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The game never ends because the rules will keep changing
Old 01-17-2018, 08:31 PM   #21
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The game never ends because the rules will keep changing

Quote:
Originally Posted by Aerides View Post
Enough to RE is one number.

Enough to say "take it off the table and put it all in a CD" is entirely another number, probably would have to be at least double your RE number for a 15 year retirement, triple for a 30, etc.

For me to say "won the game" in that definition, idk I'd want at least 8 figures, even then...I think I'd still keep 20% invested.
+1

I have enough to RE now, based on a number. But that number is a function of other numbers, some of which need to exhibit growth to be a reliable funding source in the face of inflation/taxes/miscellaneous threats. I expect that some equity exposure will therefore be necessary over my anticipated 30 year retirement.

If I can't rely on some growth, then my RE number would need to be so large I'd never retire.
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Old 01-17-2018, 08:36 PM   #22
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My Pops died at 92 years of age.

At that time he was 75% equities, 25% cash/bonds.
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Old 01-17-2018, 08:40 PM   #23
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I'm with Braumeister. People who talk about "winning the game" and moving entirely out of equities seem to me to be playing an even more dangerous game. If you want to lower equity percentage to 50% or 40%, fine. But going too low introduces a new way to fail and in my lifetime I have seen high inflation destroy fixed income investments.

I'd rather "win the game" by having such a big pile divided every which way, so I'm sure to have both winners and losers and cover as many economic possibilities as I can. It doesn't bother me to have more than I need and leave some for family or charity. I'm going to have to do that anyway since I do not know how long I'll live or what higher medical expenses I might face.
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Old 01-17-2018, 09:05 PM   #24
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Originally Posted by Red Badger View Post
Survey says.....

Braumeister nailed it!

My FIdo guy used the "won the game" phrase when suggesting an annuity. I asked him (young guy) if he remembers WIN badges. They were popular is the seventies (when I was in high school). He looked confused. I suggested he google the topic and wished him a good day as I left.
I remember! Wasn't that "I'm going to Whip His A..." wait, wait. Wrong President. It was the one before. "Whip Inflation Now". What's my prize?

Yes, I've won, but that simply means only being 50-55% in equities instead of 75%.
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Old 01-17-2018, 09:24 PM   #25
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Technically 30% equities would be enough to protect against inflation, but I’m not ready to go that low until I think my retirement horizon has dropped to say under 25 years.
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Old 01-17-2018, 11:04 PM   #26
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Are stocks the best hedge for inflation? I have read more articles along these lines: "broad equity returns have not intrinsically provided a good hedge against inflation."
Source: https://www.pimco.com/en-us/insights...ead-with-care/

The mutual fund advisor we talked to said we needed stocks for growth, but his own planning tool showed we would be fine with all short term fixed income. And I presume TIPS and I-bonds would perform even better but they weren't option choices in their planner.
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Old 01-18-2018, 12:14 AM   #27
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We think we won but we don't see any reason to totally stop playing. We try to play less but the market keeps going up so fast.
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Old 01-18-2018, 01:14 AM   #28
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I'm following a glide path, reducing stocks and increasing bonds as I age (figure I'm best following the advice of good CFPs and groups like Vanguard).

Maybe, in a way, winning means that you can move to more conservative asset mixes earlier in life.
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Old 01-18-2018, 05:01 AM   #29
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I asked myself a different question: “would I still retire early if the stock market dropped 50 percent”. I then adjusted my AA until the answer was Yes.

This is another approach to win the game /stop playing.
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Old 01-18-2018, 05:07 AM   #30
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We only need a 1.5% WR to spend pretty freely. I have reduced our AA from 80+% a few years before RE to about 59% now.
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Old 01-18-2018, 05:37 AM   #31
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Same answer to this question, as always, but maybe different words this time. I would have probably not ER'd when I did if I had to depend on the equity market returns to fund my retirement in the lifestyle I wanted.

However, I guess I'm still greedy, to a point. Bucket one has zero equities (just fixed income investments), never has and probably never will. It's more than enough to last me and the DW the rest of our lives in a comfortable lifestyle, barring any economic collapse, and is inflation adjusted "on my books". Bucket two is for investing, speculating, hobbies, travel, general living expenses, etc. If bucket two were all lost, I'd be PO'd, but I'd still be okay.

Maybe I'd reconsider how bucket one is invested, if I lost all of bucket two. Never thought much about it.
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Old 01-18-2018, 05:39 AM   #32
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Having read through all of the replies, as I see in many comments these days, both here and other on-line communities I participate in, there is currently a tremendous under-appreciation for risk and the markets.

