When will you turn equities to cash for retirement?

Tiger_comments
03-15

As individuals age, it's commonly advised to decrease stock holdings and increase safer assets.

A rule of thumb suggests holding a percentage of stocks equal to 100 minus one's age.

For instance, a 60-year-old might hold 40% stocks.

According to the data from Empower as of October, 2023,

Investors in their 20s and retirees over 70s place a higher percentage of their assets in cash (31.5% - 41.7%) than any other age group.

$Tiger Brokers(TIGR)$

When will you withdraw your money from stock account for retirement?

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# When will you turn equities to cash for retirement?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • MHh
    ·03-15
    TOP
    This is really just a rule of thumb with the general understanding that risk appetite should decrease with increased age. However, everyone should decide for oneself how much risk is acceptable. One can be very young yet hold only a small percentage in stock and higher percentage in bonds if one is uncomfortable with paper losses.


    It also depends on the macro situation. For example, in the last 2-3 years, bonds and stocks have both gone down and fixed deposits offer fairly reasonable returns of 3-5% annually. In this case, cash is probably better than even bonds.


    Additionally, not all stocks are the same. Generally, people invest in US stocks for capital gains and SREITs for dividend income. The runway to returns for developing economies tend to be longer than developed markets.


    Thus, when I’m closer to retirement, i would rotate away from developing countries to SREITS and take profit from US market. I dont think i will ever withdraw entirely from the stock market.
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  • Universe宇宙
    ·03-15
    TOP
    When will you withdraw your money from stock account for retirement?

    @TigerGPT @LMSunshine @MHh @Shyon @icycrystal @DiAngel @melson @Mrzorro @Aqa @rL @SirBahamut @SirBahamut @HelenJanet @GoodLife99 @pekss @Korer

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    • TigerGPT: 

      As an AI financial analyst, I don't have personal retirement plans or the ability to withdraw money from a stock account. However, I can provide some general guidance on when individuals may consider transitioning from equities to cash for retirement.

      The decision to shift from equities to cash for retirement depends on various factors, including individual risk tolerance, financial goals, and market conditions. Here are a few considerations:

      Time Horizon: As retirement approaches, individuals typically have a shorter time horizon to recover from potential market downturns. Therefore, gradually reducing exposure to equities and increasing cash holdings can help protect against market volatility.

        

      Risk Tolerance: As individuals age, their risk tolerance may decrease. This is because they have less time to recover from potential losses. Shifting to cash or more conservative investments can help preserve capital and provide stability during retirement.

        

      Diversification: Maintaining a diversified portfolio is important at all stages of investing. Even during retirement, it's advisable to have a mix of asset classes, including cash, bonds, and equities, to balance risk and potential returns.

        

      Income Needs: Consider your income needs during retirement. If you rely heavily on investment income, it may be necessary to maintain a portion of your portfolio in equities to generate higher returns. However, it's important to strike a balance between income generation and capital preservation.

        

      Market Conditions: Market conditions play a crucial role in determining the timing of transitioning from equities to cash. It's essential to monitor market trends, valuations, and economic indicators to make informed decisions.

        

      Ultimately, the decision to transition from equities to cash for retirement should be based on individual circumstances and financial goals. It's advisable to consult with a financial advisor who can provide personalized guidance based on your specific situation.

      Please note that the information provided is for reference purposes only and does not constitute investment advice. Investing involves risks, and it's important to conduct thorough research and consider professional advice before making any investment decisions.

      03-15
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  • icycrystal
    ·03-15
    TOP
    in general, this may be the rule if thumb - "rule of thumb suggests holding a percentage of stocks equal to 100 minus one's age"...

    I think it would also depend on your risk tolerance. also, depending on your financial health at that point in your life.

    it's always important to have risk management and ensure that you have  [USD] [USD] [USD] for emergencies.

    @Shyon @Aqa @GoodLife99 @Universe宇宙 @rL @LMSunshine @koolgal @HelenJanet @DiAngel

    When will you withdraw your money from stock account for retirement?


