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late 30's planning for eventual retirement

Last post Thu, Mar 1 2012 7:50 AM by MamaJ. 11 replies.
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  • Wed, Feb 29 2012 2:39 PM In reply to

    • Gary
    • Top 150 Contributor
    • Joined on Wed, Mar 28 2007
    • Posts 412

    Re: late 30's planning for eventual retirement

    I was a financial planner in the 1980's and I'd strongly recommend that you use 'asset allocation' in building your net worth. I've seen it work in good times and through the crash of '87. My clients came through it fine. An asset allocation model is one where you divide your investments into a number of different classes that react differently when things happen in the world. For instance, inflation is bad for bonds but good for hard assets like gold and silver. So having some of each will protect you whether prices go up or down (a real possibility right now). There are various models. And, no single one is exactly right. So don't agonize over which one to choose. As long as your various investments balance each other you should do fine over the long haul. Which is something else that you have working in your favor. For the last 100+ years the stock market has ALWAYS appreciated if you could hold it for 10 years. Most couples your age will have a least one and possibly two people living into their 80's. Maybe even 90's. So invest with the long haul in mind. Yes, set aside something you can turn to cash quickly for an emergency fund, but beyond that think long-term. Congrats on your strong financial position! You must be proud of what you've accomplished!
  • Thu, Mar 1 2012 7:50 AM In reply to

    • MamaJ
    • Top 100 Contributor
    • Joined on Thu, Nov 5 2009
    • Posts 963

    Re: late 30's planning for eventual retirement

     Gary, thanks so much for weighing in. Yes, we're proud that we were able to dig out. We really have a completely different mindset than we did ten years ago as far as wants and needs. I think living below our means is also helping us as we prepare for retirement. I see calculators that default to needing 80% of your pre-retirement income, and I know we can comfortably live on 50% of our current income if need be, if not even less.

    We've given some consideration to diversification as we invest, but I haven't done any hard analysis yet of our allocation. Thanks for suggesting it -- now I have a great project for this weekend!

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