How tempted were you to adjust your asset allocation when bonds were soaring and equities were getting absolutely shellacked? I get that hindsight is 20/20 and all that, but man.. was that ever an opportunity to go more traditional at 60/40 or even 70/30, especially as an early retired couple where at least one of you could have 50 years left to go.This is why you need to have a withdrawal plan. Such a plan should allow you to sleep comfortably at night knowing your plan is built to withstand these kind of market fluctuations.
FWIW, we have a somewhat lower overall allocation to equities than many here (closer to 40% with the rest in fixed income). Our annual withdrawal rate is low (around 3% - about 1/3rd of which is discretionary). Retired in 2016 (in my early 50’s) and our net worth is considerably higher today than eight years ago. We are conservative in our asset allocation, but feel we can afford to be given our relatively low withdrawal rate.
I didn’t lose a moments sleep at night during the market plunge in 2020. So, our asset allocation and withdrawal level works for us.
As an early retiree with 40% in equites, a 3% WR wasn’t especially conservative with fixed income yields at historically low levels.
Statistics: Posted by Wanderingwheelz — Tue Apr 30, 2024 6:27 am — Replies 8 — Views 979