My situation:
- Married, 55 years old, hoping to retire comfortably in 5-7 years. Not really early.
- All of our retirement savings are in tax deferred accounts with Vanguard. Mostly in a 401K accounts with limited fund selections.
- Paid off house, no debt.
- 80/20 stocks to bond allocation during the years we have been accumulating money for retirement.
- I don't claim to be extremely knowledgeable about investing. We have kept costs down, and we have for the most part stayed invested.
- A confession: I did flinch a little bit in 2008, and adjusted our allocation down to 60/40 as the market fell, and moved it back to 80/20 on the way back up.
- We have both been diligent about saving and living a comfortable LBYM lifestyle.
Investment goals:
We want our account to continue growing, so we plan to continue owning equities. As we get closer to retirement, we also want to be a little more protective of the money we have accumulated. The obvious answer is to change our allocation. We are now at 70/30, and I'm considering more changes.
My question:
I continue to read here and other sources that bond mutual funds are risky at this time, because interest rates are extremely low, and they will eventually have to go up. This doesn't make me want to reallocate into more bonds.
I'm considering moving some of our money into cash as a way to reallocate our accounts into a slightly safer position. I was wondering if others have strategies for doing this.
One strategy that I thought of: If I'm up for the year, move that amount into cash, and if I'm down for the year move that amount from cash to stocks.
Has anyone tried something like this? Is this a silly waste of time? Do you have better recommendations?
Thanks in advance for your comments.
JP
- Married, 55 years old, hoping to retire comfortably in 5-7 years. Not really early.
- All of our retirement savings are in tax deferred accounts with Vanguard. Mostly in a 401K accounts with limited fund selections.
- Paid off house, no debt.
- 80/20 stocks to bond allocation during the years we have been accumulating money for retirement.
- I don't claim to be extremely knowledgeable about investing. We have kept costs down, and we have for the most part stayed invested.
- A confession: I did flinch a little bit in 2008, and adjusted our allocation down to 60/40 as the market fell, and moved it back to 80/20 on the way back up.
- We have both been diligent about saving and living a comfortable LBYM lifestyle.
Investment goals:
We want our account to continue growing, so we plan to continue owning equities. As we get closer to retirement, we also want to be a little more protective of the money we have accumulated. The obvious answer is to change our allocation. We are now at 70/30, and I'm considering more changes.
My question:
I continue to read here and other sources that bond mutual funds are risky at this time, because interest rates are extremely low, and they will eventually have to go up. This doesn't make me want to reallocate into more bonds.
I'm considering moving some of our money into cash as a way to reallocate our accounts into a slightly safer position. I was wondering if others have strategies for doing this.
One strategy that I thought of: If I'm up for the year, move that amount into cash, and if I'm down for the year move that amount from cash to stocks.
Has anyone tried something like this? Is this a silly waste of time? Do you have better recommendations?
Thanks in advance for your comments.
JP