I believe many folks are over-exposed to the markets and unfortunately it is going to come back and bite at some point. It's been long enough since the financial crisis that memories have faded and many folks are making the same mistakes as last time around.

I'm sorry to be the squeaky wheel on this thread, but with the markets continuing to head relentlessly higher, folks that are looking at large gains need to take a step back and have an extremely objective look at their situation. Revisit your risk tolerance and investment objective. I was particularly moved by the one comment earlier in the thread which stated "I could easily live with a 50% permanent “haircut”". If that's really true, it's wonderful that you have done extremely well and your personal situation allows for this. I personally find it difficult to believe that anyone could honestly/sincerely make the statement.

Back in 2008/2009 many folks in/at/near retirement had their situations permanently changed for the worse because they had not been prudent in this regard.

There is nothing wrong with taking money off the table or even pushing back and walking away from the table.
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Old 01-18-2018, 05:49 AM   #33
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Quote:
Originally Posted by njhowie View Post
I'm sorry to be the squeaky wheel on this thread, but with the markets continuing to head relentlessly higher, folks that are looking at large gains need to take a step back and have an extremely objective look at their situation. Revisit your risk tolerance and investment objective. I was particularly moved by the one comment earlier in the thread which stated "I could easily live with a 50% permanent “haircut”". If that's really true, it's wonderful that you have done extremely well and your personal situation allows for this. I personally find it difficult to believe that anyone could honestly/sincerely make the statement.
I believe some folks here have done well enough and/or have so much of their essential expenses covered by pension/SS or such a low withdrawal rate that they can make such a statement.

The individual who stated they could handle a 50% permanent haircut was not kidding. There are some very wealthy posters on this forum.

For the rest of us, being able to handle a 50% drop in equities, hopefully not permanent, is a good test of the appropriateness of our AA.
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Old 01-18-2018, 05:52 AM   #34
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But the statement was not a 50% permanent haircut. It was a 50% drop in equities which might mean a 25% drop in assets for 50/50 allocation and nothing about it being permanent.
Please see on the first page of comments...

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I could easily live with a 50% permanent “haircut”.
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Old 01-18-2018, 05:53 AM   #35
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I stay in the equity market because of inflation. Needed to offset a non COLA pension.
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Old 01-18-2018, 07:00 AM   #36
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Quote:
Originally Posted by njhowie View Post
I was particularly moved by the one comment earlier in the thread which stated "I could easily live with a 50% permanent “haircut”". If that's really true, it's wonderful that you have done extremely well and your personal situation allows for this. I personally find it difficult to believe that anyone could honestly/sincerely make the statement.

I believe there are many people here that could weather a 50% correction in the market, maybe even a permanent haircut but nothing is ever permanent in a market. That might be a good poll.
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Old 01-18-2018, 07:27 AM   #37
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Please see on the first page of comments...
I had already quickly fixed my response to mention Danmar’s case. I believe he is perfectly sincere.
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Old 01-18-2018, 07:38 AM   #38
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Originally Posted by audreyh1 View Post
being able to handle a 50% drop in equities, hopefully not permanent, is a good test of the appropriateness of our AA.

Agree 100%. I’m 55 and if I live another 30 years (big if but for the sake of discussion) I would expect to see drops of 25-50%. I saw 2008-2009 when the s&p dropped about 50% and then the dot com implosion saw the nasdaq drop well over 70% and in 1987 I saw the Dow lose 25% in one day. The dog days don’t last forever. I’ve also seen the market rise over 100% (2009 to now) and the good days don’t last forever either....allocate accordingly.
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Old 01-18-2018, 07:52 AM   #39
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Quote:
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My Pops died at 92 years of age.

At that time he was 75% equities, 25% cash/bonds.
I like your Pops thinking.
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Old 01-18-2018, 08:16 AM   #40
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Quote:
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I don’t really acknowledge it as a game so I wouldn’t even consider quitting. We have by most measures “more than enough” so in reality I’m really investing for my daughter. I could easily live with a 50% permanent “haircut”. So why not keep going? For sure, It helps to have a high risk tolerance, and I do. Inflation, as Braumeister says will always be a risk.

Boils down to the question. “should I take more risk because I can afford to or less risk because I dont need to.” The answer to this question is quite personal and will depend on your risk tolerance and spending utility function. Ie do you have a productive use for more wealth/income?

Do you think people who are mega rich ie billionaires, ever consider “quitting the game”? Not sure, but I doubt it.
I like your thinking as well. Your comment on a 50% lose and still be able to live well is something everyone should ask themselves before retiring. If you can weather the storm I see no need to stop playing the game. I would of thought with the great savers and money minds on this site more would have a higher risk level and would never stop playing even if you won the game.
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