So I was doing some basic calculations and realized if I really wanted I could just save cash and bypass the fear of losing the gains, or worse, losing my principle in index investing. Now I'm not actually going to do that but this is what it would look like if I did.
Currently maxing a tsp (mine) and 401k (spouse). This amounts to 36k per year. We plan on hanging our hats 14 years from now which would be just over 500k guaranteed cash saved. with investing, it should come out around 800k IF the markets dont stagnate, or crash. That amount is also projected at a 7% annual gain each year for the next 14 years. As we all know, there is a lot of "if" in that statement.
As far as our current living and future expenses are concerned, that 500k guaranteed savings is more than enough for us. Fire age for us is 57. Even if we draw social security early at age 62, we would still get 950.00 each (estimated from ssa.gov). I will also draw a small pension, should be about 600.00 after taxes. That amount totals 2,500.00. On a 3,000.00 per month retirement budget we would only need to draw out 50.00 per month from our saved cash.
From age 57 to 62 is the only gap where we would have to draw up to 2,400.00 per month from the cash account, so about 144k for those 5 years. Two ways we have to alleviate that is both of us working part time or one of us keep working full time for those 5 years.
As I said, not sure I could pass up the free money from investing but was curious if anyone else has done, or have thought about it due to market fears.