| Advice and opinions on current situation |
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christcorp
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Cash: $ 39.85
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Joined: 05 Mar 2015
Location: Wyoming
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| Advice and opinions on current situation |
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New poster, but a long time lurker. I've come to highly respect the many educated and objective opinions on this forum. As such, I'd really like any opinions on where some might advise me to head with my retirement plans. Either stay on course, change to a direction, change investments, etc. Think you get the idea.
Haven't spent 21 years in the Air Force, not the best paying job, and moving every 3-4 years, I started pretty late in my retirement plans. Started at about age 38 to seriously consider my retirement. So here's where I stand. Any advice would be appreciated. (I know, you get what you pay for). Just looking for perspectives and opinions. Not holding anyone liable for any of my final decisions.
(Combined for my wife and I)
Current age: 53 (Both my wife and I)
Home value: $225,000 No mortgage. 30 yr, paid off in 15 yrs in 2012.
Also, totally debt free. No auto loans. Pay off credit cards in full every month. Combined income for my wife and I is about $120,000 per year. "Gross".
3 IRA's. very diversified 1) Aggressive growth; 2) Moderate growth ($500 per month contribution); 3) Roth International )$500 per month contribution) Current Value combined about $277,000
457b at work. 2025 vangard fund (Current value $75,000. $500 month contribution).
I've come close to maxing my wife's IRA and my ROTH IRA. I can go higher with my 457b.
$75,000 CASH (Misc Bank Accounts)
$15,000 Silver/Gold bullion/coins
My biggest concern is that pretty much all of my investments are in the Market between the 3 IRA's and the 457b. I'm not sure how much confidence I have in the market. I truly expect a correction/crash. Similar or worse than 2008. And with my goal of retiring in 6-7 years, I'm not sure if I can recoup another correction/crash in that few years.
Should I find something other to invest in? If so, what? Should I do more in my 457b and PRAY that there isn't a correction/crash before the next 6-7 years. (I do NOT WANT to work past age 60 other than part time for something to do).
Thanks. Mike.
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Thu Mar 05, 2015 10:54 pm |
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Wino
Senior Member
Cash: $ 113.80
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Joined: 03 Aug 2012
Location: Dubai
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| Re: Advice and opinions on current situation |
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quote:
Originally posted by christcorp
(Combined for my wife and I)
Current age: 53 (Both my wife and I)
Home value: $225,000 No mortgage. 30 yr, paid off in 15 yrs in 2012.
Also, totally debt free. No auto loans. Pay off credit cards in full every month. Combined income for my wife and I is about $120,000 per year. "Gross".
3 IRA's. very diversified 1) Aggressive growth; 2) Moderate growth ($500 per month contribution); 3) Roth International )$500 per month contribution) Current Value combined about $277,000
457b at work. 2025 vangard fund (Current value $75,000. $500 month contribution).
I've come close to maxing my wife's IRA and my ROTH IRA. I can go higher with my 457b.
$75,000 CASH (Misc Bank Accounts)
$15,000 Silver/Gold bullion/coins
Should I find something other to invest in? If so, what? Should I do more in my 457b and PRAY that there isn't a correction/crash before the next 6-7 years. (I do NOT WANT to work past age 60 other than part time for something to do).
You are not doing badly for someone with 10+ years to go until retirement.
The thing to do is to just let the money sit.
As long as you're still actively buying, market "crashes" are actually a good thing. The markets don't stay crashed, at least they never have so far, and there's no reason to think they'll stay crashed in the future. It comes down to the adage, "Buy low. Sell high." The difference is, you don't "sell" until you're in retirement, and at that point, you're fairly well forced to sell at whatever the current market value is. In other words, you cannot control the "Sell High" part, so your only way to win is to "buy low." That means, as I said, market crashes are a GOOD thing while you're still actively investing.
The point about retirement investing is: Never stop buying shares and don't try to jump in and out; just let your money work for you, whatever the market does.
