leaving market

[ripper1]

Hi Folks. I think we are pulling the plug on stocks. Currently at 55/45. We both are 70 yrs old and have pension and ss that more than serves our needs. In fact wife just banks her ss. Our nav is about 1m. Any ideas on where we can safely put these funds that will have easy liquidity? Tbills come to mind.

 

[Car-Guy]

Shorter term brokered CD's and/or MM's.

 

[erkevin]

treasuries are highly liquid and are my first thought. Any tax considerations?

 

[rembrandt]

Hi Folks. I think we are pulling the plug on stocks. Currently at 55/45. We both are 70 yrs old and have pension and ss that more than serves our needs. In fact wife just banks her ss. Our nav is about 1m. Any ideas on where we can safely put these funds that will have easy liquidity? Tbills come to mind.

Smart move. You've won the game and walked away with your marbles.

 

[Healthy Lifestyle]

At my age 68, I am keeping my funds in mmf, cd's, and Tbills.
Would also like some other options with safety in mind.

 

[ripper1]

treasuries are highly liquid and are my first thought. Any tax considerations?

Not really. Don't know how what will happen in 2025 after current taxes sunset.

 

[tulak]

Treasuries, maybe TIPS. I would be worried about inflation. That’s your biggest risk if you move out of equities. Is the pension COLA?

What’s the goal?

It seems if all expenses are covered, there’s little risk in keeping equities.

 

[audreyh1]

Not really. Don't know how what will happen in 2025 after current taxes sunset.

Current taxes sunset in 2026.

 

[Murf2]

This is a very timely thread for me. I have been considering the same question. Our nest egg is slightly smaller but we can get by with what we have.
My question is about inflation protection.
Would rolling short CD’s really be at that much more risk than TIPS?
I have never invested in TIPS before & don’t know if I should try to learn the ropes at this late stage.

Thanks,
Murf

 

[audreyh1]

FWIW, 30% in equities at age 70 is recommended to keep up with inflation. At least one of you is likely to live another 2 decades or more so inflation will still have an impact.

Also the surviving spouse will experience a cut in SS and maybe in pension income. If your pensions are also COLA and cover both of you maybe this is not an issue.

If one of you needs LTC, that can also drain the nest egg for the surviving spouse.

These are just things to take into account when considering your long term investment strategy.

 

[REWahoo]

It seems if all expenses are covered, there’s little risk in keeping equities.

^ This.

ripper1, when we reached our 70's I did a modified version of what you are proposing by going to a very conservative 35/35/35 allocation. I threw in an extra 5% to be sure I erred on the side of caution.

 

[gcgang]

Depends what you mean by safe.

If you mean, no loss in nominal value, tbills, CDs, mmf, savings account, coffee can of cash buried in backyard all work.

If you mean maintain your current purchasing power/standard of living, doing any of the above would not be totally “safe”, as inflation will gradually erode the purchasing power of your stash.

That being said, I think your answer of tbills is best.

 

[38Chevy454]

I'll agree with the others for the conservative investments that T-bills or TIPS. However, consider that since you have longer term view on this money, why not stay with some equities? It's not greed, but having equities that can grow and (in long term avg) do better than inflation, will serve you for the later years. Unless you plan on needing a big chunk of this money in near term, I would stay in equities maybe 40% or as some previous replies suggested 30% or more. Equities are still going to be very liquid.

 

[bmcgonig]

35% in Berkshire. He’s quite safe and won’t go crazy. Also he’s about 30% Tbills.

The rest in CDs and Tbills.

 

[Sunset]

Hi Folks. I think we are pulling the plug on stocks. Currently at 55/45. We both are 70 yrs old and have pension and ss that more than serves our needs. In fact wife just banks her ss. Our nav is about 1m. Any ideas on where we can safely put these funds that will have easy liquidity? Tbills come to mind.

treasuries are highly liquid and are my first thought. Any tax considerations?

