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Old 02-11-2020, 09:41 AM   #41
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50/50. If the market drops I will invest more in a total stock market ETF. I sold off a chunk of individual stocks last year but just couldn't pull the trigger to reinvest in the stock market. I do regret it, but a 50/50 mix is very OK for now.
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Old 02-11-2020, 10:02 AM   #42
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I see you have taken that magical youth elixir again.
Yep!! In reality I'm a white haired old lady. My avatar photo was taken when I was a teenager, back in Hawaii.
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Old 02-11-2020, 10:11 AM   #43
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Not counting personal homes we are at 26% of our net worth in bank accounts and CDs - expecting that to go to about 37% this month when a large loan pays off. Unnecessary and probably not optimal, but I have 60 day buy orders in with VG (oops - didn't count the cash in VG waiting to pay for orders) at 5, 10, and 20% below the trailing 52 week high for VTI. If a crash happens maybe I get orders filled in x, 2x, 4x amounts.
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Old 02-11-2020, 10:20 AM   #44
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Yep!! In reality I'm a white haired old lady. My avatar photo was taken when I was a teenager, back in Hawaii.
We know in spirit you still are that same young girl ...
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Old 02-11-2020, 10:29 AM   #45
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currently 20% = 18 yrs. potentially needed stash in cash @1.6%, no downturn concerns and by then we will be in our mid 80's
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Old 02-11-2020, 10:51 AM   #46
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25% stocks
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Old 02-11-2020, 12:59 PM   #47
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If you are retired and 3 years spending is 25% of your total stash that equals an 8 percent plus withdrawal rate!?

Did I misunderstand the metrics of your post?


I couldnít get past this either.

I have > 10 yrs in CDs and no bonds. I was embarrassed to be so conservative but thanks to this thread I see Iím not alone. Iíd That safe money is 40%. Iíd like it to be 30% but itís hard to rebalance CDs (didnít think about that when I elected to use CDs in lieu of bonds for bucket #2. DW still works.
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Old 02-11-2020, 01:35 PM   #48
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2 yrs worth of expenses in cash, the rest in equities.
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Old 02-11-2020, 02:06 PM   #49
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Danged cute.
Thought it was Dawn Wells from Gilligan's Island!
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Yep!! In reality I'm a white haired old lady. My avatar photo was taken when I was a teenager, back in Hawaii.
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Old 02-11-2020, 06:12 PM   #50
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Stocks 34%, Bonds 60%, Cash 6%.

As my dividends build up I plan on increasing my stock exposure.
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Old 02-11-2020, 07:23 PM   #51
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... I keep about 25% or 3 years worth of retirement income in safe funds because I figure that's what I would need to ride out a market downturn. I then have another 20% in a 2025 target date fund which, as you know is diversified. The rest (55%) I keep in an SP500 index fund.

FYI....I have a considerable amount of my wealth is in my home (paid for and worth about $800K). In a horrible situation (a LONG market downturn) I could access the equity on my home if I absolutely had to.

We are a year or two from retirement. It looks like Social Security alone could pay all or most of our bills. Interest from stocks and bonds would cover the rest. We could ride out just about anything, so I haven't looked at it from that angle. In any case we have about 45% in cash/savings, CD's and bonds.
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Old 02-11-2020, 10:26 PM   #52
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Yep!! In reality I'm a white haired old lady. My avatar photo was taken when I was a teenager, back in Hawaii.
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Danged cute.
Thought it was Dawn Wells from Gilligan's Island!
+1 The photo must have been taking while you were taking a much needed rest from having boys chase you.
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Old 02-12-2020, 12:20 AM   #53
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Originally Posted by BeachOrCity View Post
If you are retired and 3 years spending is 25% of your total stash that equals an 8 percent plus withdrawal rate!?

Did I misunderstand the metrics of your post?
You assume OP is retired because they are asking a question of retirees. I think it is more likely that OP is a few years away from retirement.

The actual percentage in my case is probably less interesting than how I arrived at my answer.

What I do is track my spending in Quicken which tells me how much it costs me to live. Call this $X.

I then use life expectancy information and my current age to decide how much longer I think I will live (I just use 50th percentile numbers here). Currently I am 50 and use 40 years.

I think the future will be somewhat better than the past, so I assume a 95% historically safe SWR.

