HealthyFuture
Recycles dryer sheets
- Joined
- May 12, 2021
- Messages
- 101
Thanks for such a vibrant, well-informed and generous-with-your-insight community.
I am getting close to pulling the plug. DW did earlier this year; I expect to do so within the year once I plot my exit strategy, which includes making sure I have clear activities/goals lined up for myself.
For the entirety of my 25+ years of investing, I have put most of my individual earnings into stocks. I have never been diversified between asset classes. (My retirement accounts are roughly 85% stock at age 50; not sure what the full picture is since I also have some cash and non-retirement equities accounts, but I’m going to guess it’s still roughly 85+% stock.) We moved asset allocation of my older DW’s retirement account down to 60/40 stock/bond a few years ago. I had envisioned leaving my allocation more high-risk since I’m younger than she is (by 10 years) and was planning to continue working for the foreseeable future. But that has changed.
We have three-plus years of cash, which seems like plenty to weather any sequence of returns risk. (I recently wondered if we should use some of it to purchase i bonds based on another thread.) And yet, in spite of having a very high risk tolerance (“set it and forget it”) for the last several decades, I’m no longer as confident that is a prudent thing to continue. How do we know (for example) that the US stock market won’t go the route of the Japanese market some day and stay that way? Until now, I often said to DW that the higher-risk approach was ‘safe’ for the long-term because we wouldn’t need the money for a long while. But now that the time horizon isn’t in fact so long — and as I watch the very real effects of aging in my parents and others and expect to need long-term care myself at some point that will be quite expensive — it seems more prudent to back off the risk, at least a bit. (There are no pensions in our future; SS yes. No heirs to leave money to, but a desire to donate generously as long as our health and that of family members are taken care of first).
However, I’ve never ‘traded’ from one asset class to another, and therefore haven’t a clue if I just log in to my account and send 25% (or whatever figure) over to bonds if that gets taxed this year, or only when I take it out. (I assume the latter.) Or if that’s even smart to do in one fell swoop (I learned the ‘dollar cost averaging’ approach to investing to not put everything into a fund at one time). And I’m not entirely certain what trusted resources to consult (‘trading asset classes’ search on the internet seems to bring up a lot of definitions but not necessarily how-to’s).
I welcome any input. I think I’m not ready to drop to 50-50 (maybe 65/35 or 70/30?) But how to do it is a bit beyond me.
I am getting close to pulling the plug. DW did earlier this year; I expect to do so within the year once I plot my exit strategy, which includes making sure I have clear activities/goals lined up for myself.
For the entirety of my 25+ years of investing, I have put most of my individual earnings into stocks. I have never been diversified between asset classes. (My retirement accounts are roughly 85% stock at age 50; not sure what the full picture is since I also have some cash and non-retirement equities accounts, but I’m going to guess it’s still roughly 85+% stock.) We moved asset allocation of my older DW’s retirement account down to 60/40 stock/bond a few years ago. I had envisioned leaving my allocation more high-risk since I’m younger than she is (by 10 years) and was planning to continue working for the foreseeable future. But that has changed.
We have three-plus years of cash, which seems like plenty to weather any sequence of returns risk. (I recently wondered if we should use some of it to purchase i bonds based on another thread.) And yet, in spite of having a very high risk tolerance (“set it and forget it”) for the last several decades, I’m no longer as confident that is a prudent thing to continue. How do we know (for example) that the US stock market won’t go the route of the Japanese market some day and stay that way? Until now, I often said to DW that the higher-risk approach was ‘safe’ for the long-term because we wouldn’t need the money for a long while. But now that the time horizon isn’t in fact so long — and as I watch the very real effects of aging in my parents and others and expect to need long-term care myself at some point that will be quite expensive — it seems more prudent to back off the risk, at least a bit. (There are no pensions in our future; SS yes. No heirs to leave money to, but a desire to donate generously as long as our health and that of family members are taken care of first).
However, I’ve never ‘traded’ from one asset class to another, and therefore haven’t a clue if I just log in to my account and send 25% (or whatever figure) over to bonds if that gets taxed this year, or only when I take it out. (I assume the latter.) Or if that’s even smart to do in one fell swoop (I learned the ‘dollar cost averaging’ approach to investing to not put everything into a fund at one time). And I’m not entirely certain what trusted resources to consult (‘trading asset classes’ search on the internet seems to bring up a lot of definitions but not necessarily how-to’s).
I welcome any input. I think I’m not ready to drop to 50-50 (maybe 65/35 or 70/30?) But how to do it is a bit beyond me.