Goal Reached - Now What?

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WIBD
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Goal Reached - Now What?

Post by WIBD » Fri May 08, 2020 11:41 am

Hoping you folks can give me some guidance.

I’m 57 and due to obsessive saving, I’m now financially secure enough that I can retire whenever I’m ready. I’m seriously considering in the next year but really, I’m just not sure what I want to do. While I’ve had both Vanguard and Fidelity model my likelihood of success and both give high marks, I’m a bit worried about getting through the ~10 years before my pension, social security, and Medicare kick in. As well, I’m not sure if I’m emotionally prepared to stop working and not sure what my retirement will look like.
In preparation that I would retire soon, my portfolio allocation is what I call a hybrid Bucket: I have 2 years of living in cash, with the rest of the money stock/bond 60/40 that will re-balance regularly. Stock is 65% US, 35% international. Most of my portfolio is index funds and ETF’s and tax efficient across my 401(k), Roth IRA, and taxable brokerage account.

In addition to my retirement portfolio, I have a year of emergency funding, money put aside for a car in five years, and another fund for house remodels and other big-ticket items. My only debt is my mortgage which is minimal

My concern is my risk profile. I have a huge hoard of cash between the bucket and other savings. I’m worried that my portfolio may be too conservative if I wind up not retiring right away; that I’m not putting enough money to work.

I guess my real question is: what do you do when you’ve reached your goal long before you needed to?

Thanks for your help

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FiveK
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Re: Goal Reached - Now What?

Post by FiveK » Fri May 08, 2020 4:09 pm

WIBD, welcome to the forum.
WIBD wrote:
Fri May 08, 2020 11:41 am
I guess my real question is: what do you do when you’ve reached your goal long before you needed to?
When runners cross the finish line, they usually stop running. :)

Or you could re-evaluate what you had considered to be your goal.

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Jazztonight
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Re: Goal Reached - Now What?

Post by Jazztonight » Fri May 08, 2020 4:33 pm

Successful retirement is not, in my opinion, about money. Certainly you need enough. But you don't need a lot more than enough.

You've done an excellent job planning for the financial aspect of retirement. But as I realized many years ago, that's only one part of it.

In his excellent book,Get a Life: You Don't Need a Million to Retire Well (published in 2005!), the author's research revealed that "successful retirement" (as defined by people who said they were successfully retired) was more about personal health, social connections, and meaningful activities than about money. I have found this to be true. https://smile.amazon.com/Get-Life-Dont- ... 11&sr=8-17

Once you aren't going to work or to an office or seeing clients every day, what will take the place of those activities?

My answer included activities that are "ongoing," not just "projects." I exercise every day; have taken up two new musical instruments and seriously study them; I've ramped up my foreign language study (Spanish). And I write/journal/correspond with people around the world. These activities are in addition to the regular stuff everyone generally does--family time, travel, social gatherings, reading, taking naps, cooking, eating, attending concerts, etc.

I have a number of friends in the professions who have had difficulties retiring because their jobs defined their lives. IMHO they waited too long to transition to retired life.

Retirement is not for sissies. Good luck to you, and I wish you the best as you work out the details!
"What does not destroy me, makes me stronger." Nietzsche

Topic Author
WIBD
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Re: Goal Reached - Now What?

Post by WIBD » Fri May 08, 2020 4:41 pm

Thanks. I’ve heard of that book, I’ll check it out

On my to do is to make a list, “what would I like to do if I had the time”

Robert20
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Re: Goal Reached - Now What?

Post by Robert20 » Fri May 08, 2020 4:45 pm

FiveK wrote:
Fri May 08, 2020 4:09 pm

When runners cross the finish line, they usually stop running. :)
Vow ..very nice quote... can I borrow and use it elsewhere?

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FiveK
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Re: Goal Reached - Now What?

