If I were a retiree right now....

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justsomeguy2018
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If I were a retiree right now....

Post by justsomeguy2018 » Wed Mar 25, 2020 10:39 pm

I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.

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whodidntante
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Re: If I were a retiree right now....

Post by whodidntante » Wed Mar 25, 2020 10:42 pm

Lol. Alright.

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David Jay
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Re: If I were a retiree right now....

Post by David Jay » Wed Mar 25, 2020 10:44 pm

You aren’t. How is this actionable?
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

bhsince87
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Re: If I were a retiree right now....

Post by bhsince87 » Wed Mar 25, 2020 10:47 pm

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
Would you sell your stocks that are down 30% or so to move into that allocation?

That takes some conviction.
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

ionball
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Re: If I were a retiree right now....

Post by ionball » Wed Mar 25, 2020 10:47 pm

It's lucky for you. In the meantime, keep working to refine your analysis if you can. You can learn a lot here by asking specific questions.

Topic Author
justsomeguy2018
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Re: If I were a retiree right now....

Post by justsomeguy2018 » Wed Mar 25, 2020 11:02 pm

bhsince87 wrote:
Wed Mar 25, 2020 10:47 pm
justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
Would you sell your stocks that are down 30% or so to move into that allocation?

That takes some conviction.
Hmm probably not.

Actually I would go to 33% equities, 33% cash, 33% inflation securities

I guess that would just be a variation of the Permanent
Portfolio without the bond position.

MathWizard
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Re: If I were a retiree right now....

Post by MathWizard » Wed Mar 25, 2020 11:11 pm

David Jay wrote:
Wed Mar 25, 2020 10:44 pm
You aren’t. How is this actionable?
Anyone in an at will state can be a retiree tomorrow.

I have been developing retirement plans assuming forced retirement at a moment's notice since 2008. My wife lost her job in 2008, and I was furloughed for a short time. This with the first child entering college.

Even people with fairly secure jobs found themselves without jobs in 2008. 2020 could be worse.

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Raybo
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Re: If I were a retiree right now....

Post by Raybo » Wed Mar 25, 2020 11:43 pm

Posting
Another
Nutty
Investment
Comment
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

b.lock
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Re: If I were a retiree right now....

Post by b.lock » Wed Mar 25, 2020 11:46 pm

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
The only logical choice seems 50/50 cash and inflation protected assets.
Ok. For how long? Forever? For 6 months?

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Doom&Gloom
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Re: If I were a retiree right now....

Post by Doom&Gloom » Wed Mar 25, 2020 11:56 pm

Raybo wrote:
Wed Mar 25, 2020 11:43 pm
Posting
Another
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I see what you did there.

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SevenBridgesRoad
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Re: If I were a retiree right now....

Post by SevenBridgesRoad » Thu Mar 26, 2020 12:05 am

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets....

...The only logical choice seems 50/50 cash and inflation protected assets.
If I were a retiree right now...wait a minute, I am.

And, I don't think I'm being illogical even though we have a plan different from what you say is the only logical plan.

My wife and I have an overall plan, using Variable Percentage Withdrawal with a Target Date Fund (VTINX, 30/70 equities/bonds), cash for three years of expenses, a Social Security strategy, two deferred income annuities, no debt including a paid-for home, and the ability to significantly scale back as needed.

I’m not saying ours is the only logical approach. But I am suggesting yours isn’t either. There’s more than one way to skin that cat.
Retired 2018 age 61 | "Not using an alarm is one of the great glories of my life." Robert Greene

Unladen_Swallow
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Re: If I were a retiree right now....

Post by Unladen_Swallow » Thu Mar 26, 2020 12:14 am

Ok then.

*Is this the last thread?
"I think it's much more interesting to live not knowing than to have answers which might be wrong." - Richard Feynman

Dandy
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Re: If I were a retiree right now....

Post by Dandy » Thu Mar 26, 2020 8:23 am

You might consider Dr. Bernstein's idea of having 20 or more of the drawdown dollars needed to supplement your retirement income in "safe" fixed income (despite the low yield) and invest the rest anyway you want. He would probably still suggest short term treasuries and FDIC products and as he said "hold your nose when it comes to yield".