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  • Aqa
    ·03-17
    [Happy][Happy]🥬🍤🍉🍓Active Ageing upon retirement - Eat and spend and be merry. One of the easiest to remember and therefore common rules of equities/ cash allocation is holding a percentage of stocks equal to 100 minus one's age. For example, a 60-year-old might hold 40% stocks and 60% cash. I find this sensible because our average age of mortality is still lower than 90. Retirees should eat well and live well. Time to spend the money! [Happy][Happy]
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  • nomadic_m
    ·03-16
    in NZ, dividends are considered income, therefore taxable. not the best idea to live off dividend if retiring here. alternatively, would probably chaching a lump sum every now & then to cover expenses. anyway, still another few decades to go, hopefully by then there are more options available
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  • jhtiger
    ·03-16
    when I'm closer to retirement or retired I wouldn't want excessive volatility as I wouldn't have the time to ride it out, so yes I'd hold more cash as I approach that age
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  • MilkTeaBro
    ·03-16
    my dividend stocks portfolio likes saving accounts with high interest rates, I don't worry about it. I only control the position, bull market, low position, bear market, high position.
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  • Fenger1188
    ·03-16
    谢谢 @Tiger_comments 我不会在退休后把股票变成现金，因为我相信投资股票能赚到钱，一晃加入老虎证券900多天了，老虎证券在我的投资组合里， 现在呈现亏损不过我一点也不慌，期待3月20日的到来， 我相信这一天老虎证券会发布好消息😃。目前这只股票被低估了，我相信在不久的未来将会给我带来丰厚的回报😎。有人愿意陪我一起搭上这趟列车吗？愿大家天天开心，身体健康，股票大涨，早日实现财务自由❤️
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  • DiAngel
    ·03-15
    I m in the process of selling off my US ESPP shares to avoid family paying 40% estate tax in the event I RIP.Not for retirement purposes but estate tax. As most of you are aware that any amount in excess of USD60K, there is an estate tax of maximum 40%.To make life easier for my family members, i m slowly selling off my ESPP.I dont think it is worthwhile engaging lawyer to bring my USD back to the estate.Why not i do it myself while i m still alive and use it to invest in SG stocks where i park them in CDP as they are transferrable - as long as you list the beneficiary in the will.


    I m on track with my 2024 KPI SG dividend as this week I hoot $UOB(U11.SI)$ and $ocbc bank(O39.SI)$.[Happy][Smile][Chuckle]


    I was so close [Anger][Facepalm][Angry]with $Suntec Reit(T82U.SI)$ to average my cost. It’s ok.There is always a next time or “Tomorrow” from Annie musical play.


    “The sun’ll come out
    Tomorrow
    Bet your bottom dollar
    That tomorrow
    There’ll be sun”


    [LOL][Tongue][Grin][love you][Heart]
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  • SR050321
    ·03-15
    I like stock market, i intend to keep SG blue chip dividend for passive income during my retirement. Sometimes money no enough i sold my stock to purchase another stock thingking to buy back later, i sold 12.95 $ocbc bank(O39.SI)$ it did not go lower again so not able to buy back as of now, and dividend is coming soon 😅
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  • Bonta
    ·03-15
    Depends on type of stocks that are being held. There isnt any need to sell dividend stocks if the dividend returns is higher than retirement yearly needs. But dividends can be lumpy, meaning some months have more and some months lesser depending on concentration of stocks held. If done correctly, a dividend stock portfolio is effectively a retirement account, with capital left intact.


    However, if the stocks dun pay dividend, selling call options on them, will do the same trick as dividend stocks. [Cool][Cool][Cool]


    Dun see the need to follow the so called advise to change stocks to cash. [Cool]
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  • ECLC
    ·03-16
    Continue trading in retirement if healthy; stop and withdraw from stock account for huge medical payment.
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  • Jemsationz
    ·03-16
    Good and thoughtful comments! Will consider decreasing stock holding as we get older!
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  • 爱上投资学
    ·03-15
    60岁左右吧！等到无法工作的时候再提出来
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  • highhand
    ·03-16
    60 to 65 earliest. need 20 years to get 100% win rate for stocks.
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  • Success88
    ·03-15
    CPF and extra stock investment for dividend can retired comfortably
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  • MasterStonker
    ·03-16
    50-50 is for me then 😊
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  • Alex Puffin On Two Smokes
    ·03-15
    idk [Cool] [Cool] [Cool] [Cool]
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  • KSR
    ·03-18
    👍
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  • RT2022
    ·03-15
    No i will not
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