Hi all, new to this forum but lurker for a bit (and a lot in Bogleheads). I'm struggling with how to place my funds given that i'm FIRE and in my late 30s.
Some important notes:
* Taxable makes up 88% of my liquid assets, tax-advantaged the rest
* I have enough liquid assets to support a 3% withdrawal rate to sustain our yearly expenses
* FIRECalc says that at a 60 year time horizon, my amount of spending would have 0 cycles of failure.
* My taxable account is about 30% muni bond funds, 20% treasuries, and the rest in equities.
So, the two thoughts I have in conflict are:
"Don't play the game if you've already won" VERSUS "I'm young have a long investment horizon and so it's worth the risk of investing more heavily in stocks".
I'm not really sure which one should win out. My current AA supports the latter, but I'm wondering if I'm doing myself a disservice by being too heavily into munis and bonds in general.
Curious how others feel about this?
If you ever decide to hold 100% (or >70%) equity then do it slowly over the years (like 5-10 years). This will minimize SORR risk. Google "equity glidepath".
Following in particular talks about equity glide path with long duration: https://earlyretirementnow.com/2017...e-withdrawal-rates-part-19-equity-glidepaths/
Yes, I remember reading about it. Thanks for clarifying. If that is what you are going then a large portion of the rest of the portfolio should be in stock in order for it to work.I'll just be doing the simpler 'never-refilled' cash bucket per the link below.
"So, for the record, let me state that this cash bucket strategy seems to work pretty well, despite my previous doubts!
It’s relatively inexpensive insurance against Sequence Risk!
Think of it as a mini-glidepath during the first few years of retirement!
And it 'only' takes the flexibility of getting to 27.5x instead of 25x annual spending!"
Cash bucket
For me its hard to relax if I am invested in things with risk. So I don't.
Just my 2. Sleep like a rock. I cant really enjoy life if I am worried about investments'.
Politics, market swings, world problems etc. Just dont need the drama.
Just my nature, probably not for everyone. Was in the market about 30 years.
So much happier being out.
This is what makes it such a personal choice. I hope to be retired for 40 more years. I have a <3% WR and am at 80% equities. I don't see myself ever going below 70% equities. I no longer work, but my money can keep working for me.
Once again, welcome aboard. A couple of comments.
FIRECalc is an excellent tool, but no one and no tool can look ahead 60 years and expect a reasonable forecast. So much will happen over that period that cannot be foreseen, and how you react to those unexpected events matters as well.
Congratulations on your financial achievements. You’ve reached a point where you can take some risk, and you should, and the 33% in short term reserves is a good source of funds for that.
As you think about how to invest your money, don’t forget to invest in yourself.
I like that book too. At one point Rick indicated that he was working on a revision but that hasn't come out yet. I think he said that back in 2019 or so - so perhaps a revision is no longer in the works.Back in 2005 I was trying to figure out a good retirement asset allocation (for me). I found Rick Ferri's book, "All about Asset Allocation" helped me to think through it. Here's the link to that book: