Would Appreciate Your Thoughts!

[ThinkAhead]

Hi! This is my first time posting. I am 60 years old and retirement for me will likely be in the next year or two, simply because I'm not ready. I've worked my whole life and I can't imagine NOT making money and NOT saving it. And, I like my job. It's creative, really flexible and close to home. And, I'm finally making what I'm worth. With that said, day by day, I'm feeling more ready and with a new President in my company, retirement may come sooner than I think.

I am married to a guy who makes good money, but works really hard for it. We got married late in life (age 40). We keep our money separate, but also have a joint savings and checking account. We have no debt. I am worth 1.3 million and he is worth double that amount. Here's the thing - my money has been in CD's and savings accounts for the past 10 years (at his suggestion because he saw how upset I got when I lost money during the last stock market downturn) and obviously, I've made NO RETURN on my savings all these years. He was investing his savings and was doing well, but then lost $300,000 in day trade about five years ago. It hurt. Because of that and his feeling that I should NOT invest my money in the stock market, I missed all of the gains over the last 10 years.

It has bothered me - A LOT - that my money just sat there making nothing all of these years. But, I was too frightened to make a move and because everything we both knew about the market said it should NOT be going up like it was.

So, here I sit. And the question is, is it too late and/or too risky to invest at this point in time? Should I just be happy with what I have saved? Would love your thoughts!

 

[street]

I not an expert but my opinion is it isn't too late to invest in the markets such as mutual funds etc.

Start out with a small amount and invest by dollar cost method or invest when there are some down times or add when you want too. Buy and hold and time is on your side. I don't believe it is ever to late to start or add to existing market accounts.
I also don't feel you did anything wrong in how you handled your money. Not everyone wants or does stock marketing.

 

[Chuckanut]

No, it is not too late if you don't panic and act out of fear and ignorance. Or worse yet, turn your money over to a [-]financial advisor[/-] sales person. You can do much worse than keep you money in CDs for another six months while you study and learn how to invest.

Start by doing some research. Look into the the site HumbleDollar.com and read the articles. I hope they will give you a sense of balance.
https://humbledollar.com/money-guide/main-menu/

Check out Bogleheads advice on lazy portfolios.
https://www.bogleheads.org/wiki/Lazy_portfolios

First invest your time in sites like the above. Then invest your money.

Above all avoid Shark Attacks by doing it yourself. It's not rocket science and it's not that hard. But, you do have to accept the down markets along with the up markets.

If you must do something, open a Treasury Direct account and purchase your limit of iBonds which currently pay an interest rate of over 7%. They are guaranteed but the full faith and credit of the US Government. That will change with the inflation rate. You must be willing to accept change, good and bad, to be a successful investor.

Oh, don't go near crypto currencies.

 

[pacergal]

Agree with what has been said.
This forum is a great place to learn, along with Bogleheads and there are wonderful books out there also.
The thing I would be cautious of is going all in before you have really gotten comfortable with your risk tolerance.
A portfolio between 30/70 to 60/40 would be my choice at age 60.

 

[Time2]

I'm 66 yrs old and have 65% to 70% in the stock market. I say get in, you still have 25 years for that money to grow.

 

[OldShooter]

... the question is, is it too late and/or too risky to invest at this point in time? ...

No.

... he saw how upset I got when I lost money during the last stock market downturn ...

Which downturn was that? Every downturn I am aware of has been followed by a recovery. That is the important thing to remember. Another thing to remember is that volatility is not risk, although at some point you should make it a point to understand Sequence of Returns Risk (SORR), which is related to volatility.

Start here:

"If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free 16 page download)

"The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)

"The Bogleheads Guide to Investing" by Taylor Larimore et al https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365

 

[Out-to-Lunch]

Welcome to E-R.org!

I agree with the others: it is not too late. Read some of the sources cited above.

 

[mrfeh]

So, here I sit. And the question is, is it too late and/or too risky to invest at this point in time? Should I just be happy with what I have saved? Would love your thoughts!

It's never too late.

You need to educate yourself. Start here: https://www.bogleheads.org/wiki/Bogleheads®_investing_start-up_kit

 

[TheWizard]

Primary thing to get over is your fear of "losing money" in the stock market. We're talking the broad stick market here: index funds, not individual stocks.

