Posted: 9/15/2025 12:07:52 PM EDT
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Backstory: I am 72 and retired with a small business. I get $4k/month from SS and make from $3k - $5k/month from the business before taxes. I rolled my employers 401k to a Rollover IRA when I retired. My investments are as follows: Cash (Money Market) 10% FSELX (Semiconductors) 44% FXAIX (S&P 500) 37% FBTC (Bitcoin ETF) 9% From 9/15/24 - 9/15/25, I have outperformed S&P 500, DOW and MSCI growth Me 28.65% S&P 19.23% DOW 19.5% MSCA 21.4% Dilemma: In the April dip, I lost 28% in valuation. Scared the $hit out of me, but I didn't do anything stupid. As of today, I am up 7% over my pre-dip valuation. However, I don't feel like I have enough time or sanity to ride out another dip. In addition, I will have to start making RMDs in another year. I was thinking about selling some stocks to convert to cash. Not everything, but enough to protect me from another dip/crash, and still leave some to grow on. Thoughts? |
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My dad, 76 and retired, just went through the same. He was freaked out by the April tariff pullback. I told him not to look for a few months and it would recover; well, here we are. I got him setup with my financial advisor and he is making changes into less volatile holdings and taking quite a bit of exposure off the plate by moving into some CDs/money market accts/mutual funds/etc. He also needed some advising on tax implications. I told him a couple weeks ago "here's your chance to get out!" and we had a good chuckle over it  . My parents have saved/invested well over the years and don't spend much from month to month. To him, preserving wealth was more important than any future gains he would miss out on.YMMV. |
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Looks like FBTC did the heavy lifting for you, congratulations. Have you considered selling covered calls? Or buying long Treasury bonds? A modest position in ZROZ would hedge a stock position better than a larger amount of cash would. I am 3 years younger than you, so I understand your situation well. |
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I would say it involves the total $ net worth/assets you have as well as if you are trying to leave a legacy inheritance to anyone. If you have 10 million and want to leave a big inheritance, keep on keeping on so to speak. If a dip happens it literally won’t affect your lifestyle. If you barely have enough $ to last your estimated remaining time with your desired lifestyle then it would be best to run the safe race. |
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It depends on how much you have and your long term goal (i.e. heirs or ?). A drawdown is really only a concern if you are forced to make withdrawals (i.e. to meet expenses) while the market is depressed. Of course RMDs will force you to do that regardless. One strategy would be to start Roth conversions now, before your RMDs kick in, your income goes up, your (marginal) tax rate possibly goes up and second and third order effects begin (like that Medicare adjustment fee IRMA or whatever it’s called). I would stay away from ZROZ at least until the yield curve reverts (un-inverts). Currently long term rates are only marginally higher (~0.5%) then 4-week T-Bills and consequently not worth the risk. |
I wanted a mission, and for my sins, they gave me one.
No rules today, sport…just orders.
It’s not about how many people you kill, it’s about how many you save.
No rules today, sport…just orders.
It’s not about how many people you kill, it’s about how many you save.
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You did not not provide NEAR enough information for anyone to answer your question. 1. What are you goals for this money? 2. What percentage or dollar amount do you plan to draw down from this account to use for monthly income? 3. How do you plan on managing your RMD's? Your rate of return over the past year is nearly meaningless, and only adds noise to this conversation. The only thing you should protect yourself from - is being forced to sell your equities when they are in a down cycle, such as for income or RMD, or unforeseen expense. |
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Originally Posted By Corvette-Racer: I am 72 ........ I get $4k/month from SS and make from $3k - $5k/month from the business before taxes. You don't have to spend the money - invest it in a taxable brokerage account, give it to your kids, stuff it in the mattress, or whatever. And yes, at your age and having "enough" money I would put the semi conductor and bitcoin money into less volatile things. |
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Originally Posted By FALARAK: You did not not provide NEAR enough information for anyone to answer your question. 1. What are you goals for this money To live on when my business no longer supports my needs 2. What percentage or dollar amount do you plan to draw down from this account to use for monthly income? As little as required by law or as required to meet monetary needs 3. How do you plan on managing your RMD's? Haven't thought about that yet. Looks like I need to get a financial advisor Your rate of return over the past year is nearly meaningless, and only adds noise to this conversation. The only thing you should protect yourself from - is being forced to sell your equities when they are in a down cycle, such as for income or RMD, or unforeseen expense. Hense, my question regarding moving to cash . |
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I'm a bit younger than you. If I'm looking at it right you are 10% cash meaning that 90% is in something more risky. From what you outlined most of it is fairly aggressive in allocation. More information would be needed to determine what your needs for income from this portfolio are. I'll admit I'm much more conservative at this stage and I'm actually in the process of moving into the market and some other investments and away from cash in order to make my portfolio more long term oriented. (I know I need more stock exposure to combat inflation long term) But, circling back, IMHO you are very aggressively allocated at this time for your age. |
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Originally Posted By Corvette-Racer: Yeah, that is my concern. It is not aggressive AT ALL if you don't plan to use the money for income outside of RMD's. I know retired people who are 100% equities, because SS+Pension meet 100% of their needs, so they invest for the long haul/inheritance timeline. Asset allocation is NOT dictated by age alone. We'd need to know when you plan for this side business to stop providing you with adequate income? We'd also need to know the balance of the IRA, to understand the percentage drawdown needed (or even plausible) That said - if your plan was that the IRA needs to provide $4000 per month income - that's $48,000 per year. To sustain that over the long haul, the balance of the IRA would need to be 1.2 million dollars (using the typical 4% rule) and the asset allocation would need to be in the range of 60% to 70% equities, and 40% to 30% bonds/fixed income assets (typically a mix of bond funds and some cash to cover annual withdrawals) If you don't have 1.2 million in the IRA and other savings, but expect $4k a month in drawdowns..... yes, I'd recommend you talk with a financial advisor. Hopefully one that does not work for an insurance company - otherwise you will get sold a variable annuity (as that often seems to be the only tool in their toolbox) |
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I'm 58, and 7 years from retirement. The bulk of my retirement is in an IRA, under professional management. They are pretty conservative. My 401K is a self directed, in which I have a lot more aggressive investments. If I lost all of my 401K, I would survive. It would suck mightily, but I would survive. My plan, when I am 2 years out from my go date, is to move at least 2 years of intended draw to treasury funds and once I actually retire, take it a month at a time, and replenish it in small chunks when the market is good. That and. a pension will get me thru till Social Security kicks in ( I'm gonna wait till "Full" retirement pay at least.) and I would be able to leave the IRA or at least 5 years, and maybe as long as 10. Depending on your balances, I would take at least half of your IRA and move it to more conservative and stable investments, and start making a plan on how you intend to manage your draw when the small business stops giving cash. |