Retired with only 300K in ML/ split 60/40

My urge is to stop and try to preserve the 300K at this point.
Can anyone advise?
We can't let it sit and continue to lose money -it's what we have to live on - there is no more money being put into this account.
Advice??

Ride it out, that’s why you have 40% in bonds.

Stay the course.... put on your seat belt, cinch it tight and hold on.

Seriously though, IMO while there is real risk that the corona virus will mute economic activity until it is under control, in the whole scheme of things it is temporary. Stocks will go down and then will ultimately recover. No need to hit the panic button.

If it helps, just stop looking.

Even if stocks go down 20% and bonds are stable your $300K would dip down to $264k (12%... 20% * 60%).. and then will eventually recover.

Resist the urge to buy high and sell low.

Turnoff the news for a couple of weeks - and go do something outside. If you must get news, go online and read the newspapers.

This too shall pass

rathgar said:

...We can't let it sit and continue to lose money....

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As long as it's sitting you're not losing money. You'll only lose money if you sell out now. You're the one that controls whether or not you lose money...not the ups & downs of the market.

Well, it's quite possible that 60/40 was too aggressive for your risk tolerance and your investment objective.

If a 10% market correction has you jittery, then you have a problem with your AA.

Can't do much about that now.

+1 to all of the above responses.

What's an "ML"? Merrill-Lynch? Are you paying fees? Are you in high expense ratio funds? What are you in? 60/40 doesn't tell us if you are sufficiently diversified in each area.

RunningBum said:

+1 to all of the above responses.

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Yes.

njhowie said:

Well, it's quite possible that 60/40 was too aggressive for your risk tolerance and your investment objective.

If a 10% market correction has you jittery, then you have a problem with your AA.

Can't do much about that now.

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But going much below 60/40 might just create another problem - not enough growth to keep up with inflation.

-ERD50

Ride it out. Locking in losses is the worst thing you can do.

Since, from your other posts, you and your husband have some pensions/SS, etc., I'd strongly advise you stay put as others have said. You sell now and you lock in the losses. You wait.

Instead of selling to "preserve" the balance, look at the other side of things: Where can you temporarily reduce expenses (many of us might end up taking travel down a lot this year, defer non-essentials, etc). Or look for a part time job if there's really an income gap.

Someone once posted that like there are only a handful of trading days throughout the year that provide a majority of that years yield. IF you are out of the market and miss those gains on those 1 or 2 days...you've effectively lost the opportunity. Don't oversteer, stay the course. Don't knee-jerk and steer the opposite direction or you'll flip the car!

Aerides said:

Since, from your other posts, you and your husband have some pensions/SS, etc., I'd strongly advise you stay put as others have said. You sell now and you lock in the losses. You wait.

Instead of selling to "preserve" the balance, look at the other side of things: Where can you temporarily reduce expenses (many of us might end up taking travel down a lot this year, defer non-essentials, etc). Or look for a part time job if there's really an income gap.

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+1

My sense from OP's other posts is that she is 56 and contemplating retirement. Her husband is 65 and retired. I don't think she has retired yet, but I may have misread the prior posts. ML = Merrill Lynch from her prior posts.

If OP hasn't retired yet, it might provide OP with piece of mind plus economic security to stay in the w*rk force for another school year (through May/June 2021) or so to ride out the current storm while allowing their investments to (hopefully) recover.

Conversely, if OP already has retired, they could be a facing a SORR scenario.

I don't believe OP has posted a budget yet -- but again, I could have missed it.

*Edit: Well, from the title of her post above, I guess she did go ahead and retire between last fall and now. Maybe she could do some substitute teaching?

You have been given good advice above. If you sell now, you will lock in your losses.

I was extremely nervous back 2008-2010, but I listened to the smart folks on this site and did nothing. It even got to the point that I told my DH not to open his 401K mail. It upset him too much. So glad that we did not do anything.

I am not sure, but we have quite a bit of money in his stable value fund and I have some in my TSP G fund, that I might move to the stock funds, if the market goes down enough. Who knows, I might be too afraid to do this, but I certainly won't sell.

Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?

Run. The vast majority of annuities are great for the seller and bad for the buyer. Everytime the market gets squirrelly the investment houses break out their annuity pitches to try to sell to the naive and fearful and collect a boatload of commissions from the annuity writers.

