How often do you reevaluate your retirement?

[corn18]

Got it. I've always used 6% conservatively without inflation. It just seemed reasonable. I've been a 85/15 mix and I'm 40 now. And i've been more aggressive and even now I would say I border on more aggressive with risky plays within the stocks. I am not close to retirement about 15 years and even then I think we are closer to 20 year until withdrawal. I see us retiring at 55 but using taxable accounts to fund those first 5 years. So I feel we will stay aggressive until we retire and then downshift at that time. Mostly because I think my DH is more likely to want to work than to retire when our investments are down.

Corn and DS, when do you feel you made the transition to a more conservative investment strategy?

I decided on 60/40 in 2015 not long after I found this site and then bogleheads and figured out how to save and invest. I picked 60/40 based on my tolerance for risk. At the time, I didn't know when I would retire because we had little to no savings. As I have approached retirement, I have thought about letting that drift to 50/50, but haven't pulled the trigger yet. I could be way more aggressive considering I have a COLA pension right now, but I don't think I will.

I don't think you have to change your AA as you approach retirement. But you should think about it. The best AA for growth is 90/10 (not 100/0). But you better have nerves of steel to watch 50% of your savings disappear. And a big enough nest egg to survive for 2-5 years as the market recovers. If you can handle that and stay invested, then that works as well as 60/40 or 30/70. Most people can't and the bond allocation can serve you well to mitigate and ride out the downturn. Bottom line: don't follow a rule of thumb. Follow what your tolerance and need for risk are.

[disneysteve]

Corn and DS, when do you feel you made the transition to a more conservative investment strategy?

I started reducing the aggressiveness of our portfolio about 2 years ago. While not really market-timing, I was certainly conscious of the fact that the bull market was getting old and we were getting older too. Our tolerance for riding out a major downturn was lessening.

On top of that, our portfolio was reaching a point where it could still grow nicely to reach our goal without needing to be as aggressive or take as much risk. We currently have $1.3 million. My goal is about $2.1 million or so. We are currently saving about $100,000/year. So even if we put the whole $1.3 mil under our mattress, if we add 100K/year for the next 8 years, we'd reach our goal. With modest growth, we'll be there sooner. But with a big loss of 40-50%, that would impact the plan so I wanted to lessen that risk.

[kork13]

Right now I mainly do maintenance on the accounts:
1. Making sure our asset allocations are within +/- 5% of our target

I suppose once you retire & start withdrawing from your accounts, this can actually be done in the reverse of how many folks manage AA in the accumulation/growth phase of life....? Instead of adding new money into the AA areas that are running low to bring your AA back to balance without doing any selling, you can instead pull out money from the areas that are running high. In both cases, it gets you on the right side of the "buy low/sell high" dynamic, while keeping your AA in check. I've never really thought of it from the withdrawal perspective, but it makes sense. (Random thought, just figured to share)

[LivingAlmostLarge]

For DH and I, it's showtime! (I am already retired and DH is retiring in a couple of months). We have a 55% equities/45% bonds allocation. I use 4% for returns.
We will be pulling from our retirement accounts later on this year. It is a little intimidating to think about the draw down--all those years of the mindset of not touching retirement accounts. Now, it's okay.

Right now I mainly do maintenance on the accounts:
1. Making sure our asset allocations are within +/- 5% of our target
2. Making sure DH's 401k contributions post in a timely fashion
3. Doing a little preparatory work on where the money will come from starting later on this year (CD ladder)
4. Tracking income against the Roth conversion plan
5. Keeping up with tax changes and making sure enough taxes are withheld

Do you have a pension? Are you fully self-funding your retirement?

Corn has pension/military

DS do you have any sort of pension or are you fully self funding? I'm curious if it changes your attitude and investment strategy and obviously even amount saved depending if you have a pension or medical or not.

[LivingAlmostLarge]

I'm also going to add I'm pretty aggressive. I see myself staying 90/10 or 85/15 until the very end. Mostly because our risk tolerance high (iron cast) and because we're playing with obese fire now. Like steve if we cruise at the pace we're at we would need no returns to retire at 50. So even a big downtown I think we could ride out until 55. DH would probably justify working longer if it did downturn.

I find it interesting that many people who do save a lot sometimes work because they want to, not because they have to. It brings immense pleasure.

[Like2Plan]

I suppose once you retire & start withdrawing from your accounts, this can actually be done in the reverse of how many folks manage AA in the accumulation/growth phase of life....? Instead of adding new money into the AA areas that are running low to bring your AA back to balance without doing any selling, you can instead pull out money from the areas that are running high. In both cases, it gets you on the right side of the "buy low/sell high" dynamic, while keeping your AA in check. I've never really thought of it from the withdrawal perspective, but it makes sense. (Random thought, just figured to share)

Yes--I will have to see how that actually plays out. I'm sure there will some tweaking that needs to be done.

[LivingAlmostLarge]

Also living off of dividends. Versus just pulling out cash from stocks. Do you have a pension?

[Like2Plan]

Do you have a pension? Are you fully self-funding your retirement?

Corn has pension/military

Yes-that does take care of a lot of the heavy lifting for us. But, it has never really made me feel like taking a lot of risk with the asset allocation.

[Like2Plan]

Also living off of dividends. Versus just pulling out cash from stocks. Do you have a pension?

We have a lot of "headwind" with most of our retirement funds being in pretax (index funds) taxed as ordinary income. Uncle Sam will get a cut on most of our funding sources. So, that is why we are focused on conversions to Roth.

[LivingAlmostLarge]

Is the plan to not use any retirement money and then covert everything to Roth?

[Like2Plan]

Is the plan to not use any retirement money and then covert everything to Roth?

It will be a little bit of both. We will convert up to the top of our tax bracket. Some of our retirement spending allocation will come from there, too. Pension covers necessities, retirement account covers niceties.

[disneysteve]

DS do you have any sort of pension or are you fully self funding?

I've got nothing. Totally self-funding other than SS.