Thanks everyone. Seems there is no real black and white here...
First a couple responses. I'm not a particularly risk averse guy. I have made some investments in real estate that have paid off well. The money I'm getting in a few months will be from the sale of the last one, not an inheritance.
I will probably stick with just investing and pay down the mortgage as I go for now. As with the snowball principle, who doesn't like to feel an accomplishment? I'll just have to wait another 13 years.
Last question though, that 11% number is nice but it seems high to use for simple calculations. At what point in time, relative to retirement, should I consider shifting some of that money out of the index and into lower risk investments? Is there estimated returns you use for calculating that?
Oh and I see some cash amount next to my profile name. How can collect? I'd prefer that in large untraceable coins if you don't mind. lol
Fri Feb 05, 2016 7:57 pm
oldguy Senior Member
Cash: $ 715.00
Joined: 21 May 2006
quote: Last question though, that 11% number is nice but it seems high to use for simple calculations. At what point in time, relative to retirement, should I consider shifting some of that money out of the index and into lower risk investments? Is there estimated returns you use for calculating that?
I think the wealth-building years last to 55 or 65 - then you need to move toward wealth-preservation. The shift point depends somewhat on successful you were, if you have multi-millions you might start preserving/protecting earlier. Or, if you have only $100,000 at age 55, you would want to keep building a few more years.
During your wealth preservation years, you still need some inflation protection, if you live to be 95, you might face 30 or 40 yrs of inflation. I avoided calculating goals based on running out of money at X years - I wanted the money to last in-perpetuity. So I needed to base our needs on not touching the principal.
A couple reasons - one, a legacy to our kids & our grandkids. Two, selfish - ie, if you live the last couple decades of your life as "a wealthy person" I suspect that watching that legacy dwindle to zero as you sit in Assisted Living would be depressing.
I'm 76, I use an allocation of 50%/50%. 11% & 3%, ie a goal of 7%/yr.