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HUGE sell off today!

Home The Lounge HUGE sell off today!

  • Avatar Tim 
    Participant
    Status: Accountant
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    Joined: 09/18/2018
    There are large groups of people out there sharing, assessing and debating things in the world that will have some very cool outcomes eventually.

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    And there will be some not to cool outcomes due to intended/unintended consequences.

    #241304 Reply
    Avatar burritos 
    Participant
    Status: Physician
    Posts: 536
    Joined: 04/23/2018

    Anyone rooting for a correction? I’m not, but for anyone who is still DCAing, it’d be beneficial.

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    Always. Why would an accumulator hope for anything besides?

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    Because some non accumulator might get fired due to the downturn, take it out on their kids or family or commit suicide or etc…

    #241319 Reply
    Lordosis Lordosis 
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    Status: Physician
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    We are getting close to the point where getting caught hoping for an economic downturn causing another to harm themselves will be a crime but we are not there yet. Careful with what we say because that might be the law in the future and they will come back to get us on 9 points removed assisted suicide.

    “Never let your sense of morals prevent you from doing what is right.”

    #241335 Reply
    Avatar Larry Ragman 
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    Status: Other Professional
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    Joined: 08/30/2018
    I did this recently. I have a three year window to retirement, and I have to cash my 457f when I retire. To avoid the possibility of that potential forced loss in a down market I have shifted that account to bonds, and adjusted elsewhere to keep 60:40 overall. Bottom line, I am now comfortable to whether any stock down turn…

    @Larry_Ragman, just wondering – does the fact that you need to liquidate your 457f change your plan? Iow, if you happened to be 100% equity in a well-balanced portfolio and had to liquidate when the market was down 30%, wouldn’t it work both ways? Meaning that if your plan doesn’t require you to spend that $$ when you liquidate it, wouldn’t you simply take advantage of the same low prices and reinvest?

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    Johanna, that is a helpful question to clarify my intent. In your hypothetical the answer is that if I planned to keep those funds invested then it would make perfect sense to purchase essentially the same funds in taxable on retirement when the 457f is required to be liquidated. So, it is not just that the 457f must be liquidated upon retirement, it is also that I actually then intend to spend the funds. That is, I’ll use it as the bank and replenish annually from my diversified investments (or just use the cash and hold off refilling the bank if the market is down significantly). So, I want to lock in the cash amount now in bonds.

    #241375 Reply
    Lordosis Lordosis 
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    457s are an interesting thing. How do you plan to draw yours? Are you going to try to draw estimated expenses until gone? Less and supplement with taxable? Or more just to deplete it and invest the excess? I got a long way to go to figure that out for myself.

    “Never let your sense of morals prevent you from doing what is right.”

    #241378 Reply
    Avatar Tim 
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    Status: Accountant
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    Joined: 09/18/2018

    “I got a long way to go to figure that out for myself.”
    Sketch out your plan might be considered a reasonable suggestion.
    Airplane takes off
    Airplane reaches cruising altitude.
    Airplane decends and lands.

    I am not suggesting you write your own obituary, simply a long range plan. It helps one stay on course when turbulence is encountered. You can always improve your plan if one runs into headwinds or tailwinds.

    Helps knowing how to land once you take off! Just a thought. A simple outline to be filled in later.

    #241384 Reply
    Liked by Lordosis
    Lordosis Lordosis 
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    Status: Physician
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    I have a plan. I just don’t know if it is a good one. Also there are a ton of variables at this point. Will I even be working for my current employer in 20-25 years? Will they appear to be in financial trouble? Will I have unexpected expenses? Lots of things. But hearing others plans along the way can help me fine tune mine along the way.

    “Never let your sense of morals prevent you from doing what is right.”

    #241391 Reply
    Liked by fatlittlepig
    Avatar Larry Ragman 
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    457s are an interesting thing. How do you plan to draw yours? Are you going to try to draw estimated expenses until gone? Less and supplement with taxable? Or more just to deplete it and invest the excess? I got a long way to go to figure that out for myself.

