Ask Terry Questions We’ve reached our number, now what?

We’ve reached our number, now what?

By Terry Savage on August 27, 2014 | Financial Planning / Retirement

Hi Terry, all these years listening to your words and I finally have a question! Beth and I have 2 mortgages which will be paid in 12 and 14 years. Our plan is to continue working (and saving) for the next 12-14 years, but our current retirement savings is at our number. We have an option to move in and out of Fidelity Cash Reserves and are wondering, “should we preserve what we have and move into cash reserves while the Fed plays this out, or should we just “let it ride” for the next decade?”

We’re currently very aggressive: 20% RERGX EuroPacific, 20% CRIAX SmallMid US, 20% LZEMX Emerging, 20% POSKX Large US, and 20% cash or individual securities. Our HSA and 529 are in index funds. Feeling good about our number but we’re also feeling a little lost.

Terry Says:  Aha!  You’re talking about the multi-TRILLION dollar question — one that everyone is asking these days.  Do you dare leave all your money “on the table” in the stock market, now that it has moved so much.   First, let me say that I do expect the market to move higher than the current 17,000 on the Dow. Until the Fed gets serious about raising rates and reining in credit and sucking money OUT of the economy, there will be plenty of fuel for stocks.

BUT,  common sense dictates that you have some “chicken money” on the side  — even though the Fed is manipulating rates so you don’t get paid to be chicken!  If you’re nearing retirement, my suggestion is to contact T. Rowe Price  800-638-5660 and go through their Retirement Income Planning service.  There is no charge if you have some money there, and you can move some of your stock money to their Equity-Income Fund — my favorite all-time fund, maybe because I’ve owned it for 25 years!   See what they say — based on your ages, financial goals, retirement plans, etc.  That’s the sensible way to reallocate your assets so you don’t look back and wonder “what happened?” when the market eventually does take a deep dip– as surely it will in your lifetime!





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