Retirement - Looking for advice

[sawdust]

Sawdust
...If low fees and conservative, balanced portfolio is the goal, why wouldn't one of the Vanguard Target Funds do the same thing at .21% fees?....

IMHO, there is nothing wrong with Vanguard's Target Funds; they are the ultimate "hands-off" style of investing. Those types of funds provide diversification in that the Target fund is comprised of domestic equity funds, bond funds, international funds, and maybe a few others tossed in. Vanguard determines the ratios of these funds according to their own algorithms based on where you are in their "age-curve". The tendency is that Vanguard will slowly increase your percentage of bond fund holdings over time.

FWIW, I do use Vanguard, and I started with the "Couch Potato" approach but have modified it over the years to suit my own purposes. I tend to be more aggressive in that I carry a higher percentage of equity funds than is normally suggested (approx. 70/30). Having said that, I still consider myself a buy-and-hold type. The long-held general rule has been that equities and bond values tend to act in opposite directions. i.e. the factors that tend to increase equity values tend to decrease bond values, and vice-versa. However, the events of the past decade or so have shown this not to be an absolute rule, in that everything lost value for a time before bouncing back.

Also, depending on several factors (and there can be dozens of them), you may wish to transfer your 401k to an IRA. Be careful how you do it. Done incorrectly and you could face premature tax consequences.

19 pages to go.

[Rex B]

Actually, that was my first thought... I take it you voted for the "right" guy?

I did, but he lost. Apparently he wasn't "right" enough

[rotor]

My only argument would be going for SS at 62. If you have a long lifespan ( we all hope) you will really be short changing yourself. This assumes that benefit changes don't occur.Enjoy retirement.

[Rex B]

My only argument would be going for SS at 62. If you have a long lifespan ( we all hope) you will really be short changing yourself. This assumes that benefit changes don't occur.Enjoy retirement.

I understand that. I took a year to make that decision, doing multiple spreadsheet projects and weighing the pros and cons. My situation is a bit unique, in that we expect to have a lot more funds coming available around the time I turn 70.
The only short-term variable on the horizon is the possibility that I may earn some income next year working on a contract basis.

[sjfcontrol]

My only argument would be going for SS at 62. If you have a long lifespan ( we all hope) you will really be short changing yourself. This assumes that benefit changes don't occur.Enjoy retirement.

My argument would be to get as much as you can as quick as you can before they change the rules (again) and implement means-testing or some other way to reduce your future payments.

[philip964]

Here is my investment advice:

Do not put all your eggs in one basket.

Do not put all your egg baskets next to each other.

Watch American Greed on the CNBC channel in the evenings.

Buy when there is blood in the streets.

Your not a day trader.

There is no free lunch.

Here is my retirement advice:

Do not retire.

Comment my grandfather made to me at 93 about retirement: " I retired at 65, if I had known I was going to live this long it would have scared me to death." An attorney, he retired in 1962 with the princely sum of $10,000 in the bank.

Do not follow your wife around the house asking her "what ya doing" cause your bored.

My boss retired at 67, bought a big ranch in the valley, and dropped dead two months later.

Retirement can be hazardous to your health.

[rotor]

My only argument would be going for SS at 62. If you have a long lifespan ( we all hope) you will really be short changing yourself. This assumes that benefit changes don't occur.Enjoy retirement.

My argument would be to get as much as you can as quick as you can before they change the rules (again) and implement means-testing or some other way to reduce your future payments.

You are very correct about this and of course they can even change things retroactively. A bird in the hand now but give up something later unless they change the rules. I think I started at age 67 because of that same fear of a rule change.

[Rex B]

My only argument would be going for SS at 62. If you have a long lifespan ( we all hope) you will really be short changing yourself. This assumes that benefit changes don't occur.Enjoy retirement.

My argument would be to get as much as you can as quick as you can before they change the rules (again) and implement means-testing or some other way to reduce your future payments.

That certainly has entered the equation.
But the biggest thing was the difference was about $105K over 28 years. If I can't make $4000/year by accident something is wrong.

[sawdust]

The SocSec conumdrum: To state the extremes, take SS at 62 at a lower payout, or delay it until 70 for the higher payout. The curves representing total payout cross at about age 80. So, taking SS early and keeling over at 80 results in the same total payout as taking it late (with higher monthly payments)and kicking the bucket at 80.

The Conventional Wisdom is to live off of your retirement savings as long as you can, then take the increased payout of SS. SS is considered to be a lifetime annuity. As for me, I see it as the opposite. I chose to take SS early (but after 62). My reasoning was that if I were to spend down all of my retirement funds, all I will have left to live on in later years is SS. Although I am optimistic about the viability of SS (at least for my generation), I prefer to keep some of my own money over the years rather than rely totally on the guvmint. I, too, have created spreadsheets (I invented VisiCalc ) that allow me to plug in various scenarios that is essentially a cash flow indicator for as many years out as I care to shoot for. One constant stands out: over a 30-year period, for many, even a small increase of the inflation rate in one's annual expenses has a far greater (negative) effect on one's finances than does does a similar performance improvement in one's savings.

Another comment: most financial planning programs assume a retirement period of 30 years or so. If retirement begins at 62, that means that the thinking is that you will make it to about 92. Yet statistically, one has less than a 5% chance to get there. As in all things, your mileage may vary.