I hate the current low yields but the fixed income portion of most allocations is more for safety and to modify the equity risk to approximate your risk tolerance. I do like having a bit of inflation protection even though recent history and looking forward inflation spikes seem unlikely despite efforts by governments to get it up to 2%.

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Third Son
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Re: If I were a retiree right now....

Post by Third Son » Thu Mar 26, 2020 8:26 am

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
I am retired...you don't know me... :confused
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon

bigskyguy
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Re: If I were a retiree right now....

Post by bigskyguy » Thu Mar 26, 2020 8:27 am

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
We are retired. Our framework is built completely on the “Safety First” approach promulgated by many smart advisers (Wade Pfau, Bill Bernstein, et al). We have ALL of our basic expenses covered by TIPS, CDs, zero coupon treasuries, and deferred annuities. Wasn’t easy (emotionally) to set up when markets were roaring, but we did it. That portion of our portfolio is sacrosanct, untouchable, and we withdraw from it once a year. Cannot emphasize just how reassuring that all is right now.
What is left (about 25% of our total portfolio) is an emergency fund (about 5% of that 25% residual - in I bonds),with the balance (20% of our total portfolio) the only piece that I consider worth risking. And it is, as we speak, entirely in cash (as of 2 weeks ago was 100% in the market ) and gold.
Emphasis here is that for us, the only piece of our retirement portfolio I am willing to put at risk is that which I can honestly afford to put at risk.
I am 70, my spouse 61. It has taken us time to get to this place, which I wouldn’t consider appropriate should you be a decade or more behind us. But it is a very comfortable place to be now.
I wish to emphasize that honesty with your estimate of your risk tolerance is imperative. Few of us are.

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Sandtrap
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Re: If I were a retiree right now....

Post by Sandtrap » Thu Mar 26, 2020 8:30 am

Yes
This would work better if you had a portfolio size of 60X or greater at age 65. 💰

j🌺
Wiki Bogleheads Wiki: Everything You Need to Know

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Sandtrap
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Re: If I were a retiree right now....

Post by Sandtrap » Thu Mar 26, 2020 8:32 am

bigskyguy wrote:
Thu Mar 26, 2020 8:27 am
justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
We are retired. Our framework is built completely on the “Safety First” approach promulgated by many smart advisers (Wade Pfau, Bill Bernstein, et al). We have ALL of our basic expenses covered by TIPS, CDs, zero coupon treasuries, and deferred annuities. Wasn’t easy (emotionally) to set up when markets were roaring, but we did it. That portion of our portfolio is sacrosanct, untouchable, and we withdraw from it once a year. Cannot emphasize just how reassuring that all is right now.
What is left (about 25% of our total portfolio) is an emergency fund (about 5% of that 25% residual - in I bonds),with the balance (20% of our total portfolio) the only piece that I consider worth risking. And it is, as we speak, entirely in cash (as of 2 weeks ago was 100% in the market ) and gold.
Emphasis here is that for us, the only piece of our retirement portfolio I am willing to put at risk is that which I can honestly afford to put at risk.
I am 70, my spouse 61. It has taken us time to get to this place, which I wouldn’t consider appropriate should you be a decade or more behind us. But it is a very comfortable place to be now.
I wish to emphasize that honesty with your estimate of your risk tolerance is imperative. Few of us are.
“Permanent Portfolio” + LMP. ??

j🌺
Wiki Bogleheads Wiki: Everything You Need to Know

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firebirdparts
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Re: If I were a retiree right now....

Post by firebirdparts » Thu Mar 26, 2020 8:35 am

No gold?
A fool and your money are soon partners

Silk McCue
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Re: If I were a retiree right now....

Post by Silk McCue » Thu Mar 26, 2020 8:41 am

You should write a book. Better yet you should read some that are recommended by Bogleheads.

https://www.bogleheads.org/RecommendedReading.php

At some point you should actually take advantage of the wisdom shared on this site and then be able to help others that come along.

Cheers

bigskyguy
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Re: If I were a retiree right now....

