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Old 04-03-2009, 07:30 AM   #21
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...I had originally intended on getting closer to a balance (50/50) approach on my asset allocation...
Some real data for you to ponder in regards to the balanced approach. I set my AA at 50/50 in summer 2007, right after I FIREd.
I owned all low cost mutual funds, some govt bonds, a healthy muni stake. If memory serves, I had 12% international stocks.
My 2008 loss, per Morningstar portfolio tool, was -24%.
YMMV
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Old 04-03-2009, 08:52 AM   #22
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I can't afford to take anything greater than a 10% percent hair cut during retirement.
You haven't given any info on your assets, pension, etc. In any allocation you can bet there will be a 10% "hair cut" during retirement durning an 30 - 40 year retirement if not a few.

But based upon your 10% comment, my guess is that your cash flow calculation is not correct. Your planning should provide enough cash equivalents to ride out a 10% decline and recovery.

If you do not have enough money to put into cash to ride out a 10% decline and recovery you may not have enough money to retire.

Did your run Firecalc?

More info might help.
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Old 04-03-2009, 09:50 AM   #23
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Originally Posted by freebird5825 View Post
Some real data for you to ponder in regards to the balanced approach. I set my AA at 50/50 in summer 2007, right after I FIREd.
I owned all low cost mutual funds, some govt bonds, a healthy muni stake. If memory serves, I had 12% international stocks.
My 2008 loss, per Morningstar portfolio tool, was -24%.
YMMV
Is that for year 2008, or from the October '07 high to 12/31/2008?

From the October high in my portfolio, I was down 27% at year end 2008, and 30% now. About 6% of that is my living expense withdrawals.

I am essentially 100% invested in stocks, but I believe I may not do that in the future.

These losses do not bother me too much emotionally, but if I really think about it I am likely taking more risk than I should, long term.

I believe that each of us needs to be sure we are not unduly influenced by others' opinions, whether they be public gurus, or ideas expressed by private parties on the internet. When push comes to shove, one needs his own convictions to be his beacon.

Ha
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Old 04-03-2009, 09:52 AM   #24
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Is that for year 2008, or from the October '07 high to 12/31/2008?

From the October high in my portfolio, I was down 27% at year end 2008, and 30% now. About 6% of that is my living expense withdrawals.

I am essentially 100% invested in stocks, but I believe I may not do that in the future.

These losses do not bother me too much emotionally, but if I really think about it I am likely taking more risk than I should, long term.

Ha
According to Morningstar, only the year 2008, Jan 1 - Dec 31.
I started 2009 with a 40/60 AA, and am DCAing into stocks only. I plan to eventually return to the 50/50 AA, or the market just may do that for me. Who knows? I redirect my annual DCA amount as needed and as conditions change. I feel like I can keep a better handle on my AA and minimize my tax-time paperwork in one fell swoop.
Not withdrawing on my portfolio at all, still in a reduced (compared to preFIRE) accumulation phase.
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Old 04-03-2009, 10:15 AM   #25
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out of curiosity, what would that number be, in cash?
Probably about a million; that's why I'll likely work 'til I'm in my seventies. (I'm 55 now.)

I really don't belong on this forum.


Edit: actually, now that I think* about it, I'll probably work up to the point where I have cash living expenses a.f.i. equal to the number of years I have left. (My dad lived 'til age 85, and I'm not in the best health.) I could still end up retiring at more-or-less the usual time, presuming civilisation (and Social Security) is still going then.


*What a concept!

p.s. Wellesley.
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Old 04-03-2009, 04:59 PM   #26
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If there were 6% CD's available I'd put a chunk there . I lost a lot last year but I'm slowly getting some back . I agree with the fact that if you do not have padding in your budget you are not ready to retire .
I think a lot of us had sufficient padding before the crash. So now, should we not be retired anymore? Ooops! there are no jobs!
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Old 04-03-2009, 05:01 PM   #27
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[quote=Lawrence of Suburbia;803209]Probably about a million; that's why I'll likely work 'til I'm in my seventies. (I'm 55 now.)

I really don't belong on this forum.




Lawrence, why don't you post your income and expenses (i.e. budget) and see if some of the eagle eye LBYMer's here can help you tweek it so you can retire earlier than you think.
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