The good news: After crunching numbers and having some long talks about lifestyle and income requirements, my wife and I have decided it's possible and desirable to move up ER by two years. We're aiming for a departure of just about 2 years from now.
Long-term, our two COLA'ed pensions will provide 85%+ of our desired income, and if necessary, we could get by on them alone without making huge sacrifices. However under our new plan, they won't kick in until 5 years after we leave. In order to pull this off, we'll need to heavily tap our pre-tax plans - we each have a 401k, 457 and 401a. The plan is to survive these 5 years by draining both 457's (no early withdrawal penalty), and rollover all of the other plans to IRA's so we can take the max 72t withdrawal.
The problem - our current allocation and contributions were set up with a longer term plan in mind, with much less reliance on the pre-tax money near term. As such, I made the decision to be pretty aggressive with it...and needless to say, it's been taking a beating. I need to do something to reduce the volatility, but am unsure how and when to best to approach this.
One thought I had, is to make few if any changes to the existing allocation immediately, but change 100% of our future 457 contributions to the lowest risk, lowest return options available to us. We could contribute enough over the next 2 years to this "bucket", to last us through the end of 2011. The thought/hope being, that the existing funds might start making some recovery over the next 3 years, during which time I can gradually change the allocations without taking too much of a bath.
I realize the above may border on the dreaded "market timing" I've tried to avoid, but short of working longer and sticking to our original plan, the only other option I see is taking our lumps right now.
Any words of wisdom? I'm pretty tough...feel free to include ridicule for my past actions as well, in the interest of educating others.
Long-term, our two COLA'ed pensions will provide 85%+ of our desired income, and if necessary, we could get by on them alone without making huge sacrifices. However under our new plan, they won't kick in until 5 years after we leave. In order to pull this off, we'll need to heavily tap our pre-tax plans - we each have a 401k, 457 and 401a. The plan is to survive these 5 years by draining both 457's (no early withdrawal penalty), and rollover all of the other plans to IRA's so we can take the max 72t withdrawal.
The problem - our current allocation and contributions were set up with a longer term plan in mind, with much less reliance on the pre-tax money near term. As such, I made the decision to be pretty aggressive with it...and needless to say, it's been taking a beating. I need to do something to reduce the volatility, but am unsure how and when to best to approach this.
One thought I had, is to make few if any changes to the existing allocation immediately, but change 100% of our future 457 contributions to the lowest risk, lowest return options available to us. We could contribute enough over the next 2 years to this "bucket", to last us through the end of 2011. The thought/hope being, that the existing funds might start making some recovery over the next 3 years, during which time I can gradually change the allocations without taking too much of a bath.
I realize the above may border on the dreaded "market timing" I've tried to avoid, but short of working longer and sticking to our original plan, the only other option I see is taking our lumps right now.
Any words of wisdom? I'm pretty tough...feel free to include ridicule for my past actions as well, in the interest of educating others.