Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Risk averse retirement investing
Old 02-06-2014, 04:20 PM   #1
Confused about dryer sheets
 
Join Date: Feb 2014
Location: Milwaukee
Posts: 3
Risk averse retirement investing

I am retired and need to protect my assets with safe investing. I only need to keep a step or two ahead of inflation, not significantly grow my assets.

I want to sleep easily at night and not have to worry about market gyrations, corrections or worse. Suggestions?
__________________

__________________
Dolphin Boy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-06-2014, 04:48 PM   #2
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,501
The Millionaire Teacher goes into basic investing and asset allocation. It is an easy read, not at all difficult to understand. Others will be along shortly with suggestions too.

Welcome to the forum!

Tell us a bit more about yourself in the Hi, I am... thread.
__________________

__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 02-06-2014, 05:11 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,017
Are you also averse to inflation risk? If so, you might be best served by a balanced approach........or just lowering your annual spending to 2% of NW or less.
__________________
Meadbh is offline   Reply With Quote
Old 02-06-2014, 05:38 PM   #4
Recycles dryer sheets
SteveL's Avatar
 
Join Date: Aug 2005
Posts: 380
Safe investing is an oxymoron. There is no way to beat inflation without taking some risk.
Do yourself a favor, there are a lot of these on the internet. Take one and find out how risk averse you are.

Risk Assessment Tools: Risk Analysis Tool, Risk Profile Questionnaire, Financial Risk Tolerance
__________________
Retired -- 2001
SteveL is offline   Reply With Quote
Old 02-06-2014, 05:48 PM   #5
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,834
Hi Dolphin Boy, and welcome to the Early Retirement Forum.

Personally I am very risk averse as well, especially now that I am retired. So, I will recommend to you exactly what I found to be the most helpful, for me.

Read any half dozen books from this link that appeal to you: Investment Books

These books will give you a good, solid background in investing and in establishing an asset allocation that corresponds to your risk tolerance.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 02-06-2014, 05:56 PM   #6
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,980
When Obgyn shows up, he can give you some tips
__________________
Doing things today that others won't, to do things tomorrow that others can't. Of course I'm referring to workouts, not robbing banks.
DFW_M5 is offline   Reply With Quote
Old 02-06-2014, 05:58 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
You may wish to read Zvi Bodie's "Worry-Free Investing" which was all the rage when Treasury Inflation Protected Securites pay a great rate could be purchased. Of course, Prof. Bodie is in his 70's and still working. He worries about retirement so much that he just has to keep working.

Worry Free Investing | Zvi Bodie

Another alternative would be to investigate whether a SPIA (single premium immediate annuity) would make sense for you.
__________________
LOL! is offline   Reply With Quote
Old 02-06-2014, 05:59 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,017
Quote:
Originally Posted by DFW_M5 View Post
When Obgyn shows up, he can give you some tips
But if you listen to Obgyn, you should also seek out Cyclinginvestor!
__________________
Meadbh is offline   Reply With Quote
Old 02-06-2014, 07:35 PM   #9
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
Quote:
Originally Posted by W2R View Post
Hi Dolphin Boy, and welcome to the Early Retirement Forum.

Personally I am very risk averse as well, especially now that I am retired. So, I will recommend to you exactly what I found to be the most helpful, for me.

Read any half dozen books from this link that appeal to you: Investment Books

These books will give you a good, solid background in investing and in establishing an asset allocation that corresponds to your risk tolerance.
+1
If you don't educate yourself about investing (I'm making an ignorant assumption that you're not already) then you may never know if your investments are safe/conservative or not. This knowledge will help you stick to your plans when the inevitable market crashes occur.
__________________
walkinwood is offline   Reply With Quote
Old 02-06-2014, 07:45 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,967
If past history is any indication, this chart should give you some idea what kind of returns you might expect for a given asset allocation.

I couldn't recommend them, but a SPIA would provide a guaranteed return barring a default (historically almost unheard of) if you can't sleep with any fluctuation in returns.

The more conservative you are, the more you'll need, or the less you'll have available to spend.
Attached Images
File Type: png E_03%20New%20Diversification_1008.png (33.8 KB, 481 views)
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Risk averse retirement investing
Old 02-06-2014, 08:12 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,321
Risk averse retirement investing

Buy
I Bonds, Tips, and deferred annuities .

But wait a while on some off the annuities until interest rates rise and you can get a better deal.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 02-06-2014, 09:14 PM   #12
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
Ok here we go... To the OP : a minority of the participants to this website are very conservative. I am one of them. You are not alone.

To answer your question, my portfolio is 90+% in CDs, munis, and equivalent. I also bought some deferred annuities. I hate risk. The only risk I am willing to take is the risk of just keeping up with inflation.


Quote:
Originally Posted by DFW_M5 View Post
When Obgyn shows up, he can give you some tips
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 02-06-2014, 11:35 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
I am okay with just keeping up with inflation as well. We will try to keep our spending pretty low in comparison to our retirement income streams so we don't really need a high rate of return to be comfortable. I just don't want to lose half our life savings, especially early on in retirement.

We're more in the we've won the game why blow it now camp of investing.

We have TIPS, I bonds, several stable value funds from former 401Ks, CDs, short term bond funds, some stocks, some Treasuries at 4% and a mix of other stuff.

We have a 30 year, low rate mortgage offset by non-COLAed pension income, too, for now.
__________________
daylatedollarshort is offline   Reply With Quote
Old 02-07-2014, 12:24 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
And if I remember the timing of your investment in Wellesley correctly, it is doing pretty well so far, even with the January dip.

OP, Vanguard's Wellesley Income fund is a good conservative balanced fund that you could consider as one of your core holdings.

Quote:
Originally Posted by obgyn65 View Post
Ok here we go... To the OP : a minority of the participants to this website are very conservative. I am one of them. You are not alone.

To answer your question, my portfolio is 90+% in CDs, munis, and equivalent. I also bought some deferred annuities. I hate risk. The only risk I am willing to take is the risk of just keeping up with inflation.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 02-07-2014, 12:41 AM   #15
gone traveling
 
Join Date: Nov 2013
Location: Los Angeles
Posts: 202
This is your answer. Buy ETF's instead of individual bonds and stocks.

Personally I'd favor a little bit of XLP rather than so much bond exposure. Notice how XLP recovered quickly from the 2008 - 2009 collapse.
__________________
ETFs_Rule is offline   Reply With Quote
Old 02-07-2014, 06:01 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,967
Quote:
Originally Posted by obgyn65 View Post
Ok here we go... To the OP : a minority of the participants to this website are very conservative. I am one of them. You are not alone.

To answer your question, my portfolio is 90+% in CDs, munis, and equivalent. I also bought some deferred annuities. I hate risk. The only risk I am willing to take is the risk of just keeping up with inflation.
This is possible as long as the OP also understands he/she will need a nest egg that's 40-60% larger (or spends commensurately less) than someone with a even a modest equity:fixed income asset allocation. Sounds like it might be an option for the OP, but you don't get something for nothing when it comes to returns (and risk) or we'd all be in CD's and bonds.

Not everyone wants to (or can) work 40-60% longer or save 40-60% more during the accumulation years or spend that much less in retirement.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 02-07-2014, 06:48 AM   #17
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
But wouldn't buying deferred annuities in your 40s (starting paying at age 62 for example) and buying SPIAs after age 75 (where mortality credits are highest) have a better outcome than a modest:fixed income AA?

This assumes we factor out heirs, married or single, etc.

Quote:
Originally Posted by Midpack View Post
This is possible as long as the OP also understands he/she will need a nest egg that's 40-60% larger (or spends commensurately less) than someone with a even a modest equity:fixed income asset allocation. Sounds like it might be an option for the OP, but you don't get something for nothing when it comes to returns (and risk) or we'd all be in CD's and bonds.

Not everyone wants to (or can) work 40-60% longer or save 40-60% more during the accumulation years or spend that much less in retirement.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 02-07-2014, 06:59 AM   #18
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,801
Quote:
Originally Posted by obgyn65 View Post
Ok here we go... To the OP : a minority of the participants to this website are very conservative. I am one of them. You are not alone.

To answer your question, my portfolio is 90+% in CDs, munis, and equivalent. I also bought some deferred annuities. I hate risk. The only risk I am willing to take is the risk of just keeping up with inflation.
Dolphin Boy-

You're lucky to get this advice so easily. Normally, Obgyn has folks lie down and put their feet up in the stirrups. But, oh wait..."Dolphin" Boy; perhaps he couldn't find your legs?
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Old 02-07-2014, 07:02 AM   #19
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,801
On a more serious note...Dirk Cotton is posting a great blog series on various retirement investing strategies. It does a good job of discussing pros and cons and should help you decide what's best for you.


The Retirement Cafe: Unraveling Retirement Strategies: Floor-and-Upside
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Old 02-07-2014, 07:10 AM   #20
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 1,645
I agree with OBGYN especially this year. I am pretty much the same as him for allocation. You just missed some good PENFED CDS at 3%. (New Money) I will be renewing 2 this month at that rate for OLD Money. I feel the downside risk if interest rates jump (Unlikely) is worth it.

I have been searching and searching for projected interest rate forecasts for the next 5 years and they seem to be rare as I need to make a decision by Feb 20th.

If anyone has any please post a link.

Thanks
__________________

__________________
"Arguing with an Engineer is like rolling in the mud with a pig. Just remember that the pig likes it."
ShokWaveRider is online now   Reply With Quote
Reply

Tags
risk averse


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
mid-40s, risk averse, low-ish income, way behind you guys shorn Hi, I am... 29 03-21-2013 09:53 AM
Risk Averse Boomers mickeyd FIRE and Money 2 07-03-2011 06:51 AM
So what is a risk averse investor to do? brewer12345 FIRE and Money 87 04-03-2011 02:02 AM
suggestions for my risk-averse mom kevink FIRE and Money 29 08-09-2007 08:17 PM
Risk? What risk? REWahoo FIRE and Money 3 08-16-2006 09:39 AM

 

 
All times are GMT -6. The time now is 12:16 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.