

How will you know when to go to Money Market funds instead of bonds? Why not now?

Thanks for your insights,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
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jimmyq
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Re: New retiree perspective during Corona Crash

Post by jimmyq »

I retired last year, and am sticking to my plan. Asset allocation of 50/50, with rebalancing bands of 5%. If stocks drop just a little more, I'll hit a rebalancing threshold and will rebalance to 50/50. Other than normal rebalancing, I do not intend to make changes due to any major events, including the Coronavirus.
texas lawdog
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Re: New retiree perspective during Corona Crash

Post by texas lawdog »

Hope to retire next year and moved part of my taxable portfolio into dividend paying stocks last year. It has been somewhat comforting to see dividend checks continue to roll in during this last week and then use those to purchase higher yield investments.

My 401K and IRA's are still allocated around 60/40 and have not touched those - will continue to ride out this storm and have even thought about moving up to 65/35 depending on how fast a recovery starts to happen.

Good luck as it can be a little concerning about having to sell into a down market.
ruhigste
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Re: New retiree perspective during Corona Crash

Post by ruhigste »

I had been maintaining a 50/50 Stock/Bond four-fund portfolio by re-balancing it myself. DW decided it was not something she could do or wanted to do if I could no longer do this, so we put our traditional IRA's into the conservative LifeStrategy fund, with an AA closer to 40/60 Stock/Bond. LifeStyle handles the re-balancing for us at the cost of loss of Admiral status and slightly higher fees. I'm glad we did this in January of 2020 before the Corona Crash. We plan to stay with this arrangement indefinitely. This means we will have to sell some of the now lower value shares of the Conservative fund to pay our bills, but it could have been worse. We're ending up with the same AA as New Retiree. Best of luck to you.
retire57
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Re: New retiree perspective during Corona Crash

Post by retire57 »

Four years into retirement and we are still above where we started. We only use our nest egg to supplement pensions and SS income - and that only comes from dividends from our taxable funds. Those aren't going away.

I don't see any panic in this thread so we all must have done something right! :sharebeer
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Re: New retiree perspective during Corona Crash

Post by ochotona »

steve roy wrote: Fri Feb 28, 2020 11:42 pm Three years and two months into retirement. Stock/bond allocation 30/70; currently running 28.3% stocks.

DW and I will probably take some money from the (over-sized) VG settlement account and reinvest it in some stock and bond funds next week. We're not in any particular hurry.
Personally, I think a 40/60 is great for a retiree. You get above 50/50 and you start to get into a different emotional regime. The people who are retired with 60/40 or more aggressive will never get on here and say how they were wrong, the bear market got really ugly and they panic sold near the bottom.

Now if you are very well funded... yeah, 100% equities is fine. But you need to know if a bear market pushes you into retirement failure. It happened to my dear Dad. He had too much risk. It won't happen to me. You should have a high Monte Carlo probability of having adequate inflation adjusted cashflow to a ripe old age.

During the Great Financial Crisis, 60/40s were down 30.72%, per PortfolioVisualizer. It didn't come back to even for three years. I was I my mid-40s at the time so it was not a concern, but getting closer to 60, that's not anything I want for myself at this time. 40/60 took a 19.36% drawdown, took 25 months to get back to even.

Bogle himself said something like, "If I don't know whether to have stocks or bonds, 50/50 minimizes my second-guessing".
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G12
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Re: New retiree perspective during Corona Crash

Post by G12 »

Chaconne wrote: Fri Feb 28, 2020 3:09 pm I’d like to give—and get—some perspective from a retiree point of view, either those who retired recently or are near retirement. All my working life, I had a nest egg goal of $XXX by the time I retired. Here’s what happened:

On retirement day (December 31, 2018), I had $XXX plus 24%
On my all-time high day (2/19/2020), I had $XXX plus 43%
Six days later (during current Corona Crash), I still had $XXX plus 37%

