leaving market

[RetiredHappy]

I see that MYGAs are not mentioned in this thread. We like MYGAs due to paying higher interest rates and the ability to log in the rates for longer term - 3 to 10 years.

 

[Sunset]

To quit equities for safety, what other reason could there be other than DMT (Dirty Market Timing), sort of implies to me that one is worried about a 1929 type of drop.
This would also mean that corporate bonds would be worthless as many companies declare bankruptcy.

I generally put my $$ earning interest into Treasuries as I consider that the safe money.

 

[ripper1]

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.

3% compounded annually pension.

 

[SnowballCamper]

To answer the question, I'd say a TIPS ladder. But if the asset allocation got you to this point, why give it up now? It's pretty simple to manage 50% VOO and run a treasury ladder with the other 50%. Then rebalance if you need to when a rung of the ladder matures. You've got living expenses covered, so there is no SORR.

 

[ripper1]

Thanks all. Have a lot to think about. But no matter what I decide I feel we are in a good place

 

[Northforker]

CD ladders, I like monthly payouts to leveling interest amount s

 

[Jerry1]

Thanks all. Have a lot to think about. But no matter what I decide I feel we are in a good place

You are in a good place. Same here. What a great place to be. It’s good to know, you’ll be okay either way.

Do you have any heirs to consider?

 

[Al18]

CD interest will come close, but not keep up with inflation over the long term.

 

[Koolau]

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

Agreed. A great year for the markets.

Can you remember 2008?

Not so fun.

 

[marko]

Agreed. A great year for the markets.

Can you remember 2008?

Not so fun.

For me, the only thing 2008 did was to embolden me after seeing the 2009/10 recovery. I'm a lot less fearful of downturns now. In fact not fearful at all.

The 2020 drop had me buying every bargain that I could with impressve results. (I keep "had I done nothing" dual tracking)

 

[tulak]

Everyone always remembers the bad year(s) and they easily forget the good years.

And there are more good years than bad.

 

[ripper1]

You are in a good place. Same here. What a great place to be. It’s good to know, you’ll be okay either way.

Do you have any heirs to consider?

Yes, a son and a daughter who will split.

 

[Car-Guy]

CD interest will come close, but not keep up with inflation over the long term.

Yes, and it easily beats the coffee can option.

Agreed. A great year for the markets.

Can you remember 2008?

Not so fun.

How can we forget. And it will return,,,,,,, someday......

 

[Original Wally]

"We could quit equities but I wouldn’t due to the tax hit on 20+ years of capital gains"

Agreed. THAT is our position. We are at 70/30 Fixed Income / Equities. Molly and I are both 70 1/2.
Trying to evaluate the Capital Gains vs the risk of a 10-20% drop in equities. BUT THEN, if we DID suck up the LTCG we have to deal with FOMO <- What if there IS no drop and the market keep chugging along"?

We too have Pension (CalPERS) and SS, and we run a cash surplus monthly - enough so that we pay vacations and things like Molly's new car out of monthly operations. We don't NEED the growth. But, as a retired CPA I am loath to dump more income - even if LTCG. GRRRRRRRRR.

Paralysis. Sigh. Time for my afternoon nap.

 

[Bikechuck]

If I was dead set on getting out of equities and my expenses were more than covered by SS and pension(s) I would invest half of my portfolio in a rolling TIPS ladder with enough rungs to get me to age 90 and I would invest the rest in Tbills and an intermediate term treasury bond fund such as VFITX.

My wife and I are in our early 70s with two daughters and three granddaughters and we are keeping 50% of our portfolio in equities and the rest in a TIPS ladder, some guaranteed funds and a small amount in a total US bond fund. We could live another 20 years (at least one of us could) so in conjunction with our heirs life expectancies we have decided that we should accept some equity risk in the expectation of some long term growth.

 

[mrfeh]

Don't know why you'd want to go 0% equities. I can understand being conservative, but that seems a step too far...

 

[TheWizard]

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.

Sounds like poor people are starting to take action to ensure their destiny?

 

[calmloki]

Agreed. A great year for the markets.

Can you remember 2008?

Not so fun.

Was that when some members here would post about joining the two comma club?

 

[CardsFan]

For me, the only thing 2008 did was to embolden me after seeing the 2009/10 recovery. I'm a lot less fearful of downturns now. In fact not fearful at all.

The 2020 drop had me buying every bargain that I could with impressve results. (I keep "had I done nothing" dual tracking)

Agreed. A great year for the markets.

Can you remember 2008?

Not so fun.

It's funny. As a 2016 retiree, 2008-2012 was probably a great thing for me. Dropping $50-60k into the market each year, that money tripled (and more) in just a few years. And then, of course, it has all more than tripled since then.

 

[OldShooter]

TIPS

 

[surprising]

It's funny. As a 2016 retiree, 2008-2012 was probably a great thing for me. Dropping $50-60k into the market each year, that money tripled (and more) in just a few years. And then, of course, it has all more than tripled since then.

Sure, this is what we employed people did. However, I wonder how different it would have been if you had retired in 2007?

 

[surprising]

While the market goes up over time, there can be significant periods of little gains. Most recently we had the lost decade in stocks from 2000-2009. Newly retired, it would be detrimental if my 401k goes nowhere in the next 10 years. We've had a crazy few years in the market driven by covid and inflation and AI white swan. The giddy behavior and comments of some people here and in news articles, makes me pretty worried that we're getting close to the top of irrational exuberance.

Add on the agenda for the incoming administration, if they follow through with tariffs everywhere, there will be quite a bit of short term pain.

I usually don't make big changes to my portfolio, I'm not smart. My last change was rebalancing and buying more bond fund right before the 10 year yields skyrocketed. Oops. But I do feel like I need to get more defensive soon.

 

[FREE866]

Yes, a son and a daughter who will split.

If YOUR cash flow needs are met and the money is just for them then the money should be invested based on THEIR investment time horizon. The added kicker is that if they are not getting the money for 10-20 years the probability is that the sum they inherit will be much greater with a higher equity allocation.

 

[Koolau]

Don't know why you'd want to go 0% equities. I can understand being conservative, but that seems a step too far...

Agreed and I'm Mr. Conservative (when investing.) I'm mid 30% in equities - it's crept toward 40% due to results (I need to re-balance.)

 

[RunningBum]

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?

Same here, one of my equity funds has more than doubled, another has nearly quadrupled, so I wouldn't be exiting the market in a hurry. The other equity funds are only about 3% of my overall holdings so selling those off barely matters.