I admire your tenacity to continue sharing your perspectives even while battling your health issues. Keep it up as your posts become a massive treasure trove for generations to come.
As always, terrific insights. I suggest people start with the the large picture - a bucket approach, with a portion of assets devoted to cash and equivalents (usually 2-3 years of base expenses), a portion to low/moderate risk (short term-intermendiate bonds, fixed annuities, etc.) to cover an additional 3-5 years of base expenses, and the remaining portion to growth (take your pick, but I choose dividend growth stocks to growth of the income stream, plus moderate capital appreciation). I sweep monthly interest and dividend income into my checking account to create the cash flow I need. The percent representing each “portion” or bucket depends upon your base expenses - how much you need to devote to each bucket to cover the base expenses as outlined above, but 1/3rd in each bucket is a good place to start. A combination of annuities, delaying social security, and growth of dividend income over the years serves as my insurance for longevity risk - and I have some to consider since my parents achieved life into their late 90’s (and my Mom is doing well while approaching age 99 in May!). Let’s not forget the other side of the equation though - expenses. Begin “retirement” with a well understood base of expenses, and keep an eagle eye as the years go on. Expect a few large unplanned expenses to pop up, but with the bucket approach you should be able to manage it well. Finally, begin your portfolio repositioning before you anticipate stepping away from full time employment - I suggest five years. Derisk your portfolio during that time so that upon your retirement you have eliminated the “sequence of returns risk” - in other words, the market crashes the day of your retirement.
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I admire your tenacity to continue sharing your perspectives even while battling your health issues. Keep it up as your posts become a massive treasure trove for generations to come.
Post: Advice for the Kids
Link to comment from November 9, 2024
As always, terrific insights. I suggest people start with the the large picture - a bucket approach, with a portion of assets devoted to cash and equivalents (usually 2-3 years of base expenses), a portion to low/moderate risk (short term-intermendiate bonds, fixed annuities, etc.) to cover an additional 3-5 years of base expenses, and the remaining portion to growth (take your pick, but I choose dividend growth stocks to growth of the income stream, plus moderate capital appreciation). I sweep monthly interest and dividend income into my checking account to create the cash flow I need. The percent representing each “portion” or bucket depends upon your base expenses - how much you need to devote to each bucket to cover the base expenses as outlined above, but 1/3rd in each bucket is a good place to start. A combination of annuities, delaying social security, and growth of dividend income over the years serves as my insurance for longevity risk - and I have some to consider since my parents achieved life into their late 90’s (and my Mom is doing well while approaching age 99 in May!). Let’s not forget the other side of the equation though - expenses. Begin “retirement” with a well understood base of expenses, and keep an eagle eye as the years go on. Expect a few large unplanned expenses to pop up, but with the bucket approach you should be able to manage it well. Finally, begin your portfolio repositioning before you anticipate stepping away from full time employment - I suggest five years. Derisk your portfolio during that time so that upon your retirement you have eliminated the “sequence of returns risk” - in other words, the market crashes the day of your retirement.
Post: Comfort Has a Cost
Link to comment from March 2, 2024