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No stock market investments in your retirement plan?
Old 05-02-2019, 10:01 AM   #1
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No stock market investments in your retirement plan?

Anyone here who has never had their retirement/investments/savings/401K in the stock market?

Our 401k has always been in no risk/low yield Fed bonds. Our life savings have always been in credit union CDs.
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Old 05-02-2019, 10:15 AM   #2
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Such lack of diversification is too high risk for my taste.
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Old 05-02-2019, 10:18 AM   #3
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Originally Posted by Camping View Post
Anyone here who has never had their retirement/investments/savings/401K in the stock market?

Our 401k has always been in no risk/low yield Fed bonds. Our life savings have always been in credit union CDs.
No risk? I hear a loud shout coming your way from me an others:

"Are you including inflation in your list of risks?"
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Old 05-02-2019, 10:21 AM   #4
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We have never had anything in Equities since FIRE, has worked out fine for us. A lot of members here will pooh pooh it and spout off about inflation, which in some cases is pertinent.

However, If your personal inflation rate is low, (Not some statistical CPI published rate, your OWN PERSONAL Rate), you live within your means and your fixed income return are reasonable and less than your withdrawal rate, I would sleep well and keep on trucking.
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Old 05-02-2019, 10:30 AM   #5
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Some get hung up on NO equities. I'm at about 2-3% stocks. Close enough to 0 for now.
But there will be people screaming here shortly that any AA with less stocks than their AA means you're an idiot for thinking differently than they do.
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Old 05-02-2019, 10:31 AM   #6
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Originally Posted by ShokWaveRider View Post
We have never had anything in Equities since FIRE, has worked out fine for us.
So far...
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Old 05-02-2019, 10:32 AM   #7
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How long has it been in these low yield investments ?
How much longer until retirement ?
How long are you planning to live ?

I've been pretty much the opposite, now I'm moving some over to low yield bonds and treasury bonds, so I'll have something left after the big drop.
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Old 05-02-2019, 10:41 AM   #8
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So far...
And they're off!
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Old 05-02-2019, 10:44 AM   #9
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One share Allstate stock left over from leaving the Sears in 1964. The rest in IBonds and guaranteed annuities. Don't even think about money any more.
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Old 05-02-2019, 10:49 AM   #10
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We have never had anything in Equities since FIRE, has worked out fine for us. A lot of members here will pooh pooh it and spout off about inflation, which in some cases is pertinent.

However, If your personal inflation rate is low, (Not some statistical CPI published rate, your OWN PERSONAL Rate), you live within your means and your fixed income return are reasonable and less than your withdrawal rate, I would sleep well and keep on trucking.
Different question than the masses.
I am into all the numbers and track all my expenses, but wondering just how easy it is to track personal inflation.

Example - if your internet/TV costs $100 in 2019 and goes up to $105 in 2020 with the same services, okay then 5%.
If it goes up to $120 in 2020 because one added HBO, then are you actually breaking down the $15 for HBO as budget creep from the $5 as purely inflation?
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Old 05-02-2019, 10:50 AM   #11
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Didn't we just have a thread or poll on this?
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Old 05-02-2019, 10:59 AM   #12
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And they're off!
It's helpful to point out what may be a weakness in a person's decision making matrix. Ultimately, we each decide what is best for us. The fact that the OP asked indicates that he/she may have some doubts and is still working out what is the individual best way.
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Old 05-02-2019, 10:59 AM   #13
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Different question than the masses.
I am into all the numbers and track all my expenses, but wondering just how easy it is to track personal inflation.

Example - if your internet/TV costs $100 in 2019 and goes up to $105 in 2020 with the same services, okay then 5%.
If it goes up to $120 in 2020 because one added HBO, then are you actually breaking down the $15 for HBO as budget creep from the $5 as purely inflation?
The way We do it.... We have tracked our expenses for about 12 years, 2 do not count as we were working and spent a lot more on stuff like Gas, clothes, etc.

So in the last 10 years it is simple, I look at what we spend 10 years ago, compare it with the other 9 years until now and take the average increase, decrease etc. In our case some of the big numbers such as RE Taxes, Insurance, etc. actually went down. E.g.: Our RE Taxes were $8k in 2008 and are $5.5k now, Car insurance was $1800 a year, it is $650 now as we went to 1 car (Remember this is personal inflation). Car leases are also down as money was cheap, that may change going forward. Home owners Insurance has also gone down. We have not moved so the numbers are good.

