Comments on: Building a Retirement Emergency Fund http://gotoretirement.com/2008/12/building-retirement-emergency-fund/?utm_source=rss&utm_medium=rss&utm_campaign=building-retirement-emergency-fund A Baby Boomer's Journey from Retirement Planning to Retirement Living Tue, 31 Jan 2012 12:54:48 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Retirement Planning http://gotoretirement.com/2008/12/building-retirement-emergency-fund/comment-page-1/#comment-74 Retirement Planning Fri, 19 Dec 2008 10:54:07 +0000 http://gotoretirement.com/?p=388#comment-74 You have nailed home an excellent point. I got suckered into being impatient during the 1st 10 year thing and sold off a large chunk of my unit trusts. Had I waited, (its 5- 6 years later as at now), I’ll probably be doing an unga-unga dance of joy every time I do my new worth calculations. Since then I have been preaching never to sell, and your maths based proof will be something I’ll now add to my sermon. Thanks Rose. You have nailed home an excellent point.

I got suckered into being impatient during the 1st 10 year thing and sold off a large chunk of my unit trusts. Had I waited, (its 5- 6 years later as at now), I’ll probably be doing an unga-unga dance of joy every time I do my new worth calculations.

Since then I have been preaching never to sell, and your maths based proof will be something I’ll now add to my sermon.

Thanks

Rose.

]]> By: Mr. GoTo http://gotoretirement.com/2008/12/building-retirement-emergency-fund/comment-page-1/#comment-73 Mr. GoTo Fri, 19 Dec 2008 05:05:49 +0000 http://gotoretirement.com/?p=388#comment-73 Dave: I've heard of this bucket approach but had forgotten where it originated. Thanks for the tip - I will need to check it out. Dave: I’ve heard of this bucket approach but had forgotten where it originated. Thanks for the tip – I will need to check it out.

]]> By: Dave http://gotoretirement.com/2008/12/building-retirement-emergency-fund/comment-page-1/#comment-72 Dave Fri, 19 Dec 2008 04:29:33 +0000 http://gotoretirement.com/?p=388#comment-72 This is a similar approach Ray Lucia takes in his "Buckets of Money" book. You decide on a reasonable percentage of your portfolio you want to take out every year i.e. 3-5%. You then divide your retirement money into three "buckets." The first bucket is for "safe" investments i.e. money market funds, CDs, short-term bonds, to last seven years. The second "bucket" holds intermediate term investments i.e. a Total Bond Market index fund, GNMA fund and perhaps a balanced equity-bond fund, to pay for the next seven years. The third "bucket" is U.S. and International stocks and a dollop of REITs. This bucket is untouched for 14-15 years allowing it to grow enough to replenish your first two buckets and start over again. This way, a bear market, even a vicious one, won't derail your retirement plans. This is a similar approach Ray Lucia takes in his “Buckets of Money” book. You decide on a reasonable percentage of your portfolio you want to take out every year i.e. 3-5%. You then divide your retirement money into three “buckets.” The first bucket is for “safe” investments i.e. money market funds, CDs, short-term bonds, to last seven years. The second “bucket” holds intermediate term investments i.e. a Total Bond Market index fund, GNMA fund and perhaps a balanced equity-bond fund, to pay for the next seven years. The third “bucket” is U.S. and International stocks and a dollop of REITs. This bucket is untouched for 14-15 years allowing it to grow enough to replenish your first two buckets and start over again. This way, a bear market, even a vicious one, won’t derail your retirement plans.

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