Sorry, You Probably Don't Have a Portfolio Emergency

[AdrianC]

Nice article by Christine Benz:

Sorry, You Probably Don't Have a Portfolio Emergency

http://news.morningstar.com/articlenet/article.aspx?id=807538

A friend recently sent me an email to tell me he was worried about his portfolio.
...
But a portfolio emergency? I just didn't see it.

I did see a bigger problem, though. My friend simply hasn't saved enough for retirement.

A common problem. Not around here, of course.

[Kaspian]

It's odd the writer didn't point out how the portfolio had performed (can only assume very well) and what the soft average annual goal was for returns.  Definitely the investor needs to get on board with a written Investment Policy Statement to outline all the proper targets and the desired outcomes. ...And as a logical document to prevent being swayed by snake oil salesmen.

[bacchi]

The advisor said that the target fund was too conservative but recommended an annuity? Hahaha. That's rich (for the annuity salesperson).

The friend isn't in awful shape. In 7 years he/she will have about $600k. That has to last until 65, or ~10 years, if the friend retires at 55. We don't know the friend's spending but if it can be reduced to SS+4% of the remainder, they're set. Serious spending changes are probably required, of course.

[AdrianC]

The major point (I got) was the friend shouldn't be concerned about tinkering around the edges of the portfolio when the real emergency was staring him in the face.