VTSAX/VTI or VFIAX/VOO are good funds to start with.
When stock indexes decline a bit, as they did early last week, you need to see that as a Buying Opportunity and move another $10k into VOO, for example.

If you can't change your mindset on dealing with stock index fluctuations, then you may not have the temperament for investing properly, sorry...

 

[racy]

.... I am 60 years old ....We have no debt. I am worth 1.3 million and he is worth double that amount. ...

So, you have $3.9 million and no debt. If that amount is investable assets, then that's pretty good IMHO. Both of you worked so there's Social Security income in the near future. Depending on your expenses and whether or not you want to leave money to heirs, it seems to me you may not need to take on very much stock market risk.

Here's a link to an investor quiz from Vanguard that claims to "find a path that best fits your needs": https://tinyurl.com/y7fbo9d7'

 

[CincyDave]

Never too late to get in the market in my opinion. Some things to think about. How much of your income needs will be covered by things like pension and SS? If a lot, you could be more aggressive in your AA. Also do you have heirs you would like to leave money to? If so, again, it could affect how much you put in market. Will you panic in a downturn and sell low?

 

[pb4uski]

It not too late but it might be a bad time to invest in stocks. Stocks are currently overvalued by historical measures and some believe are a bubble that will either pop or slowly lose air.

 

[VanWinkle]

It's always a bad time to invest in stocks, they are either over valued or going down and making people nervous. The real trick is to ignore the reports that say invest big or it's a bubble. Make a reasonable plan to invest 1% per month of your funds in broad US or Foreign equity funds until you reach 30% into equities. Pause until the market has a hiccup and see if you are able to not sell during the downturn. If you get too nervous, reduce equities to 25% or until you reach the right amount for you.

Best to you,

VW

 

[USGrant1962]

Welcome to the Forum!

For very conservative, older folks I've recommended Vanguard Retirement Income fund. I have actually put relatives' inherited IRAs in there. It is ~30% equities, which is the minimum you want if you are funding a 30+ year retirement from the portfolio. If you don't need the cash flow (it yields ~2.4%) it is best to be in IRAs.

https://investor.vanguard.com/mutual-funds/profile/overview/vtinx

I wouldn't recommend moving as slowly as VanWinkle suggests. Because this is a balanced fund bigger purchases should be fine. Say 20% of your portfolio per quarter.

 

[Which Roger]

You're worth a combined 4 million, which for most couples is "more than enough". Not knowing your expenses, let's assume that's true for you. Then you should be happy with where you are. Everybody wants to be in such a situation, and it doesn't really matter how you got there. Also, having more than enough changes the risk equation, because losing money that you don't really need won't hurt you much, nor will gains help you much.

 

[Montecfo]

Welcome to the forum ThinkAhead!

You really have little choice but to invest in the stock market. Retirement is long and stocks are the vehicle which will allow you to make returns sufficient to fund a long retiremebt. I would suggest a site such as morningstar, which has lots of free content, as a way to get started.

A good baby steps investment for a new but conservative investor would be either of two mutual funds, Vanguard Wellington or Vanguard Wellsley. Both are funds that are balanced between stocks and bonds and you could actually make either your sole investment vehicle for your nestegg.

Research them at Vanguard or at Morningstar. Or both.

And even though some folks deem stocks to be expensive (as they have for years), you can begin soon after educating yourself. Just begin slowly and maybe become fully invested (whatever that means for you) over say 12 -18 months.

Good luck and good investing.

 

[kgtest]

It not too late but it might be a bad time to invest in stocks. Stocks are currently overvalued by historical measures and some believe are a bubble that will either pop or slowly lose air.

Like the .com Y2k bubble burst? Or bigger? Or not as big? Man that crystal ball would be handy right now.

Its absolutely slowly been losing air.

 

[kgtest]

Invest in the market. Even 60 to 70% of your 1.3MM. If you have 1 to 2 years before retirement, you will have 1 to 2 years for gains as well.

You will get SS at some point...and so will your partner. It sounds like between you and your partner you have about $3.6MM, and do you own your home or are you renting? That would be even more to consider.

Invest 2.8 to 3MM and keep the 600k for a bet against inflation and a downturn. Not sure what your annual COL is but you can use FIRECAL to run some numbers and see where you stand with your current state, and then change the variables to if you were to invest today into the markets. The calculator is a bit scary and overwhelming at first, but it also trains you to know where you stand, has good instructions, and the forum can always help point you in the right direction with your data inputs.

www.i-orp.com is another helpful tool to know where your current state of affairs are.

