notices - See details
Notices
D
DAVID (not verified)
29th February 2020 | 4:11pm

Anecdotal, not data driven, I do have a few observations.
While still working, prior to your retirement, bank your salary and see if you can live off of your investments and other retirement income. For two years I withdrew from my bank account what SS would be plus my investment income, which I projected at a 3% annual return, which I used to live on.
Since we do not have a crystal ball see if your investment plans and withdrawal rate would have worked in the late 60s to mid 80s markets. If not keep working.
Go back 15 years and see if your stock portfolio had a return that averaged around the return of a 3 ETF or mutual fund portfolio made up of VOO or VFINX, RSP, and VXF or VEXAX. If your stock portfolio did not have an annual return that averaged to these three views of the stock market do not retire; instead revisit your investment philosophy and see why you did not earn market returns. Fixed income takes too long to discuss so I will just say risk and return are joined at the hip just like your grandma told you.
Take a look at what you did in the dotcom bubble and 2008. Remember that is while you are still working and adding to your portfolio; now think what you would have done when you are no longer working and are dependent on that portfolio to live on. If you did anything you may have the wrong portfolio for you, especially in retirement.
Plan on needing about your current salary as a realistic number for your income needs in retirement.
Just as background I was born in 1940 and retired in 1998.