Post by FiveK » Fri May 08, 2020 5:10 pm

Robert20 wrote:
Fri May 08, 2020 4:45 pm
FiveK wrote:
Fri May 08, 2020 4:09 pm
When runners cross the finish line, they usually stop running. :)
Vow ..very nice quote... can I borrow and use it elsewhere?
Of course! Probably not original anyway.

jjface
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Re: Goal Reached - Now What?

Post by jjface » Fri May 08, 2020 5:17 pm

As far as your worry about money not earning enough... if you are still working and saving and not drawing from your retirement your money doesn't need to work hard at all. Until you draw your only necessary goal is keeping up with inflation. If you keep working and saving chances are you'll have a much higher next egg in 2-10 years. You should feel comfortable and be glad you won the race. Assuming your original goal is appropriate! Retire when you want to and enjoy it.

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SailorManDan
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Re: Goal Reached - Now What?

Post by SailorManDan » Sat May 09, 2020 8:12 am

WIBD wrote:
Fri May 08, 2020 11:41 am
I’m now financially secure enough that I can retire whenever I’m ready...I’m worried that my portfolio may be too conservative if I wind up not retiring right away...
Doesn't sound like you're that confident about you're financial picture. Consider running numbers through a calculator or posting your profile here. Beware of tough love tho.
WIBD wrote:
Fri May 08, 2020 11:41 am
I guess my real question is: what do you do when you’ve reached your goal long before you needed to?
I just updated my bucket list. Amazing what happens when one starts crossing off (not just list creating) some of life's major goals. My perspective has dramatically shifted since attempting to do as many things as possible before I physically cannot. Good luck.

aqan
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Re: Goal Reached - Now What?

Post by aqan » Sat May 09, 2020 8:20 am

WIBD wrote:
Fri May 08, 2020 11:41 am

I guess my real question is: what do you do when you’ve reached your goal long before you needed to?
If you don’t mind what you do for living and it’s not too stressful you could keep working and during this time no need to save just use the cashflow to do whatever you have been depriving yourself while saving excessively without feeling guilty about non-essential draw on your retirement account:)

diceman3
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Re: Goal Reached - Now What?

Post by diceman3 » Sat May 09, 2020 8:24 am

The hardest thing to do most times is do nothing. You’ve made your goals, just preserve your wealth in the most practical way.

Good luck!

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4nursebee
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Re: Goal Reached - Now What?

Post by 4nursebee » Sat May 09, 2020 8:32 am

Congratulations!

Similar boat here, but keeping on for a number of reasons. Having reached the $ number a few months ago decided it alone should not be the reason, perhaps when the previous 6 or twelve months are at the number it would be more secure to quit. Feeling really smart to have decided this...and yet still above the number now. The number itself was really a dream stretch target, now it is more about the best process. Kudos to having the funds on reserve, similar boat here now having 3-4 years worth of emergency funds though most is still invested in the market, little need for actual cash if I can sell something via broker and get cash within a week.

How to make it through next 10 years? What my spouse did was to pull money out of 401K, buy a guaranteed 8 year annuity to make it to age 70 and max Social Security. At least one old timer well respected person around here claimed we were giving up brain cells making such a decision, looking back it was the perfect thing for us with regards to peace of mind. It provides a floor of guaranteed income that allowed us to stick with our overall plan, which we have done over the past few months.

It is your risk profile, you get to decide. You do not need to conform to the common wisdom. Take what you want and leave the rest.

I'm continuing to work for insurance, have cut back hours a little bit, and might go part time.
Pale Blue Dot

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Sandtrap
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Re: Goal Reached - Now What?

Post by Sandtrap » Sat May 09, 2020 8:45 am

In addition to “jazztonight”’s perfect missive:

1
Post a Portfolio Review in the forum format for a comprehensive financial evaluation. Suggestions might surprise you.
2
The gap years between early retirement (pre 65, pre SS, etc) can sometimes be more costly than projected. Be careful.
3
Consider a partial “retirement test drive” by working part time and see what fills the vacuum of increased “me time” instead of an “all or nothing” approach.
4
Read “Ages of the Investor” Life Cycle Investing: by W. Bernstein.
Search the forum threads for “Sequence of Returns Risk”
5
What will you have for medical insurance if retiring now?

