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Retired with only 300K in ML/ split 60/40
Old 02-27-2020, 09:49 AM   #1
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Retired with only 300K in ML/ split 60/40

My urge is to stop and try to preserve the 300K at this point.
Can anyone advise?
We can't let it sit and continue to lose money -it's what we have to live on - there is no more money being put into this account.
Advice??
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Old 02-27-2020, 09:56 AM   #2
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Ride it out, thatís why you have 40% in bonds.
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Old 02-27-2020, 09:56 AM   #3
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Stay the course.... put on your seat belt, cinch it tight and hold on.

Seriously though, IMO while there is real risk that the corona virus will mute economic activity until it is under control, in the whole scheme of things it is temporary. Stocks will go down and then will ultimately recover. No need to hit the panic button.

If it helps, just stop looking.

Even if stocks go down 20% and bonds are stable your $300K would dip down to $264k (12%... 20% * 60%).. and then will eventually recover.
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Old 02-27-2020, 10:26 AM   #4
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Resist the urge to buy high and sell low.

Turnoff the news for a couple of weeks - and go do something outside. If you must get news, go online and read the newspapers.

This too shall pass
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Old 02-27-2020, 10:41 AM   #5
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Quote:
Originally Posted by rathgar View Post
...We can't let it sit and continue to lose money....
As long as it's sitting you're not losing money. You'll only lose money if you sell out now. You're the one that controls whether or not you lose money...not the ups & downs of the market.
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Old 02-27-2020, 11:10 AM   #6
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Well, it's quite possible that 60/40 was too aggressive for your risk tolerance and your investment objective.

If a 10% market correction has you jittery, then you have a problem with your AA.

Can't do much about that now.
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Old 02-27-2020, 11:10 AM   #7
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+1 to all of the above responses.
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Old 02-27-2020, 12:48 PM   #8
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What's an "ML"? Merrill-Lynch? Are you paying fees? Are you in high expense ratio funds? What are you in? 60/40 doesn't tell us if you are sufficiently diversified in each area.



Quote:
Originally Posted by RunningBum View Post
+1 to all of the above responses.
Yes.

Quote:
Originally Posted by njhowie View Post
Well, it's quite possible that 60/40 was too aggressive for your risk tolerance and your investment objective.

If a 10% market correction has you jittery, then you have a problem with your AA.

Can't do much about that now.
But going much below 60/40 might just create another problem - not enough growth to keep up with inflation.

-ERD50
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Old 02-27-2020, 01:10 PM   #9
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Ride it out. Locking in losses is the worst thing you can do.
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Old 02-27-2020, 01:29 PM   #10
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Since, from your other posts, you and your husband have some pensions/SS, etc., I'd strongly advise you stay put as others have said. You sell now and you lock in the losses. You wait.

Instead of selling to "preserve" the balance, look at the other side of things: Where can you temporarily reduce expenses (many of us might end up taking travel down a lot this year, defer non-essentials, etc). Or look for a part time job if there's really an income gap.
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Old 02-27-2020, 01:35 PM   #11
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Someone once posted that like there are only a handful of trading days throughout the year that provide a majority of that years yield. IF you are out of the market and miss those gains on those 1 or 2 days...you've effectively lost the opportunity. Don't oversteer, stay the course. Don't knee-jerk and steer the opposite direction or you'll flip the car!
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Old 02-27-2020, 01:39 PM   #12
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Originally Posted by Aerides View Post
Since, from your other posts, you and your husband have some pensions/SS, etc., I'd strongly advise you stay put as others have said. You sell now and you lock in the losses. You wait.

Instead of selling to "preserve" the balance, look at the other side of things: Where can you temporarily reduce expenses (many of us might end up taking travel down a lot this year, defer non-essentials, etc). Or look for a part time job if there's really an income gap.
+1

My sense from OP's other posts is that she is 56 and contemplating retirement. Her husband is 65 and retired. I don't think she has retired yet, but I may have misread the prior posts. ML = Merrill Lynch from her prior posts.

If OP hasn't retired yet, it might provide OP with piece of mind plus economic security to stay in the w*rk force for another school year (through May/June 2021) or so to ride out the current storm while allowing their investments to (hopefully) recover.

Conversely, if OP already has retired, they could be a facing a SORR scenario.

I don't believe OP has posted a budget yet -- but again, I could have missed it.

*Edit: Well, from the title of her post above, I guess she did go ahead and retire between last fall and now. Maybe she could do some substitute teaching?
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Old 02-27-2020, 02:37 PM   #13
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You have been given good advice above. If you sell now, you will lock in your losses.

I was extremely nervous back 2008-2010, but I listened to the smart folks on this site and did nothing. It even got to the point that I told my DH not to open his 401K mail. It upset him too much. So glad that we did not do anything.

I am not sure, but we have quite a bit of money in his stable value fund and I have some in my TSP G fund, that I might move to the stock funds, if the market goes down enough. Who knows, I might be too afraid to do this, but I certainly won't sell.
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Old 02-27-2020, 06:41 PM   #14
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Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?
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Old 02-27-2020, 06:46 PM   #15
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Run. The vast majority of annuities are great for the seller and bad for the buyer. Everytime the market gets squirrelly the investment houses break out their annuity pitches to try to sell to the naive and fearful and collect a boatload of commissions from the annuity writers.

Below is from Vanguard post regarding the coronavirus:

https://vanguardblog.com/2020/02/24/...101:X:POS02:XX

Quote:
With this knowledge, we encourage investors, as we have for ages, to hold a diversified portfolio of assets, to remain disciplined by avoiding impulsive decisions based on fear and uncertainty, and to stay focused on their long-term goals and their plan for achieving them.
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Old 02-27-2020, 07:32 PM   #16
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Dump ML as soon as you can and move to Fidelity/Vanguard/Charles Schwab.

If they are suggesting that you move to annuities at this point in time when the markets took a dive - they are acting in their interest and not yours. Not only are you going to lock in your losses, you will now get locked into an annuity for which the sales guy will make a commision of 5%.

The markets dropped 10%, and the annuity will cost you 5% - your portfolio will take a permanent 15% hit.

RUN from ML.
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Old 02-27-2020, 07:34 PM   #17
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Quote:
Originally Posted by rathgar View Post
Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?
NO! I used to work in the IT department working with Products that were variable annuities meant to confuse the literal piss out of 95% of human beings.

They are not for you, they are for some old person who has literally never paid a bill in their lives and their husband/wife passes and they don't have any competence to learn the ropes of investing...and even then that same person would STILL be better off with a Managed Advisor service with Vanguard.

In fact, I now despise ML and think you should move your money from their to Vanguard because they made that pitch. I would.
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 02-27-2020, 07:38 PM   #18
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Quote:
Originally Posted by rathgar View Post
Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?
Lock in your losses and pay them commission while probably locking in on annuities while interest rates are this low? 3 strikes. Horrible advice.
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Old 02-27-2020, 07:51 PM   #19
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Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Holding on to your job (if you want to do it) might be a good idea - you will earning an income and not drawing down your assets - also might be a great time invest in the market now while stocks are on sale.
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Old 02-27-2020, 07:59 PM   #20
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OMY
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