FREE NEWSLETTER
Go to main Forum page »
Prices are not coming down, inflation is rising, mortgage rates are rising, the stock market is near bear territory.
Given all the planning and various strategies that have been discussed on HD, do those retired have any concerns about weathering this storm?
How about those within a few years of retirement? Anything happening that may change your plans.
No qualms at this point, let’s check back in a few months.
Economic chaos is transitory, and I tend not to be concerned about it, but there’s a tiny bit of stress this time because the sudden demise of my lead client is about to put a big dent in my income — and finding new clients at 70 in this environment may be a tad challenging.
But I’m not losing sleep.
Hey Dick,
You stated that, “the stock market is near bear territory.”
What market are you referring to?
These are the results of what I consider the best indicators of both the broad US and international markets as of today’s close:
Morningstar US Index down 8%
FTSE All World Ex US down 10%
The second has just reached correction territory.
WSJ today. “But an intensifying rout in recent days pulled the S&P 500 down for a fifth straight week to its lowest levels since August and dragged the Dow Jones Industrial Average and Nasdaq composite into correction—off more than 10% from their recent highs.” Yikes
I should have said nearing, but what I read says there are many warning signs of heading to that territory.
I’m retiring within the next two years. I haven’t changed anything. According to Boldin, even a ten-year downturn would not affect us at this point.
Based on a decade of poor returns your Chance of Success could be 99%
Start of downturn: Feb 2028 (latest retirement date)
Annual returns during downturn: 1% / y
Downturn duration: 10 years
No concerns on our end either. We have a ten-year bond ladder running alongside a ten-year term annuity, and together they cover all our spending needs. When I set both up, I built in a 30% margin to account for inflation over that period, so right now we’re actually spending less than they generate and banking the difference for later years.
My view is that anyone in retirement should have fixed income, or some form of cash equivalent, sufficient to last at least five years — without ever needing to touch their equities.
I’m not concerned for us, Dick. We have a CD ladder capable of providing ten years worth of spending. Our investment allocation is near 50/50, and I have no qualms with becoming more aggressive should the bear arrive.
I feel for young families that lack our comfortable cushion.