Congratulations on your success and hard work😃

j
Last edited by Sandtrap on Sat May 09, 2020 8:49 am, edited 2 times in total.
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CyclingDuo
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Re: Goal Reached - Now What?

Post by CyclingDuo » Sat May 09, 2020 8:46 am

WIBD wrote:
Fri May 08, 2020 11:41 am
Hoping you folks can give me some guidance.

I’m 57 and due to obsessive saving, I’m now financially secure enough that I can retire whenever I’m ready. I’m seriously considering in the next year but really, I’m just not sure what I want to do. While I’ve had both Vanguard and Fidelity model my likelihood of success and both give high marks, I’m a bit worried about getting through the ~10 years before my pension, social security, and Medicare kick in. As well, I’m not sure if I’m emotionally prepared to stop working and not sure what my retirement will look like.
In preparation that I would retire soon, my portfolio allocation is what I call a hybrid Bucket: I have 2 years of living in cash, with the rest of the money stock/bond 60/40 that will re-balance regularly. Stock is 65% US, 35% international. Most of my portfolio is index funds and ETF’s and tax efficient across my 401(k), Roth IRA, and taxable brokerage account.

In addition to my retirement portfolio, I have a year of emergency funding, money put aside for a car in five years, and another fund for house remodels and other big-ticket items. My only debt is my mortgage which is minimal

My concern is my risk profile. I have a huge hoard of cash between the bucket and other savings. I’m worried that my portfolio may be too conservative if I wind up not retiring right away; that I’m not putting enough money to work.

I guess my real question is: what do you do when you’ve reached your goal long before you needed to?

Thanks for your help
Medicare will kick in at 65, not 67. You seem most worried about the time from now until then, plus when you start taking your pension, and the SS benefit. Set aside the money you need to cover all expenses between now and then using either a liability matching portfolio or your own combination of fixed income designed to get you through those years. The remainder of the portfolio can be your desired AA to fund the gap in expenses that the pension and SS will not cover once those income streams start flowing. There are several ways to set all of this up to help relieve any worry you are feeling.

The second point you raise beyond the financial aspects is a separate subject/discussion about your readiness, sense of identity/purpose, routine in retirement, and what you are going to be doing. That's a normal uncertainty, but one that does need to be worked out in your mind, or in a journal with some goals written down that could evolve as time passes and you start to get a clearer picture. All of our parents retired, then kept on working at a relaxed, part-time pace in the same or other disciplines - as well as charitable work - not for the money, but sense of identity, social aspect, routine, etc... . Not everyone has the same journey and it is highly individual as to what you want to do or will do.

All the best in your planning. We'll be riding our bikes, hiking, gardening, cooking, traveling, puttering around the house, socializing, going to concerts/recitals/plays/musicals/operas, taking care of our dogs, volunteering, and of course the potential for visiting grandchildren (fingers crossed).

CyclingDuo
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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Will do good
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Re: Goal Reached - Now What?

Post by Will do good » Sat May 09, 2020 10:30 am

When we reached our goal, we traveled a lot... oh wait, never mind. :annoyed

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midareff
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Re: Goal Reached - Now What?

Post by midareff » Sat May 09, 2020 10:46 am

Will do good wrote:
Sat May 09, 2020 10:30 am
When we reached our goal, we traveled a lot... oh wait, never mind. :annoyed
Oh yes, that two week at a time vacation restriction doesn't apply to you. yup ... multiple week trips to China and Africa.

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TomatoTomahto
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Re: Goal Reached - Now What?

Post by TomatoTomahto » Sat May 09, 2020 11:19 am

WIBD wrote:
Fri May 08, 2020 11:41 am
My concern is my risk profile. I have a huge hoard of cash between the bucket and other savings. I’m worried that my portfolio may be too conservative if I wind up not retiring right away; that I’m not putting enough money to work.

I guess my real question is: what do you do when you’ve reached your goal long before you needed to?
Congratulations.

