Ed B
Recycles dryer sheets
This question bubbled up while reading some of the most recent posts on the class of 2018 thread.
I think I understand the popularity of finding the AA that fits your risk tolerance and sticking with it, especially when most of ones ER revenue comes from ones portfolio. I say "I think I understand" because I am continually learning from this group as well as other good sources.
Repeating myself from other threads my RE revenue is 75% covered by my non-cola pension and my wife's SSDI. I am 58 and four years out from the possibility of starting SoSec. I had planned on something like a 65/30/5 AA immediately when I retired and take monthly distributions from that, but with two years expenses in my 401k stable value for pre-59.5 monthly withdrawals, and with 75% of budgeted revenue coming from reliable non-portfolio sources, I am leaning more toward a bucket approach until I start SoSec.
By doing this I would be more equity heavy, perhaps 80 to 85 percent and refill the stable value bucket each year. I know the risk of a bear in the next couple of years which would kick the chair out from under my plan to a degree, but the longer we keep the bear at bay the better my performance should be and help me put off starting SoSec longer. And as I have mentioned elsewhere once I start my SoSec my portfolio will fund a raise, cost of living increases and lumpy expenses.
I have read some of the threads debating bucket vs hybrid bucket/AA vs AA and tend to agree that AA with rebalancing will be my choice once I start SoSec. I could put 4 years distributions in stab LOL e value or cash-like funds to bridge to 62 but I don't want to put 7 (65) 9 (FRA) or 12 years (70) distributions in a cash-like fund up front thereby take it out of equities. I need the chance for that money to grow and outpace inflation.
I guess the question really is does the bucket approach make more sense in a situation like mine were my budget is funded so heavily by pension and my spouses SSDI? Who else is doing this or something like it.
As an FYI I could cut back on normal budget needs by about 8 grand if the bear arrives at a bad time for me.
I think I understand the popularity of finding the AA that fits your risk tolerance and sticking with it, especially when most of ones ER revenue comes from ones portfolio. I say "I think I understand" because I am continually learning from this group as well as other good sources.
Repeating myself from other threads my RE revenue is 75% covered by my non-cola pension and my wife's SSDI. I am 58 and four years out from the possibility of starting SoSec. I had planned on something like a 65/30/5 AA immediately when I retired and take monthly distributions from that, but with two years expenses in my 401k stable value for pre-59.5 monthly withdrawals, and with 75% of budgeted revenue coming from reliable non-portfolio sources, I am leaning more toward a bucket approach until I start SoSec.
By doing this I would be more equity heavy, perhaps 80 to 85 percent and refill the stable value bucket each year. I know the risk of a bear in the next couple of years which would kick the chair out from under my plan to a degree, but the longer we keep the bear at bay the better my performance should be and help me put off starting SoSec longer. And as I have mentioned elsewhere once I start my SoSec my portfolio will fund a raise, cost of living increases and lumpy expenses.
I have read some of the threads debating bucket vs hybrid bucket/AA vs AA and tend to agree that AA with rebalancing will be my choice once I start SoSec. I could put 4 years distributions in stab LOL e value or cash-like funds to bridge to 62 but I don't want to put 7 (65) 9 (FRA) or 12 years (70) distributions in a cash-like fund up front thereby take it out of equities. I need the chance for that money to grow and outpace inflation.
I guess the question really is does the bucket approach make more sense in a situation like mine were my budget is funded so heavily by pension and my spouses SSDI? Who else is doing this or something like it.
As an FYI I could cut back on normal budget needs by about 8 grand if the bear arrives at a bad time for me.