Retirement Income

[Jim at Gentex]

I think most of you know I will be retiring in March after 34 years with my present employer, and a total of 50 years in the workforce.

My current employer offered a 401k plan years ago and I got in.
Now that I am ready to retire, I am looking at restructuring my portfolio for a long-run, low-risk strategy.

I found this article interesting and was wondering what you guys think about it.

https://www.msn.com/en-us/money/savingandinvesting/warren-buffett-s-ideal-investment-strategy-the-2-fund-portfolio/ar-AA1flW0W?ocid=entnewsntp&pc=U531&cvid=0b1191310d8544ffa79fd1c6722693e6&ei=110

Seems simple and straight to the point but I could be missing something.

[JParis]

So much depends on your personal situation...

My recommendation, talk to a financial planner that is a fiduciary.

JM2C

[Del.]

Personally we just put all our money in CD's and Money Markets. Only gets around 5% but I won't lose any and whatever the market does is irrelevant to us. That's just me though.

[pmartin]

I always toy with the idea of investing in the stock market but frankly, I'm just not that guy. You know, the guy who does the deep dive into researching what makes a sound investment and then checking the market frequently enough to avert a financial meltdown. Instead I invest in distressed properties. I know what I'm doing in that arena and have always made good money on flips. Ain't sweat equity great! In fact we just set a closing date on flip #7, and me at 68 and retired. I'd say wish me luck but I don't need it. 

[Jim at Gentex]

Thanks for the great feedback, guys.
It's really helpful.

[Jim at Gentex]

Personally we just put all our money in CD's and Money Markets. Only gets around 5% but I won't lose any and whatever the market does is irrelevant to us. That's just me though.

Did you do a rollover from a 401K?

[Del.]

Did you do a rollover from a 401K?

Yes. I had to report that on my income tax this year but it didn't add any tax. We also take the interest each month to help with bills, but our principal stays the same. I'll be stopping that soon and just reinvest it.

[mkd]

Good subject for us longtime eMCers. Since wuhan flu season I've been doing a deep dive on the subject. Probably to a fault. Not consistently saving and not managing 401Ks from old emmployers set me back significantly. Calling it a freak out moment to get my house in order and consoled everything in one brokerage.

Here is some decent reading.
https://www.paulmerriman.com/merriman-financial-education-foundation-lifetime-investment-calculator#gsc.tab=0
 He is a big fan of small cap value. I'm buying small bits of AVUV to that end, weekly. DCA (dollar cost averaging).

I'm not stupid enough to argue against the oracle from Omaha's 90/10 advice. Most financial planner types will, however. They'll mostly argue stock bond ratios ranging from 70/30 to 30/70.
 The 1994 paper founding the 4% rule by bill bengin (Sic) is based on a 60/40 stock bond allocation or a 50/50.. don't quite remember which atm.
 The main point of such high bond allocation is sequence of returns risk early in retirement. Bonds don't typically go down in lock step with equities (except for 2022) so you can pull living expenses from the bond side while stocks are down. Makes sense.
 Bonds , in my opinion, are return free risk. They barely keep up with inflation during periods of low inflation not to mention periods of high inflation.
 So there are good ways to deal with temporary market down turns by pulling from bonds. The real killer is long periods of high inflation. This where you get a part time job or cut your expenses.
 It sounds like the majority of your savings are in a tax advantaged 401k which means every penny you withdraw will be taxed as regular income. Also around 74 years old you'll be faced with RMDs. This brings up the subject of Roth conversions. Pay the tax now to get tax free growth into the future while at the same time reducing the amount of RMDs.. the more time you have to let the Roth account grow the more this method makes sense. It may not make sense if you plan to leave funds to children as they will get a step up in cost basis on funds in a 401k.

 My portfolio focus is in a core satellite approach.  Core being even distribution in VOO, SCHD and QQQ with smaller allocations in VYMI and AVUV and others.
Edit actually I have 25% in money market from proceeds of selling California house. Those funds are are automatically buying equities every week with fidelity brokerage. Really liking that brokerage for that reason.
 Anyhow, plan is to draw down the Money Market funds to a Warren Buffet style 10% as they will most likely get slaughtered to inflation over time.
 

[mkd]

I always toy with the idea of investing in the stock market but frankly, I'm just not that guy. You know, the guy who does the deep dive into researching what makes a sound investment and then checking the market frequently enough to avert a financial meltdown. Instead I invest in distressed properties. I know what I'm doing in that arena and have always made good money on flips. Ain't sweat equity great! In fact we just set a closing date on flip #7, and me at 68 and retired. I'd say wish me luck but I don't need it. 

Congrats on being a flipping success. Always wanted to do that.
All you need to know for stock market returns is VTI and chill.

[mkd]

So what is everyone's retirement number?
Age or dollar value saved?
 This should go over like a fart in church 😁

[Del.]

So what is everyone's retirement number?
Age or dollar value saved?
 This should go over like a fart in church 😁

Both based on how long you think you have left.

[mkd]

The 4% rule or Dave Ramsey's 8% rule?
 

[Newbeeee™]

If i was still living in the UK we'd be flipping houses.
Easy money and "allowed" to do it.
Spain....you can only do it tax free if you live in the place for 3+years. They make it not worth it.
And they're now talking of restricting 2nd homes on people.
Hopefully Cyprus will be way different, if we can get there....
Apart from that. Homes rented out and living off the income.
PITA when things go wrong every month and managing agent takes more cut.
Overall it works ok for us.

[Shazam/TPP]

So Jim what did/are you going to do with the 401k? Find a financial advisor or??

[Elmer Fudd]

Could leave it where it is.