The quoted worry is exactly backwards: your portfolio may be too conservative if you retired right now, but not at all if you continue working.

As to your “real question,” what we did is something I call a “quasi Liability Matching Portfolio.” We put something like $3M in various flavors of fixed income. Why $3M? I very analytically decided that $2M felt light and $4M felt excessive. I think it should carry us through most stormy weather, and it has actually grown to be a bit more. Everything else goes into equities. No muss, no fuss. No need for a sharp pencil to calculate our asset allocation. If you asked me our AA, with a shotgun to my head, I think I’d get it right to around 5% plus or minus. Close enough.

Depending on age, lifestyle, legacy motivation, etc., the amount I’d recommend for you in fixed income differs, but it should be sufficient (or “adequate 😄”). Rolls Royce never disclosed the horsepower for their Silver Shadow and advertised it as "adequate."
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Watty
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Re: Goal Reached - Now What?

Post by Watty » Sat May 09, 2020 11:53 am

WIBD wrote:
Fri May 08, 2020 11:41 am
I guess my real question is: what do you do when you’ve reached your goal long before you needed to?
I went on and retired when I was 58.

There were things I wanted to do like travel and I had seen relatives naturally slow down and give up things like travel by the time they were in their 70s even though they were in relatively good health. I knew that I likely had maybe 12 "good years" before I was 70 and I would likely need to slow down too so each one was a limited resource. I may get more good years than that but there is a lot of luck involved.
WIBD wrote:
Fri May 08, 2020 11:41 am
I’m not sure if I’m emotionally prepared to stop working and not sure what my retirement will look like.
One thing to keep in mind about making the transition to being retired is that unless you plan on working until you are 90 then you will have to do it sooner or later. If you are financially able then doing it sooner than later will give you more time to enjoy your retirement after you make that transition.

Some people who become financially independent will then choose to keep working but on their terms.

They may only work part time or be willing to do things like set limits with their manager when it comes to doing things like excessive travel or overtime and may they find that they like their work a lot more. It varies with the job but when you are not afraid of being let go, and not worried about getting a promotion, there may be all sorts of boundaries that you can set which would make the job more enjoyable. The management may need advance notice to plan for it but lots of people have had success with setting boundaries at work. If that does not work then finding a different more enjoyable job in your field might be an option.

lws
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Re: Goal Reached - Now What?

Post by lws » Sat May 09, 2020 12:38 pm

Congratulations.
You have reached your financial goal.
There may be other goals that you want to reach.
Go for them.

Kbg
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Re: Goal Reached - Now What?

Post by Kbg » Sat May 09, 2020 1:04 pm

I retired my first time at age 52 and it was awesome for about six months...then not so much. I thought I had planned well and financially I did, but not at all mentally/emotionally. I’ve been back at work 4 years now and it was a great choice for me. During my first annual appraisal review at my second career, I was upfront with my boss that I had zero desire to work killer hours again, climb the company ladder etc. but that if there was a business need to flex hard I absolutely would. It has worked out great but if times get tough I’m sure I’ll be the first manager shown the door which is as it should be...this is a long way of saying you have options if your financial needs are met and the decision doesn’t need to be a binary work/retired decision.

At least for me, I’ve found the lifestyle part of retirement was way more important than the financial side.

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WIBD
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Re: Goal Reached - Now What?

Post by WIBD » Sat May 09, 2020 4:24 pm

THANKS A LOT TO EVERYONE

A lot of great advice in these posts and it's been a big help.

I'm very interested in this Liability Matching Portfolio - thought I was up on all aspects of financial management but this is a new concept. Are there any 101 websites that I can learn more?

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TomatoTomahto
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Re: Goal Reached - Now What?

Post by TomatoTomahto » Sat May 09, 2020 5:13 pm

WIBD wrote:
Sat May 09, 2020 4:24 pm
THANKS A LOT TO EVERYONE

A lot of great advice in these posts and it's been a big help.

