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Old 06-11-2017, 12:48 PM   #41
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I have looked at just about everywhere I can think of but I can't find this discussion. When (or should you)do you determine that it makes no sense to keep your money in stock and bonds, either funds or individually? If you have no heirs, everything will go to your younger spouse your assets have grown quite a bit in the 5 years since retirement and you never spend more than the yearly income form your assets. I could take all the money out of my investments, put them in 5 year CDs and maybe an annuity, start taking my SS at 66 or 67 and still not spend the principal. Has anyone ever just gotten rid of everything and done this? FYI, no debt, no expensive hobbies, living like we want doing whatever we want without really paying to much attention to the cost although we always look first.

There was a comment I heard years ago, why play the game if you don't have to? Is this what it means?

Thank you in advance for any comments, good or bad!
We use a matching strategy and invest mainly for capital preservation. I was influenced by reading up on Harry Browne and the permanent portfolio, Zvi Bodie and most of all a poster named Bobcat2 over at Bogleheads. Also the book Against the Gods: The Story of Risk and the idea of diminishing marginal returns. More on matching strategies here:

https://www.bogleheads.org/wiki/Matching_strategy


Pensions, SS and a little side income cover all our basic expenses in a high cost of living area, including a low fixed rate mortgage, which we plan to keep in retirement as long as we keep the house. We plan to take out a small amount from the portfolio for a few frills. If we needed more money we would work more part-time, rent out the current house, move to a lower cost of living city or suburb and/or downsize, not take on more investment risk.
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Old 06-11-2017, 01:09 PM   #42
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I cant remember who said it, maybe Benjamin Graham or warren buffet, maybe John Bogle, I read them all. If you have won the game keep 25 % in equities, then the other 75 you can do bonds. So if we ever rethink our AA we can go to 25 % stocks. I think we won the game. Im at 80/20 stocks. Some unknowns thats why im shooting the dice. What if my pension goes to zero, what if i get stiffed out of my social security, what if the market crashes, what if we have hyperinflation.
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Old 06-11-2017, 01:12 PM   #43
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I cant remember who said it, maybe Benjamin Graham or warren buffet, maybe John Bogle, I read them all. If you have won the game keep 25 % in equities, then the other 75 you can do bonds. So if we ever rethink our AA we can go to 25 % stocks. I think we won the game. Im at 80/20 stocks. Some unknowns thats why im shooting the dice. What if my pension goes to zero, what if i get stiffed out of my social security, what if the market crashes, what if we have hyperinflation.
I am really starting to think along these lines. Maybe 80/20 with the 80 consisting of bonds and cd's.
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Old 06-11-2017, 01:41 PM   #44
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There was a comment I heard years ago, why play the game if you don't have to?
If you're relatively young I'm not sure "you don't have to " is a safe strategy.
One word: Inflation. Over the next 30 years? Who knows.
If you're 80 years old that's one thing. Otherwise....risky IMO
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Old 06-11-2017, 01:43 PM   #45
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I am really starting to think along these lines. Maybe 80/20 with the 80 consisting of bonds and cd's.
Yeah, one of them said not less than 25 % in equities. so 20/80 stocks/bonds is in the ballpark.
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Old 06-11-2017, 01:48 PM   #46
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If you're relatively young I'm not sure "you don't have to " is a safe strategy.
One word: Inflation. Over the next 30 years? Who knows.
If you're 80 years old that's one thing. Otherwise....risky IMO
Inflation strategies are outlined in the matching strategies in the Boglehead wiki link above.
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Old 06-11-2017, 01:56 PM   #47
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The quote I recall is "Why keep trying to run up the score when you've won the game." I see this as asking when you have enough (however you choose to define that amount), why maintain an AA that is subject to significant volatility.

In my own situation I view that as going from a 60/40 AA prior to retirement to a 40/50/10 AA. Considerably more conservative, provides a nice cash "bucket" in the event of a prolonged downturn, yet has sufficient equities to hedge against the unlikely return of high inflation.

Moving to 100% fixed income investments is too risky for my blood.
I do a small version of this by not reinvesting funds that I have withdrawn from my portfolio but not spent in a given year. To me reinvesting those funds that I was already allowed to spend but just did not happen to spend, is like trying to run up the score, which for me has very small additional benefit. I prefer to leave those unspent funds in CDs and short-term safe investments.

