So I know all about historical returns of the stock market over prolonged periods of time but also very familiar with turbulent times like we are experiencing now.
So question is there ever a point where it is ok to not try to maximize your nest egg but rather protect and preserve if you've met your financial goals?
So my scenario
- 56 years old
- $6M investable cash (40% IRA 60% non IRA)
- $100K a year living expenses
- Still fully employed (plan for next 4-5 years)
So if I can buy a 5 year US Treasury for 3.5% yield that would give me $210K interest which is well above annual living cost. But since I plan on working next 4-5 years that will just get added to nest egg for now.
So is there value in assuming stock market risk? I know that if you do invest in the market in balanced approach my nest egg will grow more but do I need more? Do I need to expose myself to that volatility?
I view the goal is not to die with as much money as possible but rather reach a point where you've been guaranteed to win the game.
Thoughts? I know a controversial approach.
For example, if you are 56 and have $6M investable assets (IRA and non IRA) and my living expenses are $100K per year and I can invest in US Treasury that gets me 3.5% = $210K per year. Is there a need to expose yourself to stock market risk? The $210K allows for inflation erosion and then SS kicks in down the road as well.
So question is there ever a point where it is ok to not try to maximize your nest egg but rather protect and preserve if you've met your financial goals?
So my scenario
- 56 years old
- $6M investable cash (40% IRA 60% non IRA)
- $100K a year living expenses
- Still fully employed (plan for next 4-5 years)
So if I can buy a 5 year US Treasury for 3.5% yield that would give me $210K interest which is well above annual living cost. But since I plan on working next 4-5 years that will just get added to nest egg for now.
So is there value in assuming stock market risk? I know that if you do invest in the market in balanced approach my nest egg will grow more but do I need more? Do I need to expose myself to that volatility?
I view the goal is not to die with as much money as possible but rather reach a point where you've been guaranteed to win the game.
Thoughts? I know a controversial approach.
For example, if you are 56 and have $6M investable assets (IRA and non IRA) and my living expenses are $100K per year and I can invest in US Treasury that gets me 3.5% = $210K per year. Is there a need to expose yourself to stock market risk? The $210K allows for inflation erosion and then SS kicks in down the road as well.