I think, like many, that an economic correction has got to be in our future... of course, I’m close to clueless.

I have a 457(b) account that I put about 10% of my earnings in every check via pretax deduction. This account is the 2nd layer of my retirement plan, the first being a 3% @ 50 pension.

The current plan has me tapping that as soon as I am able, at age 44, and popping smoke. It’ll give me about 50% of my highest paying year at that age, probably enough to pay for all life’s necessities where we hope to move to.

The 457 is just additional. I began that account the day I was elligiable 12 years ago. When I sat down with the company rep he suggested I go very aggressive for the significant portion of my portfolio given my age at the time. It’s done very very well. At what point, though, do I move away from being aggressive/risky and more conservative?

To the best extent possible I’d like to limit the damage of an upcoming downturn due to my more limited time to recover. I remember during the last big correction when the housing bubble popped some senior people at work took absolutely huge hits to their accounts and they never really recovered because retirement was too close. That’s the situation I am concerned about now.

How old are you now?
Own your home?
You mentioned moving, can you afford a different home where you are moving to?
I believe you said you will be quiting the current job at 44, do you plan on getting another?
What other investments do you have?
How likely is it that the current company will be able to make your pension payments over the next 40+ years?

Most importantly, will you be needing the 457 money in the next few years?

We have a money mgr. that makes those suggestions. It's up to us to decide yes or no. So far we went with what he said and its worked well. We've been retired 11 years and no regrets. Guess my point is you need a good mgr. that is constantly looking at your situation.

quote:

Originally posted by trapper189:
How old are you now?
Own your home?
You mentioned moving, can you afford a different home where you are moving to?
I believe you said you will be quiting the current job at 44, do you plan on getting another?
What other investments do you have?
How likely is it that the current company will be able to make your pension payments over the next 40+ years?

Most importantly, will you be needing the 457 money in the next few years?

36 now, we own a home in CA and have probably 100,000 in equity (at current market, but I expect those prices to fall again).

We should be able to easily afford an appropiate home where we plan to go, with a substantial down payment (60%+, if the market here holds out). If the market drops here we can still afford a home there, just maybe not quite as nice. All this would be without a job on the flip side.

However, it is most certainly NOT in my plan to fully retire at 44. In the next 8 years I will be getting a degree and seeking a second job or career in our new location.

Other investments: nothing to speak of... just the house, pension through work, 457(b) account, term life through work.

Currently the pension system I fall in is incredibly robust and healthy. They have a fantastic track record for decades now. It is well run and they've given the max 3% COL increase every year, for just about ever.

457 account balance is for retirement purposes and I don't need to access it until then. I suppose some sort of emergency might change that, but I have other supplemental insurances through work as well, such as accident insurance, critical illness, as well as basic life, accident, and illness insurance for my wife and all kiddos (low levels).

quote:

Originally posted by kramden:
We have a money mgr. that makes those suggestions. It's up to us to decide yes or no. So far we went with what he said and its worked well. We've been retired 11 years and no regrets. Guess my point is you need a good mgr. that is constantly looking at your situation.

The account is handled by Mass Mutual. I imagine I have someone there assigned to my employeer, but frankly I've not paid attention to the account much. I set it up when I was hired and only looked at it a handful of times in the last 12 years. My last contact with them was about 9-10 months ago when I rolled a very small 403 account into my 457. At the time the feller said my account was doing really great except for the downturn that everyone had last spring. But even after that he said my inception to current growth was something like 75 percent? I don't quite remember (and I am not well-versed in finance or economics) but he said it was going gangbusters.

I would start with how much $ you have and how you figure you will need for how long.
Do the math. They are many tools out there.
At your age you will need some growth.
Sounds the income now portion should be more conservative and the use much later should be invested more for growth.
Principal retention is a prudent component in my mind.

quote:

Originally posted by old rugged cross:
I would start with how much $ you have and how you figure you will need for how long.
Do the math. They are many tools out there.
At your age you will need some growth.
Sounds the income now portion should be more conservative and the use much later should be invested more for growth.
Principal retention is a prudent component in my mind.

What do you mean by "income now"? The 457 is all income later, in my mind... I'm probably just confused about what you mean.

You really need to meet with a professional advisor, who can make specific recommendations based on a complete understanding of your goals and current overall financial situation.

I prefer fee-only advisors, who are paid only by their customers and receive no commissions or incentives based on the vehicles/products they recommend.

At 36....even at 44, I'd be careful of going too conservative. Think about your life expectancy. 85? 90? You need some growth in those many coming years.

At your age, I'd also strongly consider opening your own brokerage account and get into some strong dividend paying companies and reinvest those dividends. Look at strong, blue chip companies that have a strong balance sheet, healthy dividends with a history of increasing their dividends. At your age and with several of those in your account, you can look toward those dividends as a healthy income when you do retire.

quote:

Originally posted by 6guns:
At 36....even at 44, I'd be careful of going too conservative. Think about your life expectancy. 85? 90? You need some growth in those many coming years.

At your age, I'd also strongly consider opening your own brokerage account and get into some strong dividend paying companies and reinvest those dividends. Look at strong, blue chip companies that have a strong balance sheet, healthy dividends with a history of increasing their dividends. At your age and with several of those in your account, you can look toward those dividends as a healthy income when you do retire.

You know, I'm a little ashamed to admit this, but your comment makes me realize I've only been looking at this from the position of how many years left I have to work (and pay into the 457)... I hadn't before made the connection that I wouldn't actually pull from that particular account until years after retirement...

I guess I should consider the option of moving the funds from the 457 to a different account type that I can continue to contribute to even after I leave my current employer. I don't know what that is, but I've got lots of time to figure that out.

As far as your comments about investing through a brokerage account, its pretty much greek to me... I wouldn't even know where to start. I would need an education... How much money is one talking about needing upfront to get something like that going and make it worthwhile?

I had always paid a fee to have someone else manage my 401K account when I was working, and was very pleased with the results. When I retired a little over four years ago, I rolled my 401K over into two IRA accounts, one is a Roth IRA as I did pay taxes on half of my allotments, and the rest is now in a traditional IRA. I still am paying a money management fee, and it is doing very well, considering the fact that I no longer contribute a penny anymore to it.

thumper, lots of info here:

https://www.fool.com/how-to-invest/index.aspx

I am not a financial adviser but one held strategy is your age in bonds and adjust depending on your comfort level.

I locked in a retirement at 50, as did my wife. We both maxed out another voluntary contribution plan. We're living well on our minimum retirements, so we are still very aggressive in our "retirement" portfolios. I also worked a second job for 12 years, building it up. Hopefully it's enough to pay for nursing care when I get old.