What about others in a similar life stage? Is the Corona Crash tempting you to go one way or another? After all, we’ve said goodbye to our beautiful old working-days income. Thoughts?
-Bob
I retired almost 10 years ago at 47, my wife is pulling the plug this year @ 55. I sold some investments in Nov/Dec, some for tax reduction reasons, but had been between 52-55% for the last 15 months or so. Put a lot of cash to work Thurs/Friday, back to 54% equity. Currently closing the sale of a business and CRE in less than 3 weeks, which will free up a lot more cash. I'm not worried, there will always be forces or somewhat outlier events that will create market shocks and if it is extremely unsettling to an investor then they should consider a less volatile strategy. The dollar value of initial losses after a huge run up is always a big number if you have multiple 7's or more, but the percentage loss is what it is. I'm not overly concerned about the Corona virus. CDC states just over 45% of Americans over 18 got flu shots in the most recent period, apparently most Americans aren't too concerned about dying from the flu, so I believe the current media pumping effect will diminish in the not too distant future. Whatever the respiratory virus was my wife brought home from NYC in mid-December was awful, 3-5 week recovery time, so not being overly concerned about the Corona virus doesn't mean I have zero concern.
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iceport
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Re: New retiree perspective during Corona Crash

Post by iceport »

Chaconne wrote: Fri Feb 28, 2020 3:09 pm My current allocation is about 40/60. I switched from 60/40 in August of 2018. I have enough cash and bonds to last me about 12 to 15 years. I will probably stick to my current allocation, even though I’m fighting the temptation to go more conservative, now that retirement—and the current unique-seeming downturn—is a reality to me.

What about others in a similar life stage? Is the Corona Crash tempting you to go one way or another? After all, we’ve said goodbye to our beautiful old working-days income. Thoughts?
-Bob
Retiring in April 2017, I had transitioned from 70% equities/30% fixed income to 56%/44% by the time I was 2 years out from retirement. That reduction in equity exposure was how I addressed my sequence-of-returns risk concerns. To address the somewhat conflicting goal of beating inflation and maximizing a (theoretical) sustainable withdrawal rate, which benefits from a healthy helping of equities, I plan to hold that 56%/44% AA "forever."

So, in answer to your query, I plan to do nothing. Changing my AA in response to short term market moves makes even less sense to me than continuing to lower my equity allocation through my retirement years — which, research shows, makes little sense.

The only exception would be to re-balance if and when I hit my re-balancing band limits. I set those at +/-20% of target allocation. Just before the correction hit I was getting slightly annoyed by the fact that my total stock market index position, entirely held in my taxable account, was nearing the upper re-balancing limit. (I have so far been able to avoid any selling in the taxable account for the sole purpose of re-balancing.) This correction has solved that problem! I'm now in nearly perfect alignment with the overall 56%/44% AA, and the total stock market fund is down to only ~6% over target.

Staying the course!
"Discipline matters more than allocation.” ─William Bernstein
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Re: New retiree perspective during Corona Crash

Post by 260chrisb »

Without knowing how much $XXX is or your age but assuming you're somewhere in the normal retirement age of 60-65 seems to me like you're good to go if you have 12-15 years of cash and bonds to spend. I'm two years out and hadn't planned to have that many years in cash and bonds. Maybe not the perspective you wanted but wouldn't a 15 year investment time span allow you to be more aggressive and just say "whatever" ?
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Re: New retiree perspective during Corona Crash

Post by pkcrafter »

vipertom1970 wrote: Fri Feb 28, 2020 3:26 pm I retired 6 months ago at the age of 50 and getting ready to go 100% equities from 60/40. I might be the only idiot retiree here :D
Just so you know, your idea is NOT a Boglehead recommended strategy.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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Re: New retiree perspective during Corona Crash

Post by pkcrafter »

Chaconne wrote: Fri Feb 28, 2020 8:31 pm Thanks very much for all the responses. Hirlaw, yes, sequence of returns, indeed.

My main point was that you can read and understand everything possible about things like risk tolerance and sequence of returns risk, but until those things hit you squarely in the face—in real time—it's difficult to know yourself well enough to know how you will act. Perhaps Teague's "Meh" is the most eloquent comment!

THANKS!
-Bob
This post ought to be required reading. Chaconne, you are absolutely right. We already have people bailing over a rather small upset, and it will get much worse if the market keeps falling.

MOST NEW INVESTORS WILL NOT KNOW THEIR TRUE RISK TOLERANCE WHEN FACED WITH THE REAL THING FOR THE FIRST TIME.

This is also why risk tolerance tests aren't much use.