Below is from Vanguard post regarding the coronavirus:

https://vanguardblog.com/2020/02/24...020:BTL:TXT:XX:ED:MECN:OTH:OTS:101:X:POS02:XX

With this knowledge, we encourage investors, as we have for ages, to hold a diversified portfolio of assets, to remain disciplined by avoiding impulsive decisions based on fear and uncertainty, and to stay focused on their long-term goals and their plan for achieving them.

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Dump ML as soon as you can and move to Fidelity/Vanguard/Charles Schwab.

If they are suggesting that you move to annuities at this point in time when the markets took a dive - they are acting in their interest and not yours. Not only are you going to lock in your losses, you will now get locked into an annuity for which the sales guy will make a commision of 5%.

The markets dropped 10%, and the annuity will cost you 5% - your portfolio will take a permanent 15% hit.

RUN from ML.

rathgar said:

Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?

Click to expand...

NO! I used to work in the IT department working with Products that were variable annuities meant to confuse the literal piss out of 95% of human beings.

They are not for you, they are for some old person who has literally never paid a bill in their lives and their husband/wife passes and they don't have any competence to learn the ropes of investing...and even then that same person would STILL be better off with a Managed Advisor service with Vanguard.

In fact, I now despise ML and think you should move your money from their to Vanguard because they made that pitch. I would.

rathgar said:

Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?

Click to expand...

Lock in your losses and pay them commission while probably locking in on annuities while interest rates are this low? 3 strikes. Horrible advice.

rathgar said:

Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.

Click to expand...

Holding on to your job (if you want to do it) might be a good idea - you will earning an income and not drawing down your assets - also might be a great time invest in the market now while stocks are on sale.

OMY

Do nothing with your portfolio. Keep working for now. When the dust settles and markets recover, then consider moving your money from Merrill to Fidelity/Vanguard/Schwab. If you make that move, consider adjusting your asset allocation to reduce equities if you have found this correction unnerving. But don’t do anything now—wait it out and don’t lock in the losses! And absolutely NO to the annuity. Total rip off.

To the OP...

I just read many of the posts you've made in the last six months. Retirement is not an easy decision, at least not for most, and it appears it is a particularly difficult decision for you based on the threads you've started and the posts you've made.

One of your posts says you're not a millionaire. While that may be true in the sense that you don't have a million dollars in the bank or investments, you have several potential streams of income at your disposal so I suspect you are a "millionaire" but don't realize it. As others have said in reply to your posts you need to look at the big picture. You need to closely examine your expenses to see where the money goes. You need to understand the current streams of income and future income sources to determine if you've achieved your "number."

As for the subject of this thread, and a subsequent thread about an annuity, it sounds like you and your husband should have little exposure to equities, particularly for the $300,000 mentioned here.

Everyone's situation is different. I suspect you have more "money" than you think but I don't know that for certain. If a 10% drop in the stock market, with perhaps more declines to come, makes you uneasy, you need to reconsider your investments.

Please don't think I'm happy about the recent decline in the stock market but DW and I take a big picture approach to the topic of investments and for us a large correction in the stock market will not be the end of the world.

OOPS! Almost forgot, what in the world are you doing with a big-name, high commission broker?

rathgar said:

...I'm not yet retired ...Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?

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In the belief that repetition helps a message stick:
Do not sell stocks now. Do not buy an annuity. Fire the Merrill Lynch [-]advisor[/-] leech. Move to Vanguard, Fidelity or Charles Schwab.

Not knowing your retirement portfolio nor your expenses, but assuming the $300K is the nest egg, then working till at least 62 (and Social Security) might be warranted.

rathgar said:

My urge is to stop and try to preserve the 300K at this point.
Can anyone advise?
We can't let it sit and continue to lose money -it's what we have to live on - there is no more money being put into this account.
Advice??

Click to expand...

You aren't losing any money unless you sell.

The value of your equities dropping is not the same thing. If you can't stomach a correction, perhaps you shouldn't own any equities at all.

rathgar said:

Thanks all for the responses.
I am not yet retired - was about to put in my letter but I am holding off for the moment.
Our MLynch advisor spoke to my DH today and suggested annuities??
Thoughts?

Click to expand...

I think you need to educate yourself before ML and your emotions wreck your nest egg.

Read this: https://www.bogleheads.org/wiki/Bogleheads®_investing_start-up_kit