How Much Should Retirees Allocate to Equities?

beware

Lenin said Create caos bankrupt the country and a small group will control

do it all very fast before the people awaken

AMERICANS WAKE UP AND SLOW DOWN THE GOVERNMENT DECISSIONS THINK

BEING THERE of AK @ Jul 14, 2009 08:09:25 AM

Retirement Portfolio

This is what one TV expert said and it made a lot of sense, "If you are within 10 years of retirement and will need your invested money soon after you retire, sell everything possible that is high-risk. Stocks are for long-term growth, not short-term."

Following the advice of our financial planner, we invested some of our cash in a money market fund and promptly lost about $800.00 of our $15,000.00 investment. True, that is not a lot of money, but it's a lot to us when it's our money. We made the decision to get out then and there and return to the bond market.

We have lost nothing in this present economic down-turn. When inflation creeps up, we simply restrict our spending until it levels out again. We live comfortably (not lavishly) on the interest our bonds pay and our two Social Security checks. We have been retired for 8 years and have yet to be forced to sell even one bond.

Mae Beller of OK @ Mar 22, 2009 17:41:57 PM

HOLD YOUR HORSES, HOLD YOUR BREATH AND HOLD ONTO YOUR ASS!

A RETIREE OR ALMOST RETIREE SHOULD HAVE SOLD HIS EQUITIES MONTHS AGO AND PAID OFF ANY INDEBTEDNESS ON HIS HOME. THE BALANCE SHOULD BE IN SECURE BANK ACCOUNTS. DO NOT PLAN ON ANY APPRECIABLE CAPITAL GAINS IN THE FORESEEABLE FUTURE ON ANY INVESTMENTS YOU MAY HAVE BECAUSE COMRADE OBAMA AND THE COMMIES ARE REVVING UP TO TAX TUKHIS GELT OUT OF THE MIDDLE CLASS. TO ADD INSULT TO INJURY, COMRADE OBAMA IS PLANNING TO USE TAX MONEY TO FUND HIS OWN ARMY OF BROWN BROWNSHIRTS UNDER THE GUISE OF A "MAN MADE DISASTER" RESPONSE FORCE.

MOSHE HUNG SO LO RABEYNU of FL @ Mar 20, 2009 21:54:35 PM

Incomplete Question

As Mr Hatten of OR was hinting at, any asset allocation review that fails to consider the present value of one's expected future Social Security payments may be an incomplete review indeed. Instead of merely stocks, bonds and cash, consider stocks, bonds and Social Security PV, and cash. Grossing up your bond allocation, to include a Social Security component, may prompt you to invest more in stocks. The present value of one's future SS payments is a chunk of assets often neglected when considering asset allocation.

Dick True of PA @ Mar 16, 2009 23:13:24 PM

Wrong Question

Retirement planning guides tend to focus on finding the best risk/return. They end up following "rules of thumb (100 - your age, for instnace) They fail to help people set a solid target amount. If people took the time to figure out how much they actually need, they might make better risk decisions.

I used an online calculator delity from Fithat took into account life expectancy (I chose 100), my expected SS and pensions, inflation, my true expenses and taxes, and monte carlo analyses of different market conditions to figure out when I had ENOUGH! Now I have a target amount and the right investment mix to make it last. Turns out I can live the life I want with 0 - 20% in equities.

I could be more aggressive, but what's the point? Twice before in my life I've tried to make a little more than I needed and ended up with less. I don't plan on making that mistake again.

Michael Hatten of OR @ Mar 16, 2009 12:26:22 PM

Why not protect equities?

What's wrong with a trailing stop on ANY eqities ANYtime using on line brokers @ $7/transaction?

Last year I increased my retired modest liquid net worth by $18,000. (Doesn't compare with the 700 at Merrill Lynch who got

$1 million or more, I admit.) My stocks sold automatically last summer when they started down, then I bought FDIC insured CD's before interest rates went south.

Not rocket science. You knew people who took the widely advertised interest only mortgages would get stung, those who loaned would get burned, and greed had free reign with Credit Default Swaps and Collateralized Debt Obligations (approved "instruments" by Mr. greenspan) where one doesn't CARE whether the debt can be repaid. Just originate the "liar loan", take the money - and RUN.

Ever hear of Enron, Global Crossing et. al? You blindly trust corporate America with your life savings?

It was all reported and even advertised. Don't we THINK about what those commercials are promoting?

Scarry!!

W. L. Head of NC @ Mar 15, 2009 23:20:18 PM

Annunities

My broker changed my fixed annunity into a varible annunity when I retired. He said with a fixed annunity, I wouldn't be able to vary my payouts, once I set an amount. He also put a Ryder on my annunity, which means, I will continue to get 4 and a half percent of my original fixed annunity amount for life. However, about half of it is coming out of my principal now. Am I better off taking the interest from my new principal and hope the stock market will go up or take the Ryder?

Barbara Crotts of OH @ Mar 14, 2009 19:56:44 PM

I lucked out

I wanted to give my brother a good start in his insurance career so I bought a 'high-risk' insuraance policy from him. Two years later I had an idiopathic brain annie (Circle of Willis) It has literally saved my life....I've lost count of my surguries...

I am in assisted living which I hate....in Mississippi TOO close to my mother...I DO PRAY to get to Texas one day...."All my men" are there and I love deerly.

I walk now & have recovered except for a short term memory....so I take alot of notes.

sILVER bELLE of MS @ Mar 12, 2009 22:58:07 PM