Is anyone else looking at taking profits now? Not just shifting ratios but putting money into FDIC bank accounts .?
I’m worried and thinking about moving two year’s expenses into the bank. Just in case this really crashes.
@dragonmom We have around 4 years (more if we choose to tighten our belt a lot) of living expenses out of the market right now. Still means the vast majority of our portfolio is invested in equities but it gives us a cushion to get by on if conditions warrant without having to sell into a downdraft.
Thanks for the reinforcement of my idea. Are your funds all in FDIC ?
Yes. Some directly, some indirectly but still FDIC insured. I’m not sure if it is the right move or not but its the way we’ve chosen to roll. The rest of our assets are very equity driven. Not loving fixed income. But who knows? 
We’ve enjoyed a very nice run of late, really too easy.
4-5 million to retire. Medical insurance is the deciding factor on the when. Hoping 60-62.
Thanks @doschicos . I’m trying to get DH to move some assets. When I brought it up tonight he insisted Vanguard MM was FDIC… um. No. This is why I have been in charge.
My advice on calculating retirement funds is to carefully calculate how much you need … then double it. You’ll need much more than you think.
Some cash vehicles at mutual fund companies are FDIC insured. We have it at Fidelity that’s why I referred to some as being indirectly invested in FDIC banks. Here’s the verbiage on how it works at Fidelity, @dragonmom. I’m not sure if Vanguard has something similar or not.
https://accountopening.fidelity.com/ftgw/aong/aongapp/fdicBankList
Same as @doschicos. We have about four years living expenses in cash as we consider these our “retirement-lite” years. We don’t want to start dipping into investments until we’re 65 and start taking one SS stream. But, yes, we also want to wait out this market and administration. I retired last April and DH “retired” on a six-month LOA in June. In December, just before the LOA was up, he decided to take a short-term consulting gig and is considering doing a few more of these just to extend the cash reserve while we wait-and-see what is going to happen here in bizarro world.
@dragonmom, I think that’s wise. I don’t personally regard FDIC coverage as a deal breaker, but have significant amounts of bond funds at brokerages and I-bonds at Treasury Direct.
Our cash is in our USAA discount brokerage account. DH says the checking accounts at investment houses are usually FDIC insured but the investment accounts are not. That is true for our USAA account.
Is that four years of cash in hand on top of pensions?!?
Waiting out this administration has been a costly move for many. The market is up how much, 40% since the election? And could potentially go way higher if the economy takes off even further, with mounds of tax breaks given to companies, and dividends, expansions and buybacks inflating the market. And you might have to wait another four years longer than you’d like.
A number of people I’ve talked to have pulled much out of the market a year ago or much longer. Many seem to regret it, but are still waiting for the big crash. However, even when the big crash comes, it’s likely to still be far above where they pulled it out. Timing the market and waiting out administrations (even ones you dislike and distrust) seems like a potentially huge loss. Nothing wrong with having adequate cash on hand, but timing the market seems next to impossible.
I asked DH about keeping living expenses in cash- he says we have plenty of liquid assets, and have some $ in cash but he felt 4 years of liquid (cash) was unnecessary.
“Is that four years of cash in hand on top of pensions?!?”
What’s a pension? JK. Many don’t have them. We certainly don’t.
" Nothing wrong with having adequate cash on hand, but timing the market seems next to impossible."
I don’t see it as timing the market really although we did up it a bit given the fast run-up in equities. I see it, for my purposes, as more of a strategic asset allocation barbell. The overwhelming portion of assets in my case are still invested in equities (still plenty of skin in the game) and we outperformed the market slightly last year.
DH thinks that if the market drops, it will drop around 10%.
We have a chunk of cash that we plan on turning into a piece of real estate. We were waiting for the tax “reform” to shake out to decide whether we wanted to turn it into an investment of some sorts or to pay off the mortgage. Otherwise, Mr B would never, ever have cash. Stocks all the way for him. Hopefully, the recent expenses convinced him that having some cash is not a bad idea.
I have been trying to convince my husband to move more from his 401K money market/bond fund (pays about 2%) to stock funds. I think he still has about 18% in there, and the rest in equity funds. I have about 8% in that low return fund. I don’t like seeing my account gain in value so much above his. We don’t plan to withdraw from the funds for a long time, so why not dollar cost average aggressively instead of keeping it safe?
I think one also has to consider where you are in terms of income, job security, and in terms of closeness to retirement. In my case, I am an early retiree. In @ChoatieMom’s case, she is as well and her husband is kind of, with a foot still in the door doing some consulting. Therefore, IMO, it makes sense to have a chunk of cash to ride out a few years of any correction. For those with good incomes, especially if that income exceeds current expenditures AND appears to be ongoing (finding a comparable replacement for a lost job can be tricky for many past the mid-40s) and you are more than a few years away from retiring, so much cash cushion might not be warranted.
Maybe so, but still, even if the market crashes, good investing would lead to a better overall financial outcome than a lot of money sitting earning no interest. If the market drops 10%, but the overall investments hat initially earned 15%, its still a net gain.