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Where to put 2013 gains?
Old 10-30-2013, 06:02 PM   #1
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Where to put 2013 gains?

Since the market has done so well this year with my retirement savings (457 and ROTH IRA) it would be nice to stash away/reinvest some of the gains rather than simply letting it ride. But where?

I'm living off social security and an annuity and have yet to withdraw any of the savings. The amount invested at the start of 2013 was enough for me to comfortably withdraw 4% a year until death but I haven't needed it so I've left it alone.

The portfolio has grown $120,000 this year but it's just paper gains as no additional shares were purchased (since I'm not working). So when the market turns downward this "profit" will be gone.

What do you think? Should I just leave it alone or take some out and do something else with it? The investments are diversified in several TIAA-CREF funds.

Any advice is appreciated. Thanks.
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Old 10-30-2013, 06:17 PM   #2
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Quote:
Originally Posted by coolowl View Post
Since the market has done so well this year with my retirement savings (457 and ROTH IRA) it would be nice to stash away/reinvest some of the gains rather than simply letting it ride. But where?

I'm living off social security and an annuity and have yet to withdraw any of the savings. The amount invested at the start of 2013 was enough for me to comfortably withdraw 4% a year until death but I haven't needed it so I've left it alone.

The portfolio has grown $120,000 this year but it's just paper gains as no additional shares were purchased (since I'm not working). So when the market turns downward this "profit" will be gone.

What do you think? Should I just leave it alone or take some out and do something else with it? The investments are diversified in several TIAA-CREF funds.

Any advice is appreciated. Thanks.
Well, since you are retired as am I, have you got everything checked off your bucket list of Life Yet? If not, time is running out, if you know what I mean. That is why I took the African Safari this past year.

One thing I learned from the VPW Calculator, is that if you don't spend and enjoy your gains as they come to you, they stay invested and you lose them in market downturns. I would rather spend them on Life's Bucket list items, than to see them 'disappear' when the Market goes south.

You're retired now and you have enough money. So you have to ask yourself what's your goal?
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Old 10-30-2013, 06:40 PM   #3
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Have you rebalanced with the large gains? For us, we try to keep to roughly 55% equities. I rebalance when I get more than 5% off. So several times this year when equities got to 60% I sold some of the equities and put them into my fixed allocation.

Another thing that I did. We had a very low interest car loan. We had taken it out because I didn't want to pay the taxes on withdrawing money from the IRA to pay cash for the car. Paying interest at a low rate was way better financially then paying cash and paying taxes on the withdrawal. However, subsequent to the loan we sold some property and had some money that we could invest in our taxable account. It went up substantially as it is all equities. When it was at a very high point we sold some of that taxable account and used the money to pay off the car loan.
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Old 10-30-2013, 07:27 PM   #4
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Originally Posted by Cut-Throat View Post
Well, since you are retired as am I, have you got everything checked off your bucket list of Life Yet? If not, time is running out, if you know what I mean. That is why I took the African Safari this past year.
+1. If you're already collecting SS, it's almost guaranteed that you've already lived 2/3 of your life -and probably a larger percentage than that. Even larger of your "able bodied" years.

Go spent the next year using the most mobility you'll likely ever have left doing something with those gains that you won't be able to enjoy when you're 82.
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Old 10-30-2013, 09:00 PM   #5
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Quote:
Originally Posted by coolowl View Post
Since the market has done so well this year with my retirement savings (457 and ROTH IRA) it would be nice to stash away/reinvest some of the gains rather than simply letting it ride. But where?

I'm living off social security and an annuity and have yet to withdraw any of the savings. The amount invested at the start of 2013 was enough for me to comfortably withdraw 4% a year until death but I haven't needed it so I've left it alone.

The portfolio has grown $120,000 this year but it's just paper gains as no additional shares were purchased (since I'm not working). So when the market turns downward this "profit" will be gone.

What do you think? Should I just leave it alone or take some out and do something else with it? The investments are diversified in several TIAA-CREF funds.

Any advice is appreciated. Thanks.
I'd probably put some in a cash bucket in anticipation of a downturn and take a trip (like some suggest) or do something on the bucket list, as a reward.
I'm about to go past my max stock allocation percentage, so am wondering when to pull the trigger--probably in early December if the market keeps going up. Might sell some stock in the MAD account (Nokia has a 10% down limit order, so that might take care of itself).
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Old 10-30-2013, 09:49 PM   #6
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I wouldn't take anything out that you haven't planned on taking, though it sounds like this is semi-planned. Given your flexibility to withdraw or not, I would be tempted to just let it ride. If things turn down, don't withdraw. If things are good (now certainly qualifies) withdraw per the plan if you want, when you need it. I wouldn't have more than what you'll spend from the portfolio in the next year sitting in cash.
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Old 10-30-2013, 10:18 PM   #7
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The only responsible thing to do is to rebalance. These good times need to be used to prepare for bad times.

As for taking things out, you should already have a plan for a sustained withdrawal rate. And a plan for rebalancing, too. In other words, you should never have to ask the question in the OP.
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Old 10-30-2013, 10:22 PM   #8
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Originally Posted by Cut-Throat View Post
Well, since you are retired as am I, have you got everything checked off your bucket list of Life Yet? If not, time is running out, if you know what I mean. That is why I took the African Safari this past year.

One thing I learned from the VPW Calculator, is that if you don't spend and enjoy your gains as they come to you, they stay invested and you lose them in market downturns. I would rather spend them on Life's Bucket list items, than to see them 'disappear' when the Market goes south.

You're retired now and you have enough money. So you have to ask yourself what's your goal?
I would agree with your comments. DW/me are 65 and I guess you can say we "blew" most of our gains this year on a trip to China, upgrading the kitchen, and installing a whole-house automatic backup generator.

Once you have reached your retirement financial target and have actually retired (as we both are), it's time to enjoy what you may have given up over many years to reach this time of life where you don't have to worry to reach a financial goal - you're already there (if you're lucky).

There is a time to sow, and a time to reap (or so the Bible and a song says )...
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Old 11-01-2013, 10:19 AM   #9
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I am reading a book right now , well I started it anyway, it been sitting aside for a couple months. The author, of this book, would advise you as to "why are you still playing the game if you have already won". With that, you might think about making your investments more conservative....maybe stick it all in psst vwinx
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Old 11-01-2013, 12:07 PM   #10
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If you have access to TIAA-Traditional in your TIAA-CREF account you might stash your gains in there. You'd probably get an interest rate close to 4.5% in return for giving up easy access to the funds......but it sounds as if you don't really need that. You could then use the account as longevity insurance and turn it into a fixed annuity in the future or use the 10 year transfer payout option if you need the money.
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