Originally Posted by MN_1021
I am in middle of switching jobs and my current employer allows me to take my 457B out in chunks of 5 years (monthly disbursements). I have decided to take those disbursements when I am 50- so starts in 2024.
I have about 85K in it
- currently all stock based mutual funds. Again, not trying to time the markets but would appreciate any guidance on how I should change my AA to minimize my losses if the markets were to tank. Please be specific.
If I understand correctly, you have ~$17,000 coming out for each of 5 years, beginning 5 years from now. So, the 2024 money has 5 years to be invested, and the 2029 distribution has 10 years.
From what I have seen, "the market" will be about even or higher after 7-8 years (any downturns are eventually covered by subsequent gains).
If your goal is mostly preservation, I would convert the first 2-3 years of distributions to short- to intermediate term bonds, let the balance ride in equities, and annually convert another year's worth to fixed income. In 2-3 years you'd be 100% bonds.
If your goal is exclusively preservation, I'd move it all in the bonds now. You could adjust equity positions in your other holdings to maintain your desired allocation.