I plug my statistics and 40 years into FIREcalc and then use the investigate tab to adjust the spending level to 95% historically safe levels. This is much higher than $X, by the way.

I then look at the asset allocation sensitivity at that level of spending. I pick the AA with the highest historically safe success rate. If there are ties, I'll pick the highest stock allocation among those ties. This is because I have a fairly high risk tolerance and I am an optimist and I have kids.

At this point I have answered the question, "If I took my current situation and ratcheted my spending up to the most that I would feel safe doing, what should I then set my AA to in order to be most safe, from a historical perspective, over my remaining lifetime?"

For me currently, that answer is 10% bonds.

I then take my current spending and multiply it by 1/4.08% to see what portion of my portfolio is "mine". Anything above that amount will be my kids' money, so that is 100% stocks as I think they will inherit in 30 years or more, and again, I'm an optimist.

Of "my" portion of the portfolio, I multiply that by the bond ratio in the AA above (10%) to see what amount I should have in bonds.

Since I am currently spending 0.41% of my FIRE portfolio, this means my target is 0.41% * 10% / 4.08% = 1.01% in bonds. If my spending were to increase, as it might, I would consequently allocate more to bonds. As I age and my plan duration years lessen, the historically safe AA to bonds would increase somewhat, so that would also have me put more in bonds.

Currently I'm actually at 6.53% bonds. I also have a few months expenses in checking/saving.

When the stock market next goes south, as it inevitably will, my plan is to rebalance occasionally, withdraw as needed, and plan on history being no worse than the past (probably better - I'm an optimist). I expect I will naturally become a little nervous and cut back some, like everyone else.

In 20 years I'll get Social Security. 60% of my Social Security will basically cover my current expenses. (I derate SS to 60% of my actual benefit.)

Single. Paid off house. Kids' college covered. No large expenses on the horizon. Theoretically willing to work a job if needed to keep the lights on. Have a number of contingency plans both on the income and expense side.
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Old 02-12-2020, 07:51 AM   #54
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49% safe funds in a combination of cash, CD ladder and individual bonds or bond funds. Next year that % will increase to 50% and stay there indefinitely.
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Old 02-12-2020, 01:37 PM   #55
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28% bonds, 9% money markets
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Old 02-12-2020, 08:23 PM   #56
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For retirees only?
Just wondering......Right now I keep about 25% or 3 years worth of retirement income in safe funds because I figure that's what I would need to ride out a market downturn. I then have another 20% in a 2025 target date fund which, as you know is diversified. The rest (55%) I keep in an SP500 index fund.

FYI....I have a considerable amount of my wealth is in my home (paid for and worth about $800K). In a horrible situation (a LONG market downturn) I could access the equity on my home if I absolutely had to.

What say you guys?
Run simulations through 1929-1939 and see how you do
1941
-17.86% 1940 -15.29% 1939 -5.45% 1938 25.21% 1937 -38.59% 1936 27.92% 1935 41.37% 1934 -5.94% 1933 46.59% 1932 -15.15% 1931 -47.07% 1930 -28.48% 1929 -11.91%
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Old 02-12-2020, 10:27 PM   #57
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Age 74 with good pension that will diminish significantly if I'm the first to go. (SBP = about 35% of current pension). Therefore AA is premised on having enough in safe fixed vehicles (bond funds, CDs, I-Bonds, cash) to provide 20 years of supplemental income for my wife regardless of what happens to equities. This works out to about 50/50. I'm a couple of percentage points off at the moment but very close.
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Old 02-12-2020, 10:58 PM   #58
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Taxable - maybe 4% in cash, 10% in short bond funds.

Military pension, megacorp pension, rentals income, taking dividends from taxable in cash now, SS to start at 70 in 4 years.

tIRA and rIRA when I have to.

I have spent my entire life trying to be smart about saving and investing - it is truly hard to stop saving and start spending. I'm working on it.
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Old 02-13-2020, 05:57 AM   #59
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I'm different too, 65% bonds and cash.
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Old 02-13-2020, 06:31 AM   #60
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Excluding debt free real estate: 25% cash; 25% bonds; 25% stock; 25% gold. Without factoring in interest, the 25% cash and 25% bonds covers about 12 years of spending.
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