willthrill81 wrote:I'm prepared and preparing for contingencies apart from my retirement fund.
That's why I'm working to pay off my mortgage in roughly 3.5 years. We have a good emergency fund.
Oh, okay, so you're not 100% stocks.
One part of your money is 100% stocks, and another part of your money is not.
And if you put it all together, we might find that you are 90/10, 80/20 or even 70/30... After all, the equity in your house is not in stocks. Shouldn't it be? Over 30 years, you'll likely do better with all that mortgage money in stocks instead of in your house. But you choose to play it safe there, because it gives you security to know, with the house paid off, that your bills are much lower, and you can survive a job loss or bad economic times.
So you're just like many of us after all.
When it seems that I'm around 10 years from retirement, I'll back down to probably 70/30 or 60/40. But the historical likelihood of finishing
better after 20 years from now with 90/10 or 80/20 rather than 100% is very low.
Oh, your original post asked why anyone would be less than 100% stocks... But I see you DO understand why some of us might be... Because we're closer to retirement... Sure, if you have 20-30 years, go ahead and be 100% stocks.
If equities drop, I'll do my invest to increase my savings rate even more.
Just FYI, the odds of you losing your job are HIGHER during a general economic recession. So stocks dropping at the same time you lose the ability to save more (or at all) are two events that are somewhat correlated.