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Old 08-21-2013, 07:02 AM   #21
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Since I don't "invest" per se, I usually follow only the macro economic stories.
Can you please explain this? Are you all in Cash?
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Old 08-21-2013, 09:50 AM   #22
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Originally Posted by ShokWaveRider View Post
Can you please explain this? Are you all in Cash?
Oops.. sorry... no not in cash... I should have said not an active investor. Other than a few old solid stocks, which I don't even look at, I count my assets in our camp, a place in Florida and our home in Illinois. The rest is in a small annuity, Ibonds, bought between 2001 and 2003... and in MM IRA's and CD's.
We just don't have an appetite for risk, so likely leave some on the table in return for one less thing to think about.
We're just about at the point of beginning to spend down our assets... It's part our original plan when we started retirement, back in 1989, and we're on schedule.

When it comes to money, I'm kinda like the guy in the TV ad, who steps aside in line to let someone in... and that person wins the $50,000 special customer award. Not "lucky", but we sleep well at night.
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Old 08-21-2013, 11:12 AM   #23
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I am in the same boat with imoldernu. He and I are about the same age (77?) and we don't take lightly the risk at hand to lose money on iffy investments. I heard years ago that you should only invest what you can afford to lose without going back to work. Investments don't include CD's or anything else that's backed by the government. If I had to make an investment, it would be in real estate, like personal rental property. Something I can manage and farm out the maintenance myself because I won't and can't do it anymore physically.

I only mention that type investment because we had a large CD mature in February '13 and an even larger IRA CD maturing March '14. Without owing taxes on the IRA CD, it will have to go back into some lower interest IRA CD. This we will do if we have to because we don't need the interest to live on. Why take a chance. We'll stay with the low interest until rates pick up.
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Old 08-21-2013, 12:14 PM   #24
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I am in the same boat with imoldernu. He and I are about the same age (77?) and we don't take lightly the risk at hand to lose money on iffy investments. ...
That's fine, but even at 77 you have to think about inflation.

I put a 20 year time frame (so to age 97) into FIRECalc, and it shows 35%-40% equities to be the 'sweet spot' for portfolio survival. That allows you to take 4.7% WR from the portfolio with 100% success. A zero% equities would fail ~ 20% of the time.

To get 100% historical safety with zero equities for 20 years, you need to drop the WR to 3.67%.

If that lower WR works for you, and zero equities helps you sleep at night, then you've got a plan. But you've swapped 'market risk' for 'inflation risk'. You haven't actually reduced portfolio survival risk with zero equities, you've increased it. But again, if that works for you, then you've got your plan.

-ERD50
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Old 08-21-2013, 05:12 PM   #25
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Is this thread going to focus on anything actionable? "Watching interest rates" sounds as exciting as watching for my tap to drip.

I could post what happened to my intermediate bond funds in the last rate rise of 2004 through 2006. It helped me to convince myself to do nothing, stick with it. But maybe it wouldn't be worth the bother to put up the analysis . Let me know if anyone is interested.
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Old 08-21-2013, 06:17 PM   #26
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10 year hit 2.9% today. And that's prior to any tapering.
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Old 08-21-2013, 06:39 PM   #27
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That's fine, but even at 77 you have to think about inflation.

I put a 20 year time frame (so to age 97) into FIRECalc, and it shows 35%-40% equities to be the 'sweet spot' for portfolio survival. That allows you to take 4.7% WR from the portfolio with 100% success. A zero% equities would fail ~ 20% of the time.

To get 100% historical safety with zero equities for 20 years, you need to drop the WR to 3.67%.

If that lower WR works for you, and zero equities helps you sleep at night, then you've got a plan. But you've swapped 'market risk' for 'inflation risk'. You haven't actually reduced portfolio survival risk with zero equities, you've increased it. But again, if that works for you, then you've got your plan.

-ERD50
I hear you ERD, but at this stage in my life I don't worry about things like inflation and withdrawal rates. I haven't taken any withdrawals in four years and don't plan to in the coming years. The only WD I take is from the IRA for my RMD. Then I just bought another CD with those funds and continued on. We have a decent pension through Prudential (was GM), we both get SS and we receive regular payments on a mortgage we are carrying on our last house. The mortgage has nine more years to run, by that time I'll be 86 and probably won't give a s**t about anything.

Still, I'm always interested in what people have to say about their investments and what they are into. I've come to know over the years that there are some really sharp people on this forum. Really, I am envious of all the people that are FIRE'd that were able to do it without pensions and still waiting on SS. Kudo's to you folks.
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Old 08-21-2013, 07:23 PM   #28
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I hear you ERD, ... I haven't taken any withdrawals in four years and don't plan to in the coming years. ....
Well, at a zero withdrawal rate, I don't even need FIRECalc to tell me how long your funds will last, or the optimal AA

Congrats, who knows, maybe I'll be there some day?

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Old 08-21-2013, 07:44 PM   #29
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But you know what? One never knows when an illness will hit and it will take you down the path to financial ruin. Even with insurance, a serious illness could take every thing you have. I thank my lucky stars every day and pray for good health for my wife and myself.
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Old 08-21-2013, 07:49 PM   #30
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But you know what? One never knows when an illness will hit and it will take you down the path to financial ruin. Even with insurance, a serious illness could take every thing you have. I thank my lucky stars every day and pray for good health for my wife and myself.
I'll give a big Amen to that prayer.
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