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    I have two 457s. They are quite different. The 457f I referenced above is in a rabbi trust. Employer contributes a percent of my salary every year and each contribution vests after a set number of years. Taxes due upon vesting. All vested funds must be withdrawn immediately upon retirement. See above on how I plan to use it. (Trust keeps all nonvested funds when I retire.)

    My second is a more traditional nongovernmental 457b. I contribute all these funds up to the IRS limit each year. Immediately vested but subject to employer credit risk. Many choices offered by my plan for distribution: from withdraw all at once to equal payments over as many as 15 years. But I have to make the election after retirement and I am required withdraw it. I intend this money to bridge from retirement to SS at 70, so I will take equal withdrawals for however many years that turns out to be. Note, I will withdraw this money over several years to manage taxes. I will invest any monies that I don’t need for expenses.

    #241396 Reply
    Liked by Lordosis
    Zaphod Zaphod 
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    Status: Physician, Small Business Owner
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    This veered oddly.

    I’m building my 457 up as a severance pay account, a few months and no bigger.

    #241448 Reply
    Liked by billy, Lordosis
    Avatar MaxPower 
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    @zaphod why only a few months worth?

    I have a non-governmental 457 with excellent fund (Fidelity) and distribution options (over as many years as I would like upon separation). I also am looking at it for now as a severance package, but plan to withdraw it in the first 6-8 years after retirement (assuming I stay here my whole career) as a bridge from early retirement to withdrawing my 403b funds, and then SS.

    The tax break, for me, is to tough to pass up.

    Sorry for the diversion down the rabbit hole.

    #241450 Reply
    Zaphod Zaphod 
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    Was thinking I didnt want to risk more than 4-6 months of needed expenses, moving, etc…just in case. Im not there yet so we’ll see what I do as it will be hard to pass up the tax break. I also have decent funds, but the idea of a hospital going under, etc…while mine seems to be in excellent fiscal health, that of course could change. Dont know, but currently the thinking.

    I like your idea though, thats definitely a good way to look at it.

    #241478 Reply
    Avatar Larry Ragman 
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    Was thinking I didnt want to risk more than 4-6 months of needed expenses, moving, etc…just in case. Im not there yet so we’ll see what I do as it will be hard to pass up the tax break. I also have decent funds, but the idea of a hospital going under, etc…while mine seems to be in excellent fiscal health, that of course could change. Dont know, but currently the thinking.

    I like your idea though, thats definitely a good way to look at it.

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    But if you are really worried about your employer’s stability, I actually think it is reasonable to forego a nongovernmental 457b in favor of taxable. It is just a cost-benefit analysis. Tax deferral is hard to pass up (and obviously I did not), but more of nothing is nothing.

    #241484 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
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    Joined: 01/12/2016

    Was thinking I didnt want to risk more than 4-6 months of needed expenses, moving, etc…just in case. Im not there yet so we’ll see what I do as it will be hard to pass up the tax break. I also have decent funds, but the idea of a hospital going under, etc…while mine seems to be in excellent fiscal health, that of course could change. Dont know, but currently the thinking.

    I like your idea though, thats definitely a good way to look at it.

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    But if you are really worried about your employer’s stability, I actually think it is reasonable to forego a nongovernmental 457b in favor of taxable. It is just a cost-benefit analysis. Tax deferral is hard to pass up (and obviously I did not), but more of nothing is nothing.

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    They are in a good position, Im not too worried, but as the amount gets larger and larger I certainly would start to have more concerns. Its 19k a yr right now, so it will be years before I give it up.

    #241487 Reply
    Liked by Tim
    Hank Hank 
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    Keep in mind, the permabears have successfully called eleven of the last five downturns.

    #241697 Reply
    Avatar Tangler 
    Participant
    Status: Physician
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    Joined: 08/23/2018

    Still, I think the most reasonable risk adjusted approach, given the unpredictability of the market, is if you don’t like AA then change it to one you can stick with in a down market and keep buying. DCA consistently into a diversified AA will make you rich more slowly that macro driven big move, but with less risk that you will make a bad call if you let what appear to be trends drive your investments.

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    Which is what I have currently. A lot of bonds where there was once none. Going to cash or trying to exactly time a swing one way or the other is foolish.

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    exactly!

    #241711 Reply

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