Reply to Regret Retiring Given Inflation/Market Woes?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]When the market was roaring, having 2-3 years of expenses in cash was seen as a missed opportunity, even for people close to retirement. And it's true that interest rates on savings accounts were pathetic - the best I could get for a HYSA was .3%. I did it anyway, because I have an extra large security gland. Of course it loses out to inflation every year, but its point isn't to maximize yield. Its point is to help you get through an environment like this without selling investments at a loss, racking up credit cut debt, or drastically cutting living expenses.[/quote]

There are other options.  I, for example, am currently retired (early) but still have a lot of my portfolio invested in the market.  I suspected this might be a tough year for stocks, so I sold some on literally the first trading day of the year in January.  But, in retrospect I didn't sell enough -- I got hit with a bigger tax bill than I had expected because I made a foolish mistake in 2021 that cost me big time.  So now I'm sitting on maybe 2 months in cash reserves, 3 tops.

It's not a matter of now having to sell stocks at a loss, but of having to sell them at less of a gain.  That's what happens when you play the long term game.  I'm thinking, though, that instead of even doing that I might first try borrowing a few months' worth of cash from the pledged asset line that I have set up with my brokerage firm to buy a little time and see where the market goes.  The interest rate is still pretty low (around 3 percent), so I'm tempted to give it a shot.

Times like these require creative thinking -- not panic or regret.

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I would never want to be in the position where i'm thinking of borrowing money to pay my expenses. Even if the math works, that would seriously mess with the Sleep Well At Night side of personal finance.[/quote]

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