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Help with retirement finally there

Started by retire2151, July 03, 2019, 04:27:24 AM

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Hello FS readers.   I was looking for some advice or opinions on my current situation.

Age: 71
Health: Good
IRA: ~500k 35% stocks / 65% bonds, well balanced managed with financial planner
Annuity IRA: ~250k, cannot lose value, tied to S&P index, averages 3% returns over past 10 years (I know it was probably a bad choice at the time)
Social security income net: 2k (covers mortgage/housing)
Debt: 200k mortgage 3.875%

I need an additional ~2k/month for living expenses ontop of SSI.  I am very risk averse and dont think I need to take much risk anymore.  $750,000 / $2000 = 30+ years.  Tax bracket is pretty low.

I am past the penalty period for the annuity and can turn it on, or take the lump sum.  My financial advisor wants me to roll it over to 35/65 allocation.  Shouldn't I just go conservative and put 75% of my money in something like Treasury Inflation Protected Securities and leave the remainder in the annuity?

I feel a 50% market correction at my age would be catastrophic and I should lock in some of the market gains over the past 10 years, and advice would be greatly appreciated.

Money Ronin

If you've made it to 71, then you could very well make it to 91 or 101.  I can't crunch the numbers based on provided data, but make sure you are investing to cover the next 20 to 30 years.

Risk affects everyone differently.  There  is theoretical risk and there is real risk.  Some people don't like to see their portfolio tank.  It causes them stress and they may even panic sell even though there is no impact to their immediate financial situation.  The risk is theoretical until you need to sell.

Real risk is when you need the money immediately to pay the bills.  If you have enough flexibility in your discretionary spending to weather the ups and downs and you remain physically healthy/mentally sharp, then I would take a riskier, long-term approach to investing.  20 to 30 years is a long time.


 Congratulations for making it to 71!  If the stock market crashes by 50%, which should likely will not, your defense of portfolio will probably only go down about 20%.  Can you live with the 20% decline? If so, you're probably good to go. If not, then you need to do you risk further.

There is absolutely no reason why you need to take excess risk at your age. You got 30 years of expenses covered!