What to do/read/follow if retiring in 8-10 years?

[Mrxyz]

Hi
I follow the 3 fund portfolio, with good NW and no EF, no debt and kids 529 paid off. Thinking forward, I plan to retire in 8 to 10 years. So do I keep going forward with my 3 fund portfolio with yearly re-balance with gradual increase in bond allocation until I retire OR do I have to do anything more/different?
Thanks

[arcticpineapplecorp.]

sounds right. estate planning and/or long term care concerns (insurance?)

[Mrxyz]

sounds right. estate planning and/or long term care concerns (insurance?)

Thanks for the reply!

Estate planning has NOT been done yet (gulp!, yes, I/we know, we need to get it done!)
Long term care - Do not have insurance -- very confused with options presented to us. Any good resources?

[David Jay]

Jane Quinn Bryant's book: "How to Make your Money Last" is a good one. It covers many aspects - Social Security, Medicare, Estate Planning, etc.

[Sandtrap]

"Ages of the Investor: Life Cycle Investing" by Bernstein

j

[Stinky]

Are you tracking your monthly expenses? If not, this would be a great time to start.

Knowing your expenses will be useful as you plot out the “draw down” phase of your financial life.

[johnny]

Jane Quinn Bryant's book: "How to Make your Money Last" is a good one. It covers many aspects - Social Security, Medicare, Estate Planning, etc.

+1

This book more than others helped me understand the mechanics of living off of retirement savings, what options exist to manage expenses, and what special situations to expect in retirement (taxes, healthcare, etc...). I haven't retired yet, but understanding those mechanics improves my confidence in the plan. I especially love her assurance early in the book: "Sooner or later, everyone figures out an acceptable way of living commensurate with income."

[chassis]

Hi
I follow the 3 fund portfolio, with good NW and no EF, no debt and kids 529 paid off. Thinking forward, I plan to retire in 8 to 10 years. So do I keep going forward with my 3 fund portfolio with yearly re-balance with gradual increase in bond allocation until I retire OR do I have to do anything more/different?
Thanks

I am in the same situation as the characteristics in your first sentence, but with EF.

In my view, today is the time to be aggressive.

Do: rebalance to the maximum US equity position you are able to tolerate, plus a little bit more

Read: Bloomberg, WSJ, FT.com, Handelsblatt, and all articles you can find on investing

Follow: your gut

[LearningAlot]

retired 3 years ago, three items strike me as particularly important

1. understand your spending, track it now, get good at forecasting it accurately

2. learn all you can about "sequence of return" risk and its' implication to your retirement date and asset allocation

3. save aggressively

[Sandi_k]

Work on making sure you have assets in pre and post-tax accounts, so you can control your income to some extent once retired.

[dogagility]

Bond tent, perhaps. https://www.kitces.com/blog/managing-po ... -red-zone/

[sailaway]

Bond tent, perhaps. https://www.kitces.com/blog/managing-po ... -red-zone/

There are reasons for doing this, but when we were actually ready to start building a bond/CD ladder/tent, we turned to increasing our bond funds, instead. For us, it was the simplicity factor.

I will reiterate what others have already said. For us, feeling confident has been about getting a grasp on:

-current spending and anticipated spending with the lifestyle change

-the fungibility of money. really processing this is key for the next point

-a full understanding of our different account types and how we will manage income/taxes (and probably ACA subsidies) when we don't have a paycheck coming in

-a health insurance plan (even if it is Medicare, there are a lot of factors that need to be sorted)

-a life plan: what are you retiring to?

[986racer]

Living Off Your Money: The Modern Mechanics of Investing During Retirement with Stock and Bonds

And also the Early Retirement Now web series

[Mrxyz]

Bond tent, perhaps. https://www.kitces.com/blog/managing-po ... -red-zone/

Very fascinating read!
What is interesting is that I have read this many moons ago and did not make much sense! But NOW when it is relevant to my situation it makes a lot of sense! Basically, I understand it way better.
Question- Does Kitces assume there WILL be a market downturn and thus a bond tent will protect you OR does he want a bond tent just to be safer?
Many thanks!