The portfolio itself, however, is exposed to moderate market risk. I am not comfortable dropping below 50% equity exposure because of inflation concerns long term = decades, and those same decades allow us to recover from bear markets. I'm sure are the long-term shrinks, as we enter our 70s and 80s, I will be reevaluating the equity exposure, and probably dropping it.

I view 20% equities as a minimum, however, even when we are much older. And maybe 30% would be OK. Even if only my surviving siblings will benefit!
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Old 06-11-2017, 02:00 PM   #48
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I don't see any 3% CDs on bankrate even.
I bought some earlier this year. They show up occasionally.

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That is because it is not 3 - 5 years ago when I got mine.
Some were available at the end of 2016 and early 2017.
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Old 06-11-2017, 02:06 PM   #49
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I am really starting to think along these lines. Maybe 80/20 with the 80 consisting of bonds and cd's.
Kitces has recommended a "Rising Equity Glide Path" strategy that starts at 30% equities for the new retiree, and gradually lets equities increase from there. This method was good for surviving early "bad times" and had good long term characteristics.
https://www.kitces.com/blog/should-e...tually-better/

Just another option, and to point out that you can start out with low equity exposure, and let it gradually drift up, and reap some benefits.
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Old 06-11-2017, 02:27 PM   #50
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I like bargain hunting and trying to find ways to live well without spending a lot of money so that keeps our overhead low. I don't like losing money, having to ever worry about running out of money or ever have to worry about what the stock market is doing. I know the odds are good that if we had more stocks we would end up with more money but we already have more than enough to live a nice life. We live on a lot less than when we were both working full-time and we are much happier now so I know spending more would not necessarily make us any happier.
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Old 06-11-2017, 02:28 PM   #51
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so I know spending more would not necessarily make us any happier

Good point.
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Old 06-11-2017, 02:44 PM   #52
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I am really starting to think along these lines. Maybe 80/20 with the 80 consisting of bonds and cd's.


By traditional convention, you would say "20/80." Equities/Fixed is the traditional order of expressing AA without having to follow with an explanation of the order you are using.

And....... using that convention keeps geezers like me from getting confused when I read your interesting posts!
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Old 06-11-2017, 04:12 PM   #53
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LOL, I knew when I posted that, that it was screwed up!
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Old 06-11-2017, 04:31 PM   #54
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One book I read had this "eliminate all risk" strategy... I think it was this book:

https://www.amazon.com/Spend-Til-End...dp/1416548912/
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Old 06-11-2017, 04:36 PM   #55
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One book I read had this "eliminate all risk" strategy... I think it was this book:

https://www.amazon.com/Spend-Til-End...dp/1416548912/
Looks interesting. Weird pricing on Amazon, 3.56 and it is new for Hardcover and 9.99 for Kindle. For 3.56 I can take a gander, thanks.
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Old 06-11-2017, 06:57 PM   #56
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One book I read had this "eliminate all risk" strategy... I think it was this book:

https://www.amazon.com/Spend-Til-End...dp/1416548912/
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Looks interesting. Weird pricing on Amazon, 3.56 and it is new for Hardcover and 9.99 for Kindle. For 3.56 I can take a gander, thanks.
I have the book and Kotlikoff's software ESPlanner. If you're looking to go all cash or simplify investing/managing your portfolio - Spend 'til The End is neither, at all...
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Old 06-12-2017, 05:49 AM   #57
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LOL, I knew when I posted that, that it was screwed up!
Heh, heh, we'll let it go this time.
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Old 06-12-2017, 08:30 AM   #58
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Where did I say there's a "correct answer?" Quite the opposite actually...
Where did I say you said there was a "correct answer". Come on, I'm just trying to add to the discussion by presenting an alternative view. Not win a debate.
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Old 06-12-2017, 08:39 AM   #59
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A personal decision. To yourself be true. Or a variation on the popular song song, "Gotta know when to hold'em, know when to fold'em know when to just quit."

I suppose, quitting investing while many peers are still investing is similar to retiring early. Not for everyone, but may work out really really well for you.
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Old 06-12-2017, 08:54 AM   #60
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Where did I say you said there was a "correct answer". Come on, I'm just trying to add to the discussion by presenting an alternative view. Not win a debate.
When you quoted me and led with "Agree with just about everything you said, but still think there is no correct answer." "Come on," if you wanted to present an alternative view, just do it - instead of labeling my view as something it definitely wasn't.

http://www.early-retirement.org/foru...ml#post1893219
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