Paul
Last edited by pkcrafter on Sat Feb 29, 2020 8:36 pm, edited 1 time in total.
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
datadatum
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Re: New retiree perspective during Corona Crash

Post by datadatum »

Chaconne - way to see the bright side! Looking at market history shows there is always a bounce sooner or later. :)

My perspective is that we all knew a correction was coming. You wouldn't (or shouldn't) be in stocks if the risk was too high. I'm riding it out.

Let's all hope/pray that COVID-19 is but a footnote on 2020, and none of us or our loved ones are directly affected.
vipertom1970
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Re: New retiree perspective during Corona Crash

Post by vipertom1970 »

pkcrafter wrote: Sat Feb 29, 2020 1:13 pm
vipertom1970 wrote: Fri Feb 28, 2020 3:26 pm I retired 6 months ago at the age of 50 and getting ready to go 100% equities from 60/40. I might be the only idiot retiree here :D
Just so you know, your idea is NOT a Boglehead recommended strategy.

Paul
Hi Paul, have been in 100% equities why whole life but got into bonds last six months and realized it's not for me. I was going to cash out my bonds to pay cash for a rental home before the correction but since the market had dropped so I decided it's easier to put in equites then buying a rental.
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Watty
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Re: New retiree perspective during Corona Crash

Post by Watty »

dwickenh wrote: Sat Feb 29, 2020 10:44 am
I thought you were mostly in CDs and not bond funds?

How will you know when to go to Money Market funds instead of bonds? Why not now?

Thanks for your insights,

Dan
I am not sure where you got that idea. My fixed income is currently the bond funds that my target date fund owns, I do also have a few high interest rate iBonds too.

I have not moved from bonds to a money market fund yet because I really want to keep my investing simple and I have not dug into the math yet to try to figure just how impace rising interest rates would have on bond funds.
Hubris
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Re: New retiree perspective during Corona Crash

Post by Hubris »

I’m 6 days from retirement, which was just announced internally and externally last Monday. I’m not saying the announcement triggered the correction... :D

I have been moving from mirrored allocations to overall portfolio allocation and was most of the way there with final remaining changes to buy more equities in taxable. As such, got lucky and was even more conservatively balanced than where I want to end up in the long run. Things were also complicated by needing to liquidate some assets for all cash purchase of retirement house which is under contract so will end up pulling from both fixed income (capital gains) and equities (capital losses) for minimal tax liability.

SORR mitigation is that DS will keep working for several years, I can pick up consulting since I already have some offers, and glide path into more equities when our current home sells in HCOL (not VHCOL) sellers market metro area.

Just luck vs strategy, but a good outcome nonetheless and I’ve certainly been on the receiving end of good strategy/bad outcome and bad strategy/bad outcome in the past.
The Casualty
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Re: New retiree perspective during Corona Crash

Post by The Casualty »

Retired at 50 / 50. Down about 5.6% (that's 215K) and yeah, I don't like it but there is no possibility that we will alter our long term plan. SS & Pension covers 100 % of living expenses and if that doesn't work, we have 2 decades + in bonds and cash. If we go down 50% I would definitely put some cash to work. Staying the course, tried and true.
Mickey7
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Re: New retiree perspective during Corona Crash

Post by Mickey7 »

I retired this past August and have a 40/60 AA. Fortunately my SS + Pension provides more than enough for my living expenses. Initially I was planning to take a portion of my SS and start a taxable account, but inertial set in as I began working on my house. In this case inertial was good. I now will take that money to for a new roof and correct some foundation issues. Hopefully will be able to start funding that account before the summer. In the meantime with foreign travel kind of on the back burner for awhile, it looks as if this will be a good year for camping and baseball games.
Regarding what we are experiencing currently in the market, do I like it? No. Is there anything I can do about it? Only rebalance when I hit my bands. Meanwhile it will be back on the ladder tomorrow. :D
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Third Son
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Re: New retiree perspective during Corona Crash

Post by Third Son »

Retired yesterday. Two years of cash to live off of. Took a hit last week as did everyone. Am I worried? A bit, but I have been here before. Currently at 40/60 but that was a consequence of the hit on equities. I will leave it there and see how it goes. Still trying to get over the fact that I don't have to go to work tomorrow.
Last edited by Third Son on Sun Mar 01, 2020 1:27 pm, edited 1 time in total.
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