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Investing - Theory, News & General • Bernstein article - Why Should You Care When Stocks Plunge?

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As a recent retiree, I spent a lot of time of mapping out annual projected income streams (pension, social security, etc.). I then estimated annual remaining residual living expenses required to be funded through a TIPS ladder. I set up the TIPS ladder in April of 2024 using the tips ladder web based tool referenced on this site.

Observations
    I was pleased to see the impact of the yield being positive on TIPS. This significantly lowered my up front cost to fund the 30 year TIPS ladder.
      The pyschological benefits of having projected expenses covered for 30 years is reassuring. It reminds me of having an inflation adjusted pension.
        My risk tolerance for the risk portfolio immediately increased after setting up the LMP. I don't worry about what the market is doing in the short term.
          The LMP/RP solution is not irreversible (like an annuity). I can sell my TIPS tomorrow if needed.
            I view the risk portfolio as a mechanism to invest and compound for longevity and legacy purposes. It is however available for other expenses if needed.
              I chose to fund the LMP to cover 100% of anticipated expenses (not just essential expenses). This was just a preference on my part.
                There are times when monthly expenses are lower than what the LMP provides. The excess funds can be utilized to beef up the emergency fund or add to the risk portfolio.

                Statistics: Posted by marshall — Wed Sep 18, 2024 12:25 am — Replies 124 — Views 11844



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