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RE: Retirees - Decision to Retire
"Americans that have lost money in their investments in the last six months and fear losing more in the next year," need to allocate out of their volatile investments to fixed-income investments. There are several allocation models out there with little or no risk, with a good return over time. It seems everyone has a high-tollerance for risk, until their aggressive growth allocation balances decline in a bear market. Then it's usually too late to bail-out and re-balance them. The best fixed-income allocations have kept up with many growth allocations over time without the massive dips. For these reasons it is very advisable to seek out fixed-income portfolio safety before balances decline, since declines will always happen.
Both advisers we've gone to suggest that we keep a 60/40 (equities/fixed income) balance, at least at this point, where we're within about three years of retirement. Does that sound reasonable?
We did laugh about your statement that everyone has a high tolerance for risk until they watch their balances decline in a bear market. Yup, that's when we realized how risk-intolerant we are! We haven't pulled out of anything, because we know now is not the best time, but we are asking the advisers to build our need to be able to sleep at night into their recommendations for us.
Where can we start looking into some of these "allocation models...with little or no risk, with a good return over time"?
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C&J
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08/02/08 03:19pm |
Full-time RVing
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RE: Retirees - Decision to Retire
I'm wondering what the "8% increase in your portfolio" means? If it means that you are expecting to withdraw 8% of your nest egg per year in retirement, I would be nervous about doing that. If, on the other hand it means that you are planning on withdrawing say 4% to 5% per year in retirement, as many financial advisors suggest, then I would be completely comfortable with that plan. Myself, I plan on the figure of 4% maximum withdrawal per year. How much of a nest egg is enough? That's up to each of us to determine ourselves.
Oh, no,we're figuring 4% withdrawal! The "8% increase" meant that our planners came to their conclusions based on an average 8% annual growth in our investments.
At your age of 60, I would think you may be considering collecting SS early, instead of waiting to 65. With a spouse of 51, you may or may not want to bail out, depending on if your spouse is working or not.
The current plan has us each drawing at our own age of 66.
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C&J
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08/02/08 03:07pm |
Full-time RVing
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RE: Retirees - Decision to Retire
Hope it doesn't seem like we've hijacked this thread from Steve, the OP. It's just that he asked how people made the financial decision to retire, and that's what we're trying to figure out, too, so we wanted to join in the conversation.
C&J, you will never be able to "know". Honest. I'm not trying to be annoying here...and I know you know you can't know, but sometimes, seeing it in print (or from someone else) helps.
You're not being annoying, and yeah, you're right, we do know. That's what we liked about this thread is that it's written by others who are, or have been, in the same boat as we are, would know exactly what we mean and remind us of what we know.
If it doesn't feel right, at this time, then it isn't right at this time. If it scares you more than it makes you feel good, then don't do it.
But really, don't do something that is too scary - if it feels like a dream...do it...if it feels like a nightmare...don't. Only you can know and research your situation and crunch the numbers as you need them crunched.
Actually it does feel like it will be a dream. What we're afraid of, though is what if we act on the dream and it turns into a nightmare when we either run out of money or just have to cut back so much that we can't do the things we enjoy!
C&J:
1. How far are you from being able to draw social security?
2. Can you live on Social Security? Many people do.
3. When can you start drawing a monthly annuity from your investmests?
4. Will social security and investment income meet all of your monthly needs?
5. Do you have private health insurance and are you eligible for medicare?
6. What does your financial planner mean by "stay the course"? Keep working or keep investing and not drawing.
Is the investment savings to supplement your monthly income or a nest egg?
C is 60, J is 51.
Social Security might be enough to meet some of our day to day needs, but definitely wouldn't be enough for us to travel as much or be as comfortable as we'd like.
We won't have health insurance, so have included that in our budgeting.
The financial planner told us that we had reached our retirement goal, but that as long as we were continuing to work we should continue to invest. And we have continued to work, and invest -- and now, as I mentioned in my first post, we're 8% down (all investments and retirement funds combined) for the year, which already puts us 16% behind our target for the year, and we haven't even started drawing! We haven't gone for a reevaluation by the adviser, but we're pretty sure that with these numbers he'd no longer say "congratulations, you've reached your retirement goal."
C&J:
Probably most Americans have lost money in their investments in the last six months and fear losing more in the next year. There just aren’t any sure fire answers.
Yeah, that's the crux of the problem. There are no sure fire answers. If only there were!
Somebody on here said if he went ahead and retired too early at least he'd having great memories when he's in the soup line. I know that person was joking, but, well, it wouldn't be funny if that's where he ends up, and if working just six more months or one more year would make the difference, then it would be worth it.
The thing is that we're in our highest earning positions right now -- if five or 10 years from now we would decide we need more money, of course we'd go back to work to supplement our need to, but of course we'd have to work much longer and harder to make the same amount that we could by just extending a little while longer before retiring. So what we really want to do is what steveolds was talking about, try to figure out when enough is enough, and not quit until we've achieved that.
