Reply to What do people do when a serious downturn happens 5 years or so before retirement?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]What do people do when a serious downturn happens 5 years or so before retirement?

I feel like people are becoming more and more aggressive investing in equities and even when people "diversify" when closer to retirement they are still heavily invested in equities.

So say you are retiring in 5 years and you don't have the multiple millions that the standard user on this forum has, what steps do take to recover financially?[/quote]

When you’re that close to retirement, you should have essentially nothing in the stock market.

Unless you’re my FIL. But if you were, you’d be an idiot. [/quote]

I’m not so sure about that. Unless you are planning to annuitize the money, which is usually a bad deal.

My life expectancy is about 90 years, give or take 5 years. So if I retire at 65, I will have 20-30 years of retirement. If I take it all out of the stock market at 60, then I am missing out on up to 35 years of gains. That’s actually pretty devastating.

If you are 65, have a house paid for, kids launched, and a steady income stream, there is absolutely no good reason to take all of your money out of the stock market if you expect to live beyond 70. [/quote]

I agree with this. We will also have a good amount of equities in retirement. I don’t think there is a magic one size fits all allocation but for us, being 80/20 will work. Everyone’s portfolio is different but I still want growth beyond the day I retire. Plus, there are studies that ratio isn’t nearly as important as withdrawal rate.[/quote]

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