MrCheapo wrote: ↑Wed Dec 01, 2021 12:32 pm
22twain wrote: ↑Wed Dec 01, 2021 5:22 am
We use basically #1, except that our spending rate is less than 2% of our assets. We also have a conservative asset allocation, about 40% stock between the two of us, which will soften any downturns in the stock market. Finally, both of us delayed or are delaying collecting Social Security until 70. When both of us are collecting, two years from now, SS will cover all our current expenses. Our withdrawals from assets will drop to zero except for major one-off expenses such as a new roof or car, or splurges.
Interesting. So we will be in a similar situation (except its pensions not SS which will cover our living expenses). So how are you changing your AA when that happens? One could argue that's a good situation so go to 100% equities.
We have no kids or other close relatives. Our nearest relatives are a few cousins who are older than us. So we have no personal bequest motive. We'll probably move to a CCRC in the next ten years or so, which will increase our housing costs. Also, my wife's mother spent her last eight years (age 92-99) in a nursing home, so we want to have enough assets to cover that sort of end stage for at least one of us. There are organizations that we will be happy to leave our "remainders" to, but we're not striving to maximize that amount.
So we're basically letting our savings/investments ride.
Her assets are more conservative than mine, including a lot of taxable CDs. They're currently about 20% stock. She's taking RMDs from her 403(b) proportionally across all her sub-accounts. Her SS covers all her share of our expenses, so she saves the RMDs in CDs. She's never had a taxable brokerage account, nor is she interested in starting one. So her stock allocation is decreasing gradually.
I have a higher stock allocation, right now about 62%. I've let it drift upwards by not rebalancing out of stocks during the last few years, so as to counteract the decrease in my wife's stocks. When I start RMDs from my 403(b) in four years (under current law), I currently plan to take them all from the stock accounts, and reinvest them in total stock market ETFs in my taxable account.
So overall we should maintain at least the same stock allocation that we have now, but it will be mainly out of laziness.
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