Post by bigskyguy » Thu Mar 26, 2020 8:49 am

Sandtrap wrote:
Thu Mar 26, 2020 8:32 am
bigskyguy wrote:
Thu Mar 26, 2020 8:27 am
justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
We are retired. Our framework is built completely on the “Safety First” approach promulgated by many smart advisers (Wade Pfau, Bill Bernstein, et al). We have ALL of our basic expenses covered by TIPS, CDs, zero coupon treasuries, and deferred annuities. Wasn’t easy (emotionally) to set up when markets were roaring, but we did it. That portion of our portfolio is sacrosanct, untouchable, and we withdraw from it once a year. Cannot emphasize just how reassuring that all is right now.
What is left (about 25% of our total portfolio) is an emergency fund (about 5% of that 25% residual - in I bonds),with the balance (20% of our total portfolio) the only piece that I consider worth risking. And it is, as we speak, entirely in cash (as of 2 weeks ago was 100% in the market ) and gold.
Emphasis here is that for us, the only piece of our retirement portfolio I am willing to put at risk is that which I can honestly afford to put at risk.
I am 70, my spouse 61. It has taken us time to get to this place, which I wouldn’t consider appropriate should you be a decade or more behind us. But it is a very comfortable place to be now.
I wish to emphasize that honesty with your estimate of your risk tolerance is imperative. Few of us are.
“Permanent Portfolio” + LMP. ??

j🌺
Not really. More LMP (75%) + Ibond (5%) + gold (5%) + dealer’s choice (15%). Dealer’s choice is presently cash, which will change when the dust settles (likely Total Market).

CnC
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Re: If I were a retiree right now....

Post by CnC » Thu Mar 26, 2020 8:55 am

Raybo wrote:
Wed Mar 25, 2020 11:43 pm
Posting
Another
Nutty
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Comment
Still too many Rosy posts for me.

I'll feel better when the board is full of nothing but these threads, it will mean the light will show soon.

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JoeRetire
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Re: If I were a retiree right now....

Post by JoeRetire » Thu Mar 26, 2020 9:14 am

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
The only logical choice seems 50/50 cash and inflation protected assets.
That might work for you, but there are plenty of other logical choices.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

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Will do good
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Re: If I were a retiree right now....

Post by Will do good » Thu Mar 26, 2020 9:25 am

Raybo wrote:
Wed Mar 25, 2020 11:43 pm
Posting
Another
Nutty
Investment
Comment
+1,000

Unladen_Swallow
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Re: If I were a retiree right now....

Post by Unladen_Swallow » Thu Mar 26, 2020 2:56 pm

Raybo wrote:
Wed Mar 25, 2020 11:43 pm
Posting
Another
Nutty
Investment
Comment
:sharebeer
"I think it's much more interesting to live not knowing than to have answers which might be wrong." - Richard Feynman

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TomatoTomahto
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Re: If I were a retiree right now....

Post by TomatoTomahto » Thu Mar 26, 2020 3:02 pm

If I were a retiree...
Daidle deedle daidle
Daidle daidle deedle daidle dumb
Okay, I get it; I won't be political or controversial. The Earth is flat.

Teague
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Re: If I were a retiree right now....

Post by Teague » Thu Mar 26, 2020 3:06 pm

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
That's nice.
Semper Augustus

FrankLUSMC
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Re: If I were a retiree right now....

Post by FrankLUSMC » Thu Mar 26, 2020 4:05 pm

David Jay wrote:
Wed Mar 25, 2020 10:44 pm
You aren’t. How is this actionable?
We are in the "Theory, News &General" thread. This doesn't need to be actionable.

Silk McCue
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Re: If I were a retiree right now....

Post by Silk McCue » Thu Mar 26, 2020 4:08 pm

FrankLUSMC wrote:
Thu Mar 26, 2020 4:05 pm
David Jay wrote:
Wed Mar 25, 2020 10:44 pm
You aren’t. How is this actionable?
We are in the "Theory, News &General" thread. This doesn't need to be actionable.
Because that is the elephant in the room.

Cheers

Chuck107
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Re: If I were a retiree right now....

