Originally Posted by samclem
It can certainly work, and many people have done it over the years. But, as you probably know, you're still taking a big risk. Stocks (price appreciation and dividends) have historically outperformed every other common investment in the US over long periods of time. By leaving them out of your portfolio, you're betting against this historical record and significantly increasing the likelihood (if the future resembles the past) that you'll have to work more years and/or save more every year to get to retirement. Less likely to ER, will probably just R or maybe LR.
And, if inflation takes off, it could get ugly unless you've got a lot of TIPS. If TIPS continue to keep their promise over the years.
That's my plan...accumulate TIPS (I'm about 1/3 cash, that's enough as a %.) But I'm also leaving my stocks in there (in balanced funds VWINX and VGSTX - stocks currently account for about 1/4 of what I laughably call my portfolio.) I'm just talking about new
money; if stocks revert to their mean performance, I'll be okay I suppose. However, I have no faith
in stocks whatsoever, given the huge structural changes being wrought willy-nilly on our whole capitalist model/tax structure by the government. They're changing the rules in the middle of the game. That's just not cricket.
If I admit that I'm likely to "LR" rather than "ER", will I get kicked off the Forum?
My retirement formula: when the amount of money I have, divided by a years' living expenses equals the number of years I likely have left, I can retire.