I'm very interested in this Liability Matching Portfolio - thought I was up on all aspects of financial management but this is a new concept. Are there any 101 websites that I can learn more?
There are many versions of LMP (Liability Matching Portfolio) ranging from William Bernstein’s formal version to various and sundry “roll your own” versions. My quasi-LMP is as lazy as I am 😄. I would do a forum search on LMP.
Okay, I get it; I won't be political or controversial. The Earth is flat.

3funder
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Re: Goal Reached - Now What?

Post by 3funder » Sat May 09, 2020 5:20 pm

It sounds like money isn't an issue. I'm not even sure your risk profile is much of an issue, even though you worry about it being one. I think you should focus on figuring out when you want to retire. If you're not sure, then you're probably not mentally ready to do so.
Last edited by 3funder on Sat May 09, 2020 5:24 pm, edited 1 time in total.

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cashboy
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Re: Goal Reached - Now What?

Post by cashboy » Sat May 09, 2020 5:21 pm

WIBD wrote:
Fri May 08, 2020 11:41 am

I guess my real question is: what do you do when you’ve reached your goal long before you needed to?

just some general advice (non-financial)

stop, take a deep breath, exhale, and laugh out loud. congratulate yourself on having reached your goal (not everyone does...).

consider your options - with the added bonus of being able to take your time before making any decisions.

i offer my congratulations to you!

well done!

:sharebeer
Last edited by cashboy on Sat May 09, 2020 7:25 pm, edited 1 time in total.
Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CDs - CASH - Canned Beans - Rice - Bottled Water)

JamesJonesJrJr
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Re: Goal Reached - Now What?

Post by JamesJonesJrJr » Sat May 09, 2020 6:07 pm

WIBD wrote:
Fri May 08, 2020 11:41 am

I guess my real question is: what do you do when you’ve reached your goal long before you needed to?
If I could retire then I would simply retire.

retire2022
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Re: Goal Reached - Now What?

Post by retire2022 » Sat May 09, 2020 6:20 pm

Op

I'm 59.5 with 1.5 million portfolio and 2.1 million net worth, I have 34 years in and my projected pension is expected to be 66K a year which will include healthcare premiums paid out of my sick time. edit: I was originally going to leave my job end of April 2020, now I am targeting retirement Dec 31, 2020.

I plan on apply for Social Security Medicare at 65, and apply for PIA (SSA) at 67 or later at 70. Every year I wait from 62 -70 is an automatic increase of 8% of SSA.

I usually get 6% dividends, or approx 50K-70K dividends a year from my portfolio, with the dividends and my pension it is 110% of my salary. My expenses are 25K per year, hopefully my portfolio will out live me.

As far as your AA, Vanguard has a questionnaire which you could access your AA https://personal.vanguard.com/us/FundsInvQuestionnaire

My AA is 92/7 which I am ok with since my job is very stable as a state civil servant.

Best
Last edited by retire2022 on Sat May 09, 2020 8:07 pm, edited 1 time in total.

mikemartin82
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Re: Goal Reached - Now What?

Post by mikemartin82 » Sat May 09, 2020 6:52 pm

Congrats! I'm in a similar situation, but I don't feel I'm ready because of the what you stated above... bridging from now until Medicare/SS. (so, I plan on working a few more years to put some icing on the cake).

I've spent the past few decades saving, but recently realized I need a smart drawdown plan - and how to invest for the next 30+ years. (The prospect of spending-down without a paycheck seems a little scary)

For instance, most of my retirement savings are in traditional tax-deferred retirement accounts and I'm worried about the tax bomb I will likely encounter with RMDs, IRMAA and NIIT.

I love the challenge of making the most of my finances. Hopefully, I will do well and pass along enough to help my kids live more comfortably.

Mike
Last edited by mikemartin82 on Sun May 10, 2020 7:40 am, edited 1 time in total.

printer86
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Re: Goal Reached - Now What?