Post by Chuck107 » Thu Mar 26, 2020 4:12 pm

Perspectives and life situations usually change after retirement.
Unless you have retired before, that advice is called shooting from the hip. I'm being kind. :twisted:
Retired 16 yrs, go with the flow.

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sergeant
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Re: If I were a retiree right now....

Post by sergeant » Thu Mar 26, 2020 4:14 pm

bigskyguy wrote:
Thu Mar 26, 2020 8:49 am
Sandtrap wrote:
Thu Mar 26, 2020 8:32 am
bigskyguy wrote:
Thu Mar 26, 2020 8:27 am
justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
I would be 50% cash and 50% inflation-protected assets.

Cash in case of further asset deflation, the other 50% in case of the opposite scenario, inflation.

Why?

Bond yields are nothing, if rates further decrease you get nothing, if rates increase your existing bonds will decrease in value. If there is inflation rates will have to rise and your bonds will get crushed. If there is deflation rstes will stay anemic and you'll get nothing.

Equities will yield nothing, companies with no cash flow cannot grow their business or pay a dividend. I don't see how equities can beat inflation if they have no cash flow.

The only logical choice seems 50/50 cash and inflation protected assets.
We are retired. Our framework is built completely on the “Safety First” approach promulgated by many smart advisers (Wade Pfau, Bill Bernstein, et al). We have ALL of our basic expenses covered by TIPS, CDs, zero coupon treasuries, and deferred annuities. Wasn’t easy (emotionally) to set up when markets were roaring, but we did it. That portion of our portfolio is sacrosanct, untouchable, and we withdraw from it once a year. Cannot emphasize just how reassuring that all is right now.
What is left (about 25% of our total portfolio) is an emergency fund (about 5% of that 25% residual - in I bonds),with the balance (20% of our total portfolio) the only piece that I consider worth risking. And it is, as we speak, entirely in cash (as of 2 weeks ago was 100% in the market ) and gold.
Emphasis here is that for us, the only piece of our retirement portfolio I am willing to put at risk is that which I can honestly afford to put at risk.
I am 70, my spouse 61. It has taken us time to get to this place, which I wouldn’t consider appropriate should you be a decade or more behind us. But it is a very comfortable place to be now.
I wish to emphasize that honesty with your estimate of your risk tolerance is imperative. Few of us are.
“Permanent Portfolio” + LMP. ??

j🌺
Not really. More LMP (75%) + Ibond (5%) + gold (5%) + dealer’s choice (15%). Dealer’s choice is presently cash, which will change when the dust settles (likely Total Market).
I think you made a mistake pulling the 20% of your portfolio out of equities. Why did you do it, fear? The rest of your portfolio was set up to handle this sort of thing.
Lincoln 3 EOW! AA 40/60.

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tennisplyr
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Re: If I were a retiree right now....

Post by tennisplyr » Thu Mar 26, 2020 4:25 pm

Raybo wrote:
Wed Mar 25, 2020 11:43 pm
Posting
Another
Nutty
Investment
Comment

False
Expectations
Appearing
Real
Those who move forward with a happy spirit will find that things always work out.

GCD
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Re: If I were a retiree right now....

Post by GCD » Thu Mar 26, 2020 4:29 pm

justsomeguy2018 wrote:
Wed Mar 25, 2020 10:39 pm
Your post
Doesn't make sense since it doesn't take into account anyone's personal situation, cash flow needs, investment horizon, etc.

panhead
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Re: If I were a retiree right now....

Post by panhead » Thu Mar 26, 2020 4:33 pm

SevenBridgesRoad wrote:
Thu Mar 26, 2020 12:05 am
If I were a retiree right now...wait a minute, I am.

And, I don't think I'm being illogical even though we have a plan different from what you say is the only logical plan.

My wife and I have an overall plan, using Variable Percentage Withdrawal with a Target Date Fund (VTINX, 30/70 equities/bonds), cash for three years of expenses, a Social Security strategy, two deferred income annuities, no debt including a paid-for home, and the ability to significantly scale back as needed.

I’m not saying ours is the only logical approach. But I am suggesting yours isn’t either. There’s more than one way to skin that cat.
Now THIS seems like a very good strategy for a retiree!

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