Yard maintenance, HOA, Cable, Electricity (Now on equal billing), and gas are also down a little. Maybe because we use less or have adjusted our subscriptions. Food and drink is up though, probably because we eat better food and drink better wine.
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Old 05-02-2019, 12:08 PM   #14
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The way We do it.... We have tracked our expenses for about 12 years, 2 do not count as we were working and spent a lot more on stuff like Gas, clothes, etc.

So in the last 10 years it is simple, I look at what we spend 10 years ago, compare it with the other 9 years until now and take the average increase, decrease etc. In our case some of the big numbers such as RE Taxes, Insurance, etc. actually went down. E.g.: Our RE Taxes were $8k in 2008 and are $5.5k now, Car insurance was $1800 a year, it is $650 now as we went to 1 car (Remember this is personal inflation). Car leases are also down as money was cheap, that may change going forward. Home owners Insurance has also gone down. We have not moved so the numbers are good.

Yard maintenance, HOA, Cable, Electricity (Now on equal billing), and gas are also down a little. Maybe because we use less or have adjusted our subscriptions. Food and drink is up though, probably because we eat better food and drink better wine.
Okay so you don't track it down to the level of my previous example, so it is more of a net change without regard to increases/decreases in choices vs. just the inflationary aspects of existing choices.
Sounds good.
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Old 05-02-2019, 12:21 PM   #15
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As my step mother retired, I got involved with her finances. She worked for the state and had her entire retirement savings in some kind of government bond fund making around 2%. She had been in the account, exclusively, for 30+ years.

So, I got involved and moved that amount into Wellesley. Still conservative. She has a government pension/account that was annuitized and provides monthly income. She now collects SS.

Her monthly take home is greater than her take home before retirement.

Other than taking RMDs, she doesn't touch her retirement account.

Her living expenses are very compatible with her income, so all is well.
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Old 05-02-2019, 01:18 PM   #16
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Okay so you don't track it down to the level of my previous example, so it is more of a net change without regard to increases/decreases in choices vs. just the inflationary aspects of existing choices.
Sounds good.
Sort of yes, we track it on an annual expenditure basis. We do not include vacations and we sometimes exaggerate on them.
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Old 05-02-2019, 03:13 PM   #17
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Investing all retirement money in CD's and bonds would have meant changing my retirement age from 56 to 66. Why would I want to work another 10 years?
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Old 05-02-2019, 03:57 PM   #18
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Being invested in stocks or not was not a criteria for us to retire (the first or second time) and we have now and had then a lot less of a stash than some here. We had enough to retire the first time we did in 2002 (with substantially less than we have accumulated now). Then after we returned from a 3 year sailing sabbatical in the Western Caribbean, my old company offered me a contract until 2013, then I retired for the final time. That income certainly made up for any stock gains I would have had and then some. That along with the returns for some very long term Fixed income investments from the good interest rate years. Now if we made 0% for the next 10 years it would not affect our current Quality of Life. So why start investing now when the market is at an all time high, that is a recipe for disaster. Just our own scenario and my opinion. Hence the "Won the Game" theory.

We were fortunate to secure some 3.85% 5 Year CDs or ALL of our qualified funds. Play and every day living money is in VG MM (for now) Paying 2.45%. That is fine for now. I must say though if there is another significant downturn, I my dabble as NOW we can afford to.

In addition we are seriously considering moving to a small Mediterranean country as we are getting fed up of the political direction the USA is going in. We live on an Island now, all be it being connected to the mainland by a bridge or 2, so moving to another would not really make a lot of difference. Only a Ferry Vs a Bridge.

Also remember we were DINKS for nearly 30 years, with no heirs, so nice houses, exotic cars and nice holidays were the theme. Now retired we do not need the exotics anymore and home is paid for. The fact our SoCAL home tripled in value didn't hurt either. Buying a home 1000 sqft larger in Florida for 1/3 the price also helped. So holidays are the only extravagance now. That along with good aged steak, fish and nice wine.
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Old 05-02-2019, 04:04 PM   #19
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I need some equities to make my withdrawal plan work. Otherwise I have to work another 5 years.

If it works for you, then more power to ya. If I had enough to live off CD and Bond interest, I would be happy as a lark.
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Old 05-02-2019, 05:04 PM   #20
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With all the other contentious discussions we have here (ex: when to take SS) I'm surprised there isn't a more regular vibrant and vocal discussion on the impact of inflation and how it impacts non-cola'd pensions, CD, bonds, annuities and so on.

Many here worry about a 1% expense ratio or staying within a certain tax bracket when to me, over time, inflation is the bigger and more silent thief.

Yes, I know it's been minimal of late but if all I had was a non-cola'd pension with 30 years ahead of me, that is what I'd be focused on. Today, you'd need twice as much money to buy what you were able to buy in 1989.
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