Ed B
Recycles dryer sheets
First, yes, this is a sequence of returns risk and maybe a market timing question as well. But second, while I may not start taking SS at 62, with retiring at 58 next year I will need to suppliment my retirement income from 401k funds until I start SS with 62 being the first milestone.
My 401k balance is small compared to the majority here but it is enough to suppliment our pension and the SS my wife and I will receive. Honestly, once we start SS what we have left in the nestegg will just provide fun money and cola.
One obvious option is to set aside 4 years of income that will match SS at 62, then evaluate at 62 whether to postpone SS further or go ahead and start it.
But I could also set aside 2 years cash or CDs and leave an addition 2+ years or a much higher % of my portfolio invested in a low volatile Wellesley type fund. I could also roll the dice a little by holding out 2 years to start and leaving the rest invested more aggresively to benefit if markets keep performing well and take out one year's $$$ at year 3 if markets are down or two or more if markets are significantly up.
What I hope is that with two to four years in cash to fund that 1st gap to age 62, my remaining investments do well enough that I can draw out more each year from 62 until 65 or 67 without draining it. But I fully expect a pull-back sometime over the next 4 to 5 years.
My 401k balance is small compared to the majority here but it is enough to suppliment our pension and the SS my wife and I will receive. Honestly, once we start SS what we have left in the nestegg will just provide fun money and cola.
One obvious option is to set aside 4 years of income that will match SS at 62, then evaluate at 62 whether to postpone SS further or go ahead and start it.
But I could also set aside 2 years cash or CDs and leave an addition 2+ years or a much higher % of my portfolio invested in a low volatile Wellesley type fund. I could also roll the dice a little by holding out 2 years to start and leaving the rest invested more aggresively to benefit if markets keep performing well and take out one year's $$$ at year 3 if markets are down or two or more if markets are significantly up.
What I hope is that with two to four years in cash to fund that 1st gap to age 62, my remaining investments do well enough that I can draw out more each year from 62 until 65 or 67 without draining it. But I fully expect a pull-back sometime over the next 4 to 5 years.