And of course there are so many unknowns. Our financial planner has us living to 94. We could live to 64 -- or we could live to 104. If 64, we'd have plenty of money, if 104 not so much.
We're at the place right now where we really, really want to make the change, but we don't want to make it prematurely. We're not in careers where we can just give two weeks notice and be off, so, in addition to the unknown of how much we're going to need, and for how long, we also have to predict many months in advance what the market might look like months from now, before we announce our intention of leaving. And of course right now all signs say "down, down, down."
Looking for the sign...
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C&J
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07/17/08 10:12pm |
Full-time RVing
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RE: Retirees - Decision to Retire
I'm reading this thread with interest because we're trying to figure out when we might retire as well. Neither of us has a pension, so we'll be relying on 401(k)s and investments, and of course Social Security.
We thought we were making some good progress and could see the light at the end of the tunnel at the end of 2007 (granted, it was still a fairly long tunnel, with no immediate plans for retirement), but have watched as our net worth has declined by more than 8% just since the beginning of this year. And these losses despite the fact that we are very diversified, and our investments aren't risky. Since our retirement planning was depending on an 8% increase in our portfolio each year to bring us out to age 94, an 8% decrease puts us 16% behind already -- and we haven't even retired!
Emotionally we're moved by the stories people tell of illnesses, early death, all the reasons why people say they decided to retire early, and those stories motivate us to want to retire early, too. But the flip side of that is the possibility that we could live well into our 90s, and how awful it would be if we were to run out of money before we run out of living.
Our financial adviser tells us to stay the course, keep dollar cost averaging. That seems to make perfect sense when someone is 20 or 30 years away from retirement, but as we're coming into the home stretch it's a little more scary. It's like we're pouring money into a bucket with a giant hole in the bottom and it's going out as fast as, if not faster than, we're putting it in.
I guess for us the biggest question is how will we know when we have enough? How much will make us feel safe that we've planned well? For some people it seems to be a dollar value, for some people it seems to be a percentage of their working income. I don't know what it will be for us.
All I know is that if we'd retired at the end of 2007, we would be sitting here today watching our value decline, and we'd really be facing the fear that we really might run out of money before we run out of living. And that makes us wonder, how will we know the time is right at the end of 2008, or 2009, or 2010?
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C&J
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07/14/08 08:24pm |
Full-time RVing
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RE: Should I buy a George Foreman?
I have never seen a GF5 in person, so I don't know if it has more grill area than the Cuisinart. Grease runs off the Cuisinart fine but we mosltly cook lean chicken and pork loin steaks on ours. We never make waffles so waffle iron inserts don't matter to me. The Cuisinart does make nice dark brown sear marks on chicken breasts and pork loins. The three most important features to me that the Cuisinart had was heating elements on the top and bottom and the top isn't hinged in the back but has a swing side hinge so you can put thick paninis' in it and the top always stays parallel to the bottom. THe third is adjustable thermostat. They didn't make the GF5 when we bought the Cuisinart a few years ago but it looks interesting.
Thanks Big Katuna! Love to hear from Foreman owners (esp. any G5 people) now -- does yours make the nice dark brown sear marks?
I think the marketing says that while the G5 has a hinged top, it has some kind of adjustment so you can grill thicker things. Any of you G5 people find things that you can'tcan't cook in it because of the hinge?
And what about that adjustable thermostat? I went to the link Cruzette posted, and on that page was a link to the G5 manual. It looks like it has three settings, low, medium, and high. Does anybody know if it's infinitely adjustable, or is it either low, medium, or high, and nothing in between?
Thanks again,
Jacky
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C&J
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07/05/08 03:37pm |
Camp Cooks and Connoisseurs
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RE: Should I buy a George Foreman?
Does the grill (Foreman or Cuisinart) get hot enough? I like a little char on my food, whether it's on the barbecue grill or under the broiler in my kitchen oven. Does the grill get hot enough to do that?
emurphy and Big Katuna, you mentioned the Cuisinart Grill. How does it compare in size to the G5?
I looked online, and it doesn't look like the Cuisinart has the waffle plate, etc. I'm considering getting an electric grill, and I don't have a waffle iron so I thought that would make it a multi-purpose machine.
Does the Cuisinart tip, the way the Foreman grill does, to allow the fat to run off?
Thanks,
Jacky
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C&J
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07/04/08 08:39pm |
Camp Cooks and Connoisseurs
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Ford E-450 Seat question
The armrest on the passenger seat in our 2002 Coachmen Catalina Sport 28QB has come loose. It won't stay in the extended position--just flops to the floor. It is the standard Ford seat.
We were wondering where would be the best place to get it repaired--a Ford dealer, an RV dealer or an auto upholstery shop? Or is there an easy repair we could do ourselves?
If anyone has any experince with this problem, we'd love to hear about it.
Chris
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C&J
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05/18/08 09:00pm |
Class C Motorhomes
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