Gunfighter

Inflation is a big risk. I’d be investing in:

-Dividend stocks
-Class B apartments

Planetrain

I’ve been considering putting some “cash” in government iBonds. The fixed portion of the rate will reset in May and should be a little higher. The variable portion floats based on inflation.
The benefit to these are they are state tax exempt and should be a higher ROR than TIPS.
The downside is the max you can buy is $10k/SSn a year, and redeeming early forfeits 3 months interest.
To me these seem as safe as a CD/Money market, but maybe a little higher rate or return with tax efficiency. Anyone ever get into these?
https://treasurydirect.gov/indiv/res...res_ibonds.htm

#threaddrift

tennisguru

You're right, it is hard to think about how I'd act 30 years into the future, but at least for now I'm fairly certain of 2 things. First, assuming a retirement at age 65, it is very possible that either me or my wife or both could live to 95, so that's still a 30 year time horizon (almost the same horizon from today until my retirement). Second, given where I am now and projecting things forward, it's likely that I will end up with a net worth exceeding $10 million (in todays dollars, I know). Those 2 things tell me that the non-real estate portion of my portfolio will still be heavily weighted towards stocks. By dialing back risk I would tend to have more in lower risk mutual funds, even just an S&P index fund or something similar, as opposed to a broader array of higher risk, higher return mutual funds I hold today. I also plan to be able to have enough cash + real estate income to be able to go through a 2-3 year downturn without needing to pull a penny from investments to allow time for the values to recover. I would imagine that the majority of the money I have at age 65 will not be spent by me or my wife, but rather will pass on to our kids and grandkids to build generational wealth.

JamesBond

Duuuuuuuude... 1.68%??? I had some years ago. The rates are horrible and even after a reset they won't be worth anything. You can do so much better. I just happened to be looking at a Vanguard statement and the Short Term Investment Grade Admiral Fund (VFSUX) has an estimated yield of 2.22% and that is waaaaaay more liquid than government bonds. (Still has the end of day settlement of mutual funds). dyodd this is not investment advice, etc etc etc

JamesBond

Take this for what it's worth, but were I in your shoes at your age, I would get absolutely as much money as I can into ROTHS and into real estate. Even at 60 I am thinking about it, but the tax ramifications could be a yuge winner when you retire. The leftists are gonna rape you if you don't shelter as much as you possibly can because 30 years from now $400k is chump change. (dyodd, not investment advice, etc etc etc)

Planetrain

You make some great points, but 2/3 of that fund is non-government-backed bonds. I think that would fit in well to an overall portfolio, but I liked the iBonds lower risk for the “cash” bucket. (No admin fee, no state tax drag) YMMV, DYOD, etc.

m3113n1a1

I find myself agreeing with you more and more everyday! Roth as much as you can, invest in equities in your 401k, keep cash outside of your retirement accounts, diversify by adding real estate or similar income producing and appreciating assets.

Big E 757

This is as important as anything else when it comes to retirement planning. I flew with a Captain approaching retirement years back and he told me “when you think you have enough saved for retirement, save 4 years worth of cash in a CD or other low risk savings vehicle.” That way, if a down turn occurs you can live off of your savings until your investments recover. The average 10+% pullback in the markets historically only last 2 years so that will fund your spending for two corrections in your retirement years without realizing any losses. Real Estate income coupled with non retirement savings is the same thing and a great plan!

tennisguru

That is pretty much what I’m doing. Haven’t gotten big into real estate yet but that will come. Definitely hitting the ROTH hard.

Chakerik

Agree with the Roth...only thing that scares me is in 30, 40, 50 years if the gov decides to come for it and say "actually now its taxable " and Essentially we get double taxed down the road...