Your asset allocation appears to be OK, but I'd drop the bullion. Rocks don't pay dividends and rocks don't invent the next mousetrap, iphone, or social network. Basically, they're worth what someone else will pay for them, and nothing more. There is no basis for their value, other than hysteria. I'd rather own $15K of Exxon or S&P500 than the equivalent in bullion. When was the last time you saw someone buy groceries with a Krugerand?
I hope you're in Vanguard or Fidelity. They're both good houses with very low fees on their index funds. I'm split S&P500, International Stocks, and Total stock market. I'm older than you, and even MORE exposed to the "crash."
You might want to look into rental property for more diversification. If inflation hits, rents will go up along with everything else, so real estate is a good hedge for inflation.
Along with your AF retirement, you probably need about $1M for a very comfortable retirement. A quick future value calculation in Excel tells me that if you put $3K per month for ten years into something that makes 8% per annum, you'll have about $1.15M. The eight percent is a fairly conservative level, so you should easily make that. I'd just open a Vanguard brokerage account and put $3K per month into VFIAX (S&P500 Admiralty fund; VFINX until you hit $10K, which can then be converted to VFIAX). The commission is 0.17% until 10K, then 0.05% after $10K.
At $120K per annum with non debt, $3K should be easily available, and you still have at least $4K left over for bills and fun. If you can do $5K per month, even better.
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Fri Mar 06, 2015 2:32 am |
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oldguy
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quote:
and the house is worth $50k but like I said, we can't find buyers.
With about $350k in stocks and $100k in cash, along with a paid-for house, I would keep investing with the same allocation that you now have. Here's why - say that we have another 2008 crash - the market recovered within just a few years, and was at an new all-time high by 2014. And it wouldn't matter whether you were retired or working.
I've been retired since 1998, I stayed invested - the 2008 dip fixed itself and we have more money now than ever. And I'm glad I didn't sell in 2008.
In my working years I focused on my retirement goal. But I was surprised AFTER retirement, the retirement accounts kept doubling every 8 or 9 years (Rule of 72) even tho I wasn't adding to them anymore. 
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Fri Mar 06, 2015 3:15 am |
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christcorp
Preferred Member
Cash: $ 39.85
Posts: 199
Joined: 05 Mar 2015
Location: Wyoming
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Thanks for the feedback. I definitely wasn't going to stop investing as I'm doing now. I was just curious if I should invest more. And if so, should it be by doing MORE in my 457b at work, or a different investment to diversify more. Like I mentioned, I don't have the most confidence in a sustained stock market. But I definitely wouldn't stop existing monthly investments or cash anything out. Just looking to do a little more.
As for how much time I have to retire, I have no intention of waiting 10+ years to retire. I am 53 currently, and have every intention of retiring from my current job in 7 years and start collecting my pension from them. I may still work, but it will be more for "Something to do" and not necessarily for "Need of money".
As for the silver and gold, I have bought and sold silver and gold for more than 30 years. I use it as a hedge and as an "Insurance" policy to preserve buying power. It has served me well. It may not gain interest, but it also doesn't lose value. Considering all the manipulation in the price against silver and gold, it always holds it's value. But that's a separate issue. I'll never stop owning silver and gold. But as you can see, I'm not investing a large part of my retirement into it. Less than 5%. Again, it's a hedge or insurance to get through a short period of time.
Anyway; thanks for the inputs. My biggest concern was in the remaining 7 years before I retire at 60 yrs old, if there was "ANOTHER" area that i could diversify into with some extra funds or if I should increase my 457b monthly contributions. I have real estate (Besides my home); just a few acres of vacant land. I'm not into "Rentals". I don't want or need the headaches of renters, repairs, etc... But that's definitely a good suggestion. Probably just not my cup of tea.
So I guess I'll probably do the following:
1. Increase my monthly contribution to my 457b
2. Continue to buy small amounts of silver/gold periodically
3. Continue to look for OTHER INVESTMENTS. (This is the one I'm most interested in). I'm sure besides the market where all mutual funds, stocks, bonds, etc. are in, there's something else to invest in. Maybe not "Fine Art", but there's got to be something.
Thanks again. I appreciate it. Mike.
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Fri Mar 06, 2015 3:32 pm |
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