With 60 to 70% invested, when it comes time to withdraw and spend your retirement savings, if the market is up, you can spend your investments (Sell high), if the market is down from its market highs, spend the cash and wait to spend investments.

 

[pb4uski]

It's always a bad time to invest in stocks, they are either over valued or going down and making people nervous. The real trick is to ignore the reports that say invest big or it's a bubble. Make a reasonable plan to invest 1% per month of your funds in broad US or Foreign equity funds until you reach 30% into equities. Pause until the market has a hiccup and see if you are able to not sell during the downturn. If you get too nervous, reduce equities to 25% or until you reach the right amount for you.

Best to you,

VW

If the OP desires to make direct investments in stocks then I like the idea of getting in over time given current valuations. The OP could value average in over a few years... invest $15k initially... a month later add whatever is needed to being the total value to $30k... a month later add whatever is needed to being the total value to $45k. So in a declining market you are buying more each month and in a rising market you are buying less each month. Rinse and repeat until the OP is at whatever equities % target that they have set.

Another approach would be to just buy long-dated LEAP call options which offer market participation with risk limits.

 

[OldShooter]

... in a declining market you are buying more each month ...

This is part of a chart I use in my Adult-Ed investing class:

Statistically speaking the OP would likely be better off just jumping in the pool, but various flavors of dollar cost averaging do reduce the risk of feeling like one has made a big mistake if the market drops. It is sometimes hard to remember that it has always come back ...
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[l8_apex]

OP, if you've got another 30 or 40 years to go in your life, why would it be "too late" to start investing?

 

[ThinkAhead]

Thanks and Update

I am sorry it took so long to reply ... but, THANKS SO MUCH so much to each of you for your comments and suggestions! You have given me quite a lot to think about and I love the links, book suggestions, etc. I agree that I must overcome my risk aversion before I do anything, so I will read everything I can and start small.

To those that asked, we do not have any children to leave our money to, although we'd like to leave a "gift" to our nieces and nephews (in total perhaps $500,000). We currently spend about $60,000-70,000 a year, but once I retire, that will go up around $20,000 to pay for health insurance and of course I'll likely spend more because I have more time, so our expenses might be around $90,000-$95,000 per year (once we both retire), but that's on the high side as we will definitely downsize from the house we have now.

I will get a tiny pension of $300 per month plus a social security check and my husband will continue to work until he sells his business which is at least 5 more years - I am not sure what his business will be worth when he finally retires, but I'm guessing around $200,000.

 

[Accidental Retiree]

To those that asked, we do not have any children to leave our money to, although we'd like to leave a "gift" to our nieces and nephews (in total perhaps $500,000). We currently spend about $60,000-70,000 a year, but once I retire, that will go up around $20,000 to pay for health insurance and of course I'll likely spend more because I have more time, so our expenses might be around $90,000-$95,000 per year (once we both retire), but that's on the high side as we will definitely downsize from the house we have now.

.

How much will both your Social Security checks and your $300 pension total? You probably have your current spending covered with those 3 income streams alone.

 

[pb4uski]

....but once I retire, that will go up around $20,000 to pay for health insurance....

What does your husband do for health insurance? If he has some sort of employer plan, can you get on that?

If not, check out healthsherpa.com if you haven't already... you may find that health insurance isn't as expensive as you think, especially if you are healthy so you can buy a bronze plan that will likely be $500-850/month... so $6,000-$10,200/year in premiums.

Add in a few thousand for deductible and co-pays in a typical year if you are healthy and you're probably in the $9-13k range.

 

[yakers]

Are you in a community property state? Nothing wrong with having separate/joint accounts for various saving/spending purposes but you are going to sink or swimm together (looks like you are swimming nicely!) IMHO it would be good to develop an asset allocation (AA) that holds both portfolios, it would not matter as much if your assets were the bond/cash portion. In my early investing days I wanted to have DWs account hold the bonds and I would hold more stocks but she was not happy, why was the fund I was holding not good enough for her(!)? So I put the same fund (VBIAX, VG 60/40 fund) in both accounts, happy wife.... And the fund has worked out well over the years, nothing to mess with. NOW she trusts me to manage all the financial issues.