In IL, the Tbills will be State tax free. Along with SS and pension.

Maybe your pensions are COLA'd so purchasing power will be preserved , unless the pension fails. Which has happened in some places.

I truly believe over the next 20 years, the market will do better than interest only investments. As a couple, there is a good chance one of you will live for another 20->25 years.

What happens when 1 of you dies ? What happens to the pension ? You will lose the lower SS.

 

[braumeister]

I threw in an extra 5% to be sure I erred on the side of caution.

... and also because, (everyone say it together now) numbers is hard.

 

[audreyh1]

Yeah, I finally got the 35/35/35 allocation!

I knew something wasn’t quite right.

 

[Jerry1]

SS and pension cover most our spending. Therefore, I did something similar and it’s been mentioned above. I left 35% in equities. Roths are 100%in equities but total was still 35%. My plan is to let the equity percentage do whatever it does (not rebalancing) and expect that money will be for my heirs or maybe LTC. Worse case is needing it to cover inflation. I felt like winning the game allowed me to do two things. Hold a large percentage of safe money and not care about the equity side.

 

[Texas Proud]

If I were going that direction (I am not), I would be buying some longer term investment grade corporate bonds... you can lock in the relatively higher interest rates (I do not think they are going to go down that much but who knows for sure)..

Maybe see when interest is paid but since you do not need the money it might not be worth it..

 

[pb4uski]

SS and pension cover most our spending. Therefore, I did something similar and it’s been mentioned above. I left 35% in equities. Roths are 100%in equities but total was still 35%. My plan is to let the equity percentage do whatever it does (not rebalancing) and expect that money will be for my heirs or maybe LTC. Worse case is needing it to cover inflation. I felt like winning the game allowed me to do two things. Hold a large percentage of safe money and not care about the equity side.

I'm on a similiar path but with a twist... my current target is 5% common, 30% preferred, 40% investment-grade corporate bonds, 20% US gov/agencies and 5% cash.

The 5% common is an "inheritance" from my Dad's trust but the step-up in basis was in 2005 but I didn't receive the shares until late 2023 so they have significant unrealized gains so I'll just keep them.

I prefer preferreds because I can get a lot of the exected return of common stock but with much less volatility. My preferred portfolio yields 6.84% and is mostly investment grade credits. My investment hypothesis is if I can get 68% of the historical 10% total return of common stocks with preferreds with much less volatility that I prefer that. Plus many pundits believe that common stock total returns over the next decade will be lower as the current high valuation multiples drift back to historical averages. Also, if rates decline as expected, I may get some capital appreciation in addition to the 6.84% dividend yield.

 

[marko]

I'm going on 73, still 70/30 and staying put.. Don't really need it, no direct heirs, just like watching the market and seeing it grow. 85% of what we live on is from interest and dividends.

Inflation, longevity and LTC could make things dicey someday. A lot can happen. "Just a little bit more"

 

[Al18]

Medical inflation has grown at a much faster rate than the general inflation rate for the past 25 years, according to Link

Fixed income has never been able to keep up this rate. If you want to reduce stock market volatility, reduce your equity % in your portfolio, but keep enough to outpace inflation.

 

[RetiredHappy]

Yeah, I finally got the 35/35/35 allocation!

I knew something wasn’t quite right.

I stole the other 5% from my husband. Shhh... he doesn't know it yet.

 

[Pointby2]

... just like watching the market and seeing it grow. 85% of what we live on is from interest and dividends.

I wish I didn't like watching it grow so much. The market this year has been fun.

 

[Midpack]

treasuries are highly liquid and are my first thought. Any tax considerations?

We could quit equities but I wouldn’t due to the tax hit on 20+ years of capital gains. We’d have to leave slowly, and that’s not likely to achieve the OP’s goals. Treasuries look like a decent place to park cash for the next year or several, along with some MMFs for liquidity, but what would you do when yields once again aren’t keeping up with inflation some day?