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Been a bit of a rocky year or two for my retirement funds. Last year and this year were more or less flat overall with the market all over the place.
I know that the overall trend in the long term for stock markets is upwards. If you look at the charts for them over the years the market always trends up - long term.
However, there have also been some noticeable pullbacks/devaluations/corrections/etc. and those usually take at least a few years to correct.
I don't have a few years. I am getting a bit jittery. I have four years to retirement. I have enough to theoretically retire now - if nothing goes wrong (I don't get sick, the market doesn't go bad, etc.) - but one thing I have learned in the last 50+ years is that things always go wrong, sooner or later. Things break, people get sick, jobs go away, unexpected expenses come up - stuff happens. Those who don't plan for stuff happening suffer when it does - or they suffer more than they do if they planned for those things to eventually happen.
I have no debt except my mortgage and right now my theoretical property equity is more than my actual debt. But that can go away too. If I went on SSI now I could just maybe pay my mortgage only, nothing else. If I wait until full retirement age, then I will have enough to live on at my current expenditure rate.
I max out my 401K (including senior makeup funds) and Roth IRA (I can't put money into my traditional IRA - my income is too high).
I also have a child who is barely making ends meet, who doesn't have savings, who has sudden expenses such as medical or a car breaking down, and sometimes one of the earners in that household finds themselves without a job - those things puts them in debt, which they can't dig out of without my help.
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What I am getting to is that I am holding a fairly risky position in my funds now. On a scale of 1 to 5, I am at a position of 4, five being the most risk.
The past year and a half I have earned almost nothing in those fund. Going from being positive earnings to negative back to positive on any given week. In my largest IRA (a rolled over 401K) it is now just back to where it was a little over a year ago. They are all positive compared to what I put into them, but the growth is flat.
Now I see that some of the people who predicted the housing bubble and the resulting recession, are now predicting a huge pullback ahead in the stock market. Not tomorrow, not next week, maybe not this year - but ahead.
The other thing is I see the PDX area is in a housing bubble of its own. My property equity grows by 10% per year, mostly from simple appreciation due to the market pressure. I don't see how that can continue long term - at some point it is going to burst - just like it did in 2007.
Finally, my client/employer (I am a contractor), one of the largest corps in the world, has been in a slump this year and sees more coming in the next 6 months. They are starting to cut budgets - including head counts - here and there. I am fairly secure in the short term due to my position and experience, but one thing I know is that contractors are among the first to be shown the door, and that such things can happen very suddenly.
I am thinking of gradually pulling the bulk of my funds out of the stock market, and putting them into low interest "safer" funds - telling my funds manager to reduce my risk profile down all the way.
I would still keep about ten percent in the market - my Roth IRA - and keep contributing to that. If there is a pullback I can pull out of that quickly (a few days to a week) tax free.
Long term, my plan is, if I make it to full retirement age and I still have good equity in my property, to sell it and move further out and build using only the equity and cash savings, thereby being mortgage free. Then live solely on SSI.
I am not worried about SSI going bust in my lifetime - by the time it does (2035 or so) I will be gone.
My retirement funds (not SSI) are not for me (I hope) - they are for my child who may have to retire early due to health reasons, and who has no savings or retirement funds, and who may not get SSI if it reduces its payout. I.E., my plan is not to touch it - but while I could theoretically wait long term for it to come back, I might need some of it to survive short term, and I am concerned about the predicted pullback.
Not really asking any questions - just voicing my concerns - but feedback is welcome.
I know that the overall trend in the long term for stock markets is upwards. If you look at the charts for them over the years the market always trends up - long term.
However, there have also been some noticeable pullbacks/devaluations/corrections/etc. and those usually take at least a few years to correct.
I don't have a few years. I am getting a bit jittery. I have four years to retirement. I have enough to theoretically retire now - if nothing goes wrong (I don't get sick, the market doesn't go bad, etc.) - but one thing I have learned in the last 50+ years is that things always go wrong, sooner or later. Things break, people get sick, jobs go away, unexpected expenses come up - stuff happens. Those who don't plan for stuff happening suffer when it does - or they suffer more than they do if they planned for those things to eventually happen.
I have no debt except my mortgage and right now my theoretical property equity is more than my actual debt. But that can go away too. If I went on SSI now I could just maybe pay my mortgage only, nothing else. If I wait until full retirement age, then I will have enough to live on at my current expenditure rate.
I max out my 401K (including senior makeup funds) and Roth IRA (I can't put money into my traditional IRA - my income is too high).
I also have a child who is barely making ends meet, who doesn't have savings, who has sudden expenses such as medical or a car breaking down, and sometimes one of the earners in that household finds themselves without a job - those things puts them in debt, which they can't dig out of without my help.
----
What I am getting to is that I am holding a fairly risky position in my funds now. On a scale of 1 to 5, I am at a position of 4, five being the most risk.
The past year and a half I have earned almost nothing in those fund. Going from being positive earnings to negative back to positive on any given week. In my largest IRA (a rolled over 401K) it is now just back to where it was a little over a year ago. They are all positive compared to what I put into them, but the growth is flat.
Now I see that some of the people who predicted the housing bubble and the resulting recession, are now predicting a huge pullback ahead in the stock market. Not tomorrow, not next week, maybe not this year - but ahead.
The other thing is I see the PDX area is in a housing bubble of its own. My property equity grows by 10% per year, mostly from simple appreciation due to the market pressure. I don't see how that can continue long term - at some point it is going to burst - just like it did in 2007.
Finally, my client/employer (I am a contractor), one of the largest corps in the world, has been in a slump this year and sees more coming in the next 6 months. They are starting to cut budgets - including head counts - here and there. I am fairly secure in the short term due to my position and experience, but one thing I know is that contractors are among the first to be shown the door, and that such things can happen very suddenly.
I am thinking of gradually pulling the bulk of my funds out of the stock market, and putting them into low interest "safer" funds - telling my funds manager to reduce my risk profile down all the way.
I would still keep about ten percent in the market - my Roth IRA - and keep contributing to that. If there is a pullback I can pull out of that quickly (a few days to a week) tax free.
Long term, my plan is, if I make it to full retirement age and I still have good equity in my property, to sell it and move further out and build using only the equity and cash savings, thereby being mortgage free. Then live solely on SSI.
I am not worried about SSI going bust in my lifetime - by the time it does (2035 or so) I will be gone.
My retirement funds (not SSI) are not for me (I hope) - they are for my child who may have to retire early due to health reasons, and who has no savings or retirement funds, and who may not get SSI if it reduces its payout. I.E., my plan is not to touch it - but while I could theoretically wait long term for it to come back, I might need some of it to survive short term, and I am concerned about the predicted pullback.
Not really asking any questions - just voicing my concerns - but feedback is welcome.