I think I’m done 2
…The author says he’s 65, qnd hopes to retire in 2 years.
I retired at 60…having a large family and one income kept it from occurring earlier, but my life’s calling wasn’t Early Retirement. However, dealing with all the work stuff we know so well did have FI & ER set as a secondary goal.
Prior to pulling the trigger, I gradually moved from >90% stocks to more like 65/35, where the 35% was less risky assets and the 65% was stocks but included less volatile indexes (like Consumer Staples). A couple points:
-Your plan really needs to include the possibility of a market crash.
-Appropriate asset allocation is an “It Depends” thing: If you’re 25, even at a 50% loss, you haven’t loss much money compared to the salary you’re going to earn over the next several decades. If you’re 65 hoping to retire in two years, you really should have a significant amount of money in things other than stocks.
-By having a lower amount of stocks in 2017-2021 (before I retired and just as I did), I missed out on a lot of gain, which bugged me, but the chance of having the rug pulled out from under me was a worse risk. So, you might say that I was managing risk and not return.
-I remember discussing our large losses with my wife during the 2000 and 2008 crashes. She noted that the money was already lost, and it didn’t make sense to sell to lock in the losses and potentially miss the subsequent rally. So, we held on and bought more shares during the malaise period, essentially buying those shares “on sale.”
-Everybody sees these crashes in retrospect and imagines that they understand how straightforward it is to buy when prices are low and enjoy the following runup. Yet, at the time, it can be pretty freakin’ scary.