[ruralavalon]

Hi
I follow the 3 fund portfolio, with good NW and no EF, no debt and kids 529 paid off. Thinking forward, I plan to retire in 8 to 10 years. So do I keep going forward with my 3 fund portfolio with yearly re-balance with gradual increase in bond allocation until I retire OR do I have to do anything more/different?
Thanks

Makes sense to me.

I agree with the suggestion to track current spending in order to have a solid estimate of your retirement living expenses. Also shop for rates on health insurance, so that you can include that in your estimate.

[Mrxyz]

Bond tent, perhaps. https://www.kitces.com/blog/managing-po ... -red-zone/

There are reasons for doing this, but when we were actually ready to start building a bond/CD ladder/tent, we turned to increasing our bond funds, instead. For us, it was the simplicity factor.

I will reiterate what others have already said. For us, feeling confident has been about getting a grasp on:

-current spending and anticipated spending with the lifestyle change

-the fungibility of money. really processing this is key for the next point

-a full understanding of our different account types and how we will manage income/taxes (and probably ACA subsidies) when we don't have a paycheck coming in

-a health insurance plan (even if it is Medicare, there are a lot of factors that need to be sorted)

-a life plan: what are you retiring to?

Thanks for the salient poinnts!

1. Yes, I plan to increase bond funds instead of ladder business. I thought I had it simple but need to be "more simple"!
2. Current spending - We do not spend enough! Barely 50k per year with NW above 4M.........and COVID has ruined all travel plans. Well, hope the next few years are better.
3. I need to read about ACA subsidies.
4. I need to read about Medicare/Health insurance plans for future
5. Life plan - wow this one is tough - read, travel, exercise, meet family more often, volunteer, continue teaching - some of these affected by COVID of course.

[Mrxyz]

Hi
I follow the 3 fund portfolio, with good NW and no EF, no debt and kids 529 paid off. Thinking forward, I plan to retire in 8 to 10 years. So do I keep going forward with my 3 fund portfolio with yearly re-balance with gradual increase in bond allocation until I retire OR do I have to do anything more/different?
Thanks

Makes sense to me.

I agree with the suggestion to track current spending in order to have a solid estimate of your retirement living expenses.

Asking DW to spend more! We are around 50k per year with NW of 4M. But lifestyle is very nominal............I/we are to blame as savings ingrained and bogleheads philosophy and thought processes also helped..............

[dogagility]

Bond tent, perhaps. https://www.kitces.com/blog/managing-po ... -red-zone/

Very fascinating read!
What is interesting is that I have read this many moons ago and did not make much sense! But NOW when it is relevant to my situation it makes a lot of sense! Basically, I understand it way better.
Question- Does Kitces assume there WILL be a market downturn and thus a bond tent will protect you OR does he want a bond tent just to be safer?
Many thanks!

Glad you enjoyed it!

A bond tent is to protect against an unfavorable sequence of returns during the drawdown (i.e. retirement) period. You will read it called "sequence of returns" risk on this forum. In a nutshell, large portfolio decreases during the first few years of a typical retirement period (20-30 years) are detrimental to having sufficient funds during the entirety of the period.

Kitces isn't assuming their will be a large market downturn, but a person should be aware of that possibility and (ideally) prepare for it.

Of course, putting up a bond tent and then not experiencing a market downturn during the critical peri-retirement period will result in less money overall during retirement. However, predicting the future is not easy...

[Fallible]

Jane Quinn Bryant's book: "How to Make your Money Last" is a good one. It covers many aspects - Social Security, Medicare, Estate Planning, etc.

Very much agree on this book by Jane Bryant Quinn for near retirees and retirees.

[Tattarrattat]

Have read a number of (pre) retirement planning books in the last year. The best I thought was Dana Anspach's Control Your Retirement Destiny. Clear planning advice with examples and numbers and worksheets so you can literally just copy what she does. Well organized and meticulous. Clearly written by someone whose day job is actually financial planning. The Quinn book is good, I'm a fan of hers in general, but is not as concrete and actionable, I think because it's written by a journalist, not someone who does it every day for a living. Still very good and worth reading. But the Anspach book is best as a true road map.

[ruralavalon]

How about The Boglehead's Guide to Retirement Planning? It's pretty comprehensive.