Retirement Finances May Become Challenging ... Again.

When I retired early in 2007, the stock market made the future look bright.  We were about 80% invested in equities.  I expected our investments to perform extremely well.  Instead, the 08/09 bear market reduced are retirement account by 44%, which was catastrophic.  We spent until late 2013 clawing our savings back to the 2007 levels.  It was a very challenging time.

Fast forward 10 years to 2017.   Again, the stock market is making the future look bright.  However, this time I am much less optimistic and more cautious about our investments.  We can't afford another downturn of 44% in our retirement savings.   I no longer have the wherewithal nor stamina to withstand the decline and make the subsequent recovery.

So, I am consciously not adding any additional funds to equities, and taking profits in specific positions, where possible.   Still, we are not exiting the stock market, but targeting for only 25% exposure to equites.  That way a 50% decline will only result in a 12.5% decline in our retirement savings.

A 12.5% decline, while not desirable, will be challenge that is not insurmountable.

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This is not financial advice. Please consult a professional advisor.

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