I believe that I (51) and DW (54) are about 10 years away from retirement. Nothing certain, but it's all trending roughly that way, even if the market underperforms in that decade.
The basic setup:
* Both in good health with some long-lived grandparents, so targeting a 40-year retirement (very much doubt we'll live that long, but seems the conservative thing to do).
* I'm aiming for a baseline of 50x of our required spending, and 25x of our wanted spending.
* I'm at peak earnings (so far), and we're saving somewhere around 40% of post-tax income despite being in a VHCOLA.
* Full 401k + company match and mega-backdoor Roth - the rest saved to taxable income. (DW has meaningful Trad IRAs, so backdoor Roth isn't an option.)
* Everything in low-cost index funds or ETFs
* Currently at 70/30 equity/fixed income (the latter largely intermediate-term treasury funds), 80/20 US/international.
* A large mortgage with 23 years remaining, but at fixed 2.875%, so no way am I paying it off. We plan to stay in this house for as long as it is physically possible (though it's a nice stash of equity in a worst-case scenario).
* Lots of traditional IRA/401k, comparatively modest Roth. I plan to do lots of Roth conversions between retirement and SS/Medicare.
At 10 years on the hypothetical clock, I'm getting to the point where Sequence of Returns could easily go very well for me or add another 5 years to my timeline.
All that said, the question: are there things that you think I should consider doing *now*, in the context of (for example) >2% real TIPS, etc., that will reduce risk at retirement age and beyond?
A few things have crossed my mind:
* tilting more heavily towards fixed income (possibly using one or both of the next two items)
* starting to buy 10-year TIPS at auction towards building a ladder (annoyingly, 10 years out is the start of the TIPS gap as I understand it, so I can't pre-fund 2035/2036/../2039, but I could prefund years after that)
* pre-funding the nominal mortgage payments with zero-coupon treasuries? (I could "pay" my 2047 mortgage today for 34 cents on the dollar, YTM of 4.6%, way better than my 2.875% mortgage)
... or anything else?
The basic setup:
* Both in good health with some long-lived grandparents, so targeting a 40-year retirement (very much doubt we'll live that long, but seems the conservative thing to do).
* I'm aiming for a baseline of 50x of our required spending, and 25x of our wanted spending.
* I'm at peak earnings (so far), and we're saving somewhere around 40% of post-tax income despite being in a VHCOLA.
* Full 401k + company match and mega-backdoor Roth - the rest saved to taxable income. (DW has meaningful Trad IRAs, so backdoor Roth isn't an option.)
* Everything in low-cost index funds or ETFs
* Currently at 70/30 equity/fixed income (the latter largely intermediate-term treasury funds), 80/20 US/international.
* A large mortgage with 23 years remaining, but at fixed 2.875%, so no way am I paying it off. We plan to stay in this house for as long as it is physically possible (though it's a nice stash of equity in a worst-case scenario).
* Lots of traditional IRA/401k, comparatively modest Roth. I plan to do lots of Roth conversions between retirement and SS/Medicare.
At 10 years on the hypothetical clock, I'm getting to the point where Sequence of Returns could easily go very well for me or add another 5 years to my timeline.
All that said, the question: are there things that you think I should consider doing *now*, in the context of (for example) >2% real TIPS, etc., that will reduce risk at retirement age and beyond?
A few things have crossed my mind:
* tilting more heavily towards fixed income (possibly using one or both of the next two items)
* starting to buy 10-year TIPS at auction towards building a ladder (annoyingly, 10 years out is the start of the TIPS gap as I understand it, so I can't pre-fund 2035/2036/../2039, but I could prefund years after that)
* pre-funding the nominal mortgage payments with zero-coupon treasuries? (I could "pay" my 2047 mortgage today for 34 cents on the dollar, YTM of 4.6%, way better than my 2.875% mortgage)
... or anything else?
Statistics: Posted by brightlightstonight — Wed Jun 12, 2024 8:32 pm — Replies 0 — Views 100