Post by printer86 » Sat May 09, 2020 9:05 pm

The performance pressures of my job won’t allow me to ease into retirement over the course of a year or two. So, when I hit my number earlier this year, I contacted my manager and told him it was time to plan for my transition out. We worked out a process where I will train my replacement during the summer and then I’ll ride off into the sunset.

While I fully committed to my career for almost 35 years, I considered my employment relationships as transactional. The transactions have served their purpose.

I have a good idea of what I want to do when I retire, but one never knows what’s around the next corner.

CFM300
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Re: Goal Reached - Now What?

Post by CFM300 » Sun May 10, 2020 10:19 am

WIBD wrote:
Sat May 09, 2020 4:24 pm
I'm very interested in this Liability Matching Portfolio - thought I was up on all aspects of financial management but this is a new concept. Are there any 101 websites that I can learn more?
Two main approaches to planning for retirement income:

1. Probabilistic Safe Withdrawal Rate

Allocations are chosen based on probability of allowing a withdrawal of X% for Y years.

2. Liability Matching

Allocations are chosen based on matching assets to liabilities.

Wade Pfau provides a clear overview of both:

https://retirementresearcher.com/two-ph ... ity-based/

https://retirementresearcher.com/two-ph ... st-school/

William Bernstein's book, "The Ages of the Investor" is good as well. Be warned, however, that his audience is not early retirees. So after you've read the book and puzzled over some of the numbers and calculations, come back to the forum and search for his posts in which he answers questions about that. Here are two, both started by Klangfool, in which Bernstein responds:

viewtopic.php?t=122492

viewtopic.php?t=141181

CFM300
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Re: Goal Reached - Now What?

Post by CFM300 » Sun May 10, 2020 10:27 am

WIBD wrote:
Fri May 08, 2020 11:41 am
My concern is my risk profile. I have a huge hoard of cash between the bucket and other savings. I’m worried that my portfolio may be too conservative if I wind up not retiring right away; that I’m not putting enough money to work.
I have a similar problem in that I want to set aside several hundred thousand dollars so that we can buy a house with cash in a year or so if we want to. But we may decide that we don't want to buy, in which case, I'll regret not having invested the funds. My solution -- to minimize future regret -- is to keep 1/2 in completely safe accounts (online savings, short-term Treasuries, etc.) and put the other half in my typical bond investments.

student
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Re: Goal Reached - Now What?

Post by student » Sun May 10, 2020 10:39 am

I don't have any suggestion but congratulations on reaching your goal and your success.

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eye.surgeon
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Re: Goal Reached - Now What?

Post by eye.surgeon » Sun May 10, 2020 10:41 am

WIBD wrote:
Fri May 08, 2020 11:41 am
Hoping you folks can give me some guidance.

I’m 57 and due to obsessive saving, I’m now financially secure enough that I can retire whenever I’m ready. I’m seriously considering in the next year but really, I’m just not sure what I want to do. While I’ve had both Vanguard and Fidelity model my likelihood of success and both give high marks, I’m a bit worried about getting through the ~10 years before my pension, social security, and Medicare kick in. As well, I’m not sure if I’m emotionally prepared to stop working and not sure what my retirement will look like.
In preparation that I would retire soon, my portfolio allocation is what I call a hybrid Bucket: I have 2 years of living in cash, with the rest of the money stock/bond 60/40 that will re-balance regularly. Stock is 65% US, 35% international. Most of my portfolio is index funds and ETF’s and tax efficient across my 401(k), Roth IRA, and taxable brokerage account.

In addition to my retirement portfolio, I have a year of emergency funding, money put aside for a car in five years, and another fund for house remodels and other big-ticket items. My only debt is my mortgage which is minimal

My concern is my risk profile. I have a huge hoard of cash between the bucket and other savings. I’m worried that my portfolio may be too conservative if I wind up not retiring right away; that I’m not putting enough money to work.

I guess my real question is: what do you do when you’ve reached your goal long before you needed to?

Thanks for your help
Why not pay off your mortgage? Seems odd to be otherwise so financially secure and still be making payments every month. Congratulations on your accomplishment, well done.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett

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