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Strategies & Market Trends : Young and Older Folk Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (7796)	8/9/2024 5:50:08 PM
From: Max2.0	2 Recommendations Recommended By agniv ddbpaso Read Replies (2) \| Respond to of 22060

My Mother is 91 and she has a decent pile of assets and I am the only heir. I am not factoring inheritance into my economic plan. A lot can happen and I don't want to count on an inheritance bailing me out.

To: chowder who wrote (7796)	8/9/2024 6:04:07 PM
From: Max2.0	Read Replies (2) \| Respond to of 22060

Another point is that SoCalGirl is looking to relocate to a lower cost of living area. So there is that. The other point is that she has a $2.3M portfolio which is more than most people her age has. One mindset we can hold is to burn a little of that to get over the next few years when expenses are lower. If we go down to say $2.1M and gain an extra $30K of SS in a few years plus have a cost of living that is maybe 70% of SOCAL living expenses, would that be a reasonable fallback strategy? The other obvious alternative is to continue working to age 62 or 67.

To: chowder who wrote (7796)	8/9/2024 6:23:10 PM
From: SeeksQuality	Read Replies (1) \| Respond to of 22060

The more the income need drops, the more it makes sense to "bridge" to the lower level of income rather than stretching for the higher yield immediately. If there were reason to believe that $100k (plus Social Security) would suffice in a few years, for example, then the portfolio could be constructed with a 5% yield (such as it is now) on $2M of assets, with $300k available to bridge the gap from here to there. There's a cost of stretching for a 7% yield and a risk that things turn badly, especially if that whole amount is being spent with basically no margin of safety. But if the income needs were to drop from $150k-$175k plus one-off expenses to $130k ($100k plus Social Security) then that dramatically simplifies the picture. That was my initial suggestion! I don't know the details of the timing or the budget, which is why I suggested a session with a financial planner. I do know that a 5% yield point is MUCH easier to achieve, and ultimately safer, than ramping up to a 7% yield point. When the needed income will drop off within a few years, it almost always makes sense to target the lower income and bridge the temporary need.