Jim and Pam’s Investing Plan For Retirement

Nov 19, 2021 | Blog Post, Retirement Planning

It’s Jim and Pam from cold (Northern State) here. We hope all is well with you and your family.  After speaking with you in late August, we both decided to retire in early October.  It’s amazing how much less stressful life has become. It’s great not dreading the COJs!  We are both very thankful for confirming we don’t need $4 million dollars to retire like one financial advisor told us. 

I’ve been watching some of your videos and thinking about the future; specifically the sequence of return risk.  Pam and I have won this retirement game so why keep “gambling” in the market, right?  Accumulation versus De-accumulation, FOMO versus FOGO, Risk versus Reward…..  It’s hard to stop being in the Accumulation mindset. It’s hard to stop being in the FOMO mindset.  It’s hard to stop being in the Risk Taking mindset.  If I don’t change my mindset, I’m afraid we might run into the risk of the sequence of return devil.   

Given that we have won the retirement game and our fear of sequence of returns, we will sleep better at night if we adjust our investment strategy.  Below is an idea on how to allocate the retirement funds to help me sleep at night.  What are your thoughts? 

20% cash (cash in bank and cash reserves in my 401k) 

5% Vanguard IPS (VAIPX in my 401k) 

60% Vanguard Wellesley (VWIAX)

15% Vanguard Wellington (VWENX)

For what it’s worth, I ran this strategy through Portfolio Visualizer and Dan Kulibert’s Bucket Spreadsheet and never ran out of money using several different start date scenarios.


Jim and Pam (Retired)

What do I think of their portfolio? I love it! What’s not to love? Moderately conservative, with about 35% or so in stocks. Lots of cash to ride out any craziness that might come and bonds for a bit more return than the cash. Almost like a 3 BUCKET retirement portfolio, no? Cash, Bonds, Stocks? Works like a charm if you ask me for its simplicity, relative safety and of course LOW FEES.

Remember folks, just because they’re investing like this now doesn’t mean they must keep the same portfolio for the rest of their lives. Situation dictates is what we used to say in the infantry. What that means is when the situation changes, well, it’s worth investigating if you should change your strategy too.

In Jim and Pam’s case, say the stock markets fell 45%. They’d probably escape that with just a few bruises but nothing devastating. Tough not to think it’d make sense to move some of that Wellesley over to Wellington to take advantage of the low stock prices. So, they should keep their eyes and ears open.
(By the way- everyone and their mom says “don’t time the market”, well, my friends, it’s NOT timing the market if you move some of your safer assets into stocks when the market falls significantly. That’s actually called BUYING LOW and the first thing you learn in investment school is to BUY LOW AND SELL HIGH.)

The most important thing of course when it comes to retirement is to ENJOY YOURSELF. It’s awful hard to do that if you’re awake all night worried about the markets. Don’t do that to yourself.