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Home › Forums › Other › My next door neighbor was a cop, still under 60, been retired for more than 5 yrs › AN wrote:ltsdd wrote:I agree.

May 31, 2012 at 11:58 PM #744710
ltsddd
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[quote=AN][quote=ltsdd]I agree. It sucks to have to work all your life and still not able to have a worry-free retirement. If your goal is to preserve the principle and investing like one then you’re going to run into the risk of running out of money before you die. Here’s one tidbit about the market, I don’t think it ever had a negative return over any 10-year period.[/quote]
The only time you can truly have a worry-free retirement is when your money can make more money from extremely safe investment (CD) than you can spend. Then you can a more worry-free retirement. I’m definitely not risk adverse by any stretch of the imagination, at least not right now. This is because I know I have time on my side and I can ride through any down turn and I’m still making money so I can dollar cost average if I need to. However, I know that when I retire, I will be extremely risk adverse. Which mean I won’t want to retire until I can truly live off the earning of my money when it’s mostly in CD and bonds. I’m sure most retiree would fee the same way.
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That’s what I used to think. But I am really sold on idea of splitting your retirement $$ into various buckets so on the one hand you’ll know you will have steady flow of income for x number of years regardless of how the market performs; and on the other hand you’ll know that your retirement $$ will have the opportunity to grow.

[quote=AN]
With your tidbit, which market are you referring to? The DOW is lower in 2009 than 1999, it’s lower in 2010 than 2000, it’s lower in 1975 than 1965, it’s lower in 1982 than 1972, it’s basically flat between 1962-1982 with some swing between 600-1000. The S&P was lower in 2010 than 2000, lower in 2009 than 1999 & lower in 1975 than 1965. Again, these 10 years period might not matter as much to those who are working. But to those who are retired, 10 years with 0 or negative growth means they have to deplete their nest egg. Depleting nest egg means they’ll have less $ to participate in the market when they come back up. Which mean they would have to earn a much higher % of return to make up for the amount of money they lose when the market crash.[/quote]

I was referring to the S&P & DOW. The DOW might be lower in 2009 and 2010 compared to 1999 and 2000, respectively. However, the returns during the 10-year periods were still positive. You’re right about the possibility of depleting your nest egg. That’s why I don’t think you want to switch to investments that could barely keep up with inflation during your retirement years.