Author Topic: Investment Changes post retirement  (Read 2107 times)

rtrnow

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Investment Changes post retirement
« on: January 31, 2013, 11:54:09 AM »
I imagine this has been covered, but I can't find the discussions. Feel free to post a link if you have it. I'm wondering what if any investment changes should be made right before or after ER. I will be close to FI in about 2 years. I plan to leave my job and pursue a hobby that already generates some income. My goal is that the hobby plus rental income will cover expenses without touching investments at least for the first few years. Currently my investments are about 90/10 stocks/bonds.

arebelspy

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Re: Investment Changes post retirement
« Reply #1 on: January 31, 2013, 12:08:37 PM »
It really depends on your investment philosophy, but I'd keep the same assuming you are fairly young.

Your investment horizon is 50 years.  The fact that you are retired now shouldn't change that fact, that you need your money to last that long (or more, or less, or whatever).  You may want to get more conservative as you age, but not just because you're retired versus not, IMO.

It'd be dangerous to make a more conservative AA just because you ER'd at 35, then have your money run out at 60 (or, more likely, have the buying power so eroded due to inflation, because you went with a more conservative AA that didn't keep up with or outpace inflation).
« Last Edit: January 31, 2013, 12:20:53 PM by arebelspy »
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If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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tooqk4u22

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Re: Investment Changes post retirement
« Reply #2 on: January 31, 2013, 12:22:46 PM »
It really depends on your investment philosophy, but I'd keep the same assuming you are fairly young.

Your investment horizon is 50 years.  The fact that you are retired now shouldn't change that fact, that you need your money to last that long (or more, or less, or whatever).  You may want to get more conservative as you age, but not just because you're retired versus not, IMO.

This. And remember that tranitioning to retirement shouldn't necessitate a big change in investment mix - that should gradually change over time as you near retirement.  And if rental income covers a good portion of your spending and assuming it is well underwritten (i.e. you are factoring in a vacancy rate and reserving for capital needs) then you can afford more in equities.

rtrnow

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Re: Investment Changes post retirement
« Reply #3 on: January 31, 2013, 12:33:10 PM »
It really depends on your investment philosophy, but I'd keep the same assuming you are fairly young.

Your investment horizon is 50 years.  The fact that you are retired now shouldn't change that fact, that you need your money to last that long (or more, or less, or whatever).  You may want to get more conservative as you age, but not just because you're retired versus not, IMO.

This. And remember that tranitioning to retirement shouldn't necessitate a big change in investment mix - that should gradually change over time as you near retirement.  And if rental income covers a good portion of your spending and assuming it is well underwritten (i.e. you are factoring in a vacancy rate and reserving for capital needs) then you can afford more in equities.

Thanks. That's kind of what I was thinking but wanted a bit of reassurance. I'll be 35 or 36 when I leave my current job. Once the mortgage is paid off (will happen before I quit), the rental should generate about half my living expenses ($800 per month) after factoring in HOA, 10% vacancy, insurance, etc.