Are You Afraid to Retire? Why?

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Comments

[Jay]

I've been moving my retirement investments into a more aggressive posture as I get closer to retirement itself, because I'm already falling short of what I had expected to have accrued by now. At this point though, I'm beginning to think it's not such a good idea. The InvestTalk radio guy (www.investtalk.com), who I respect, was pretty clear that this is not the thing to do. I'd thought it was. How do you all weigh in? I appreciate your thoughts.

[Retired Syd]

@Jay-I spent my working years with a pretty aggressive portfolio (something like 80% stock and 20% bonds). As I got close to retirement, I shifted to a slightly less aggressive mix (75/25), which is still considered pretty aggressive for my age and retirement status. But I need it to last 40-50 years, so need that growth. I think the most important thing right now is to have about 3-5 years of cash on hand at the time you retire so you can ride out the market roller-coasters without having to liquidate the stock portion in bad years.

I wish I knew, it certainly is nerve-racking--but I generally have faith that 3-5 years from now, things are going to be looking up . . .By the way, I think it's important to have a VERY diversified mix in your stock holdings. That has made this down turn less awful for me so far.

[Jay]

Thanks so much, I appreciate your perspective on the matter! Your approach is similar to what Steve Peasley recommended on InvestTalk, which is encouraging because that's what I use as my primary advice. Seems it's time for me to start paying a little more attention to this, I get why it is that a less aggressive stance will be preferable. I do agree with you that being VERY diversified is the way to go, at least I have that set up so far.

[Chris]

Wow. How are you guys feeling about your investment choices now? My husband and I are more conservative than this and we aren't retired yet - closer to 60% stocks/40% bonds and fixed. We've been glad that we are through the current downn market.

[Retired Syd]

@Chris, thanks for all your great comments recently! On this one, I have to say "a lot better than I did 5 months ago!" But seriously, as we get older, we will shift our allocation slowly more toward bonds and cash, but for now we still have such a long time to wait it out since we're going to be needing this nest egg to last maybe 50 years.

If we were in our 60's or 70's, with less years to ride out the stock market's turmoil, I would probably not be feeling as calm about such huge fluctuations.

[Chris]

I'm afraid to mention this one because of all of the political ruckus but the thing I'm most afraid of if I retire completely is having to buy individual health insurance. I work a little over half time right now and am able to buy into a group plan. I pay the full premium but it is decent insurance that would provide good coverage in the case of cancer or some other high cost disease. This seems like such an unpredictable cost to me and I know people who have not been able to get decent health insurance - or had to pay extremely high premiums - that I can't get comfortable with the risk.