Only a handful of people working for my employer are over the age of 55. But I've learned that there is always an option!
Nobody on this board is aware of this fact, but I was born and spent my first 12 years of life living in Bangkok, Thailand as my father was the S.E. Asia GM for a large multinational and was based in Bangkok . I speak, read and write fluent Thai, which my parents say I learned before I learned English. My Mandarin isn't bad either, although I haven't used it for over 10 years... @JohnChisum ~ I reckon that you live in Manila? Been there many times and always enjoyed the musical abilities of the Pinoys, as well as their penchant for having fun!
Retirement for this young PopTart is a few decades off, but my wife and I reckon that we could retire to Thailand (probably Chiang Mai as Bangkok is a more expensive city) and enjoy the same quality of life (if not better) as in the USA for a much cheaper cost. Foreigners aren't allowed to own property in Thailand, but condos are available for purchase (after alot of haggling of course!). My wife and I figure on roughly $1000/mo. in expenses as we live cheaply. But nobody really knows what costs will be like 18+ years from now...
Will we actually retire to Chiang Mai? As I mentioned earlier, retirement is still a long ways off as we're raising two young children and have 18 years before we could obtain a Thai "retirement" visa at the age of 50. It's a dream for now, but retiring overseas, especially to a cheaper country which one knows well and likes, is an option to the bygone era of the "American dream".
Peace.

Best Wishes for wise decision making.

Those are all good suggestions. I'd say another step most people forget is doing a basic line item budget and project it into the future. Then determine if their investment profile and assets can support that level of spending.
A second, item is cash flow. The Monte Carlo simulators are good but with understanding cash flow and implementing it properly you can reduce investment risk even more - e.g. budget minus dividend/interest income = $ to or from investments. And you can put several years of estimated spending into low risk investments.
I thought I would be spending $40,000 after taxes. As you can see I'm spending less.
Also, with a projected line item budget you can adjust it annually for changes.

My investment in Vanguard Wellington began almost 30 years ago. Can't find many better and steadier performers.

I could not agree more or think of a better steward of my money than Wellington Management Company.
Mona

Hi Guys,
Wow!
When I first started thinking in terms of an early retirement, I was approaching 60. Thinking and planning for a mid-50s retirement was never in my playbook. Congratulations if you want and can execute that major league feat.
Every case is highly personal, and therefore singularly different.
In my case, my earning and saving career only started after completing graduate school and doing some military service. I was 30 before mustering out of the Army. At that time, my wife and I packed our entire belongings in an old Chevy and headed for California with the back seat still partially empty. No way could we manage retirement in just a little North of 20 years.
But that’s our story, and I’m sure each of you have your own compelling versions. For you younger folks, retirement will be a life changing event, and warrants careful and painful study before a decision is made. I say painful because of the many component uncertainties that feed that decision process.
One tool that addresses some of these uncertainties is Monte Carlo simulators. Monte Carlo analyses were specifically designed to assess risk probabilities under uncertain environments. During World War II, they played a significant role in the development of nuclear weapons. Within the last 2 decades, Monte Carlo simulations have been developed to facilitate retirement planning. These simulators are now readily accessible for all to exploit.
All the large mutual fund outfits offer this tool: Vanguard, Fidelity, T Rowe Price and others provide versions of differing complexity and differing input requirements. They all do yeomen work. I suggest you do a web search using Monte Carlo retirement planning as key words. You can choose your own poison from a long list of options.
One of my favorites is found at the MoneyChimp site. It is certainly not the most eloquent nor is it the most comprehensive option. But it is likely the easiest to input with instantaneous outputs from 1000 randomly selected cases. Here is the Link:
http://www.moneychimp.com/articles/volatility/montecarlo.htm
One of the benefits from these simulators is that what-if scenarios are quickly input and evaluated. Portfolio survival probabilities as a function of retirement time is the graphic output.
Test how significant the anticipated retirement length is to the portfolio survival likelihoods. Check out sensitivity to savings rate. Examine the survival impacts of guesstimated portfolio annual returns and their volatility by inputting various levels for each parameter. All of these sensitivity studies can be completed in quick time.
All Monte Carlo analyses only output probabilities. They don’t predict the future. That’s the nature of future uncertainties. But they provide the user with a feeling for the robustness of his plans and provide guidelines for more attractive options. Please give this working tool a try.
By the way, Monte Carlo simulators might also help retirees to make better informed portfolio asset allocation and drawdown decisions. None of this is perfect, but in the investment universe, nothing is ever perfect.
Best Wishes for wise decision making.

It is a shame that you didn't enjoy your younger years. I try not to tell myself, "just wait until retirement", but I do try to make the most of the present.

OK, maybe I exaggerated a tad. But my 20s did suck. I was a lost and aimless person that lived in abject poverty. But the 1980s were among my best living in the Sierras with sunny days almost 365 days a year. Still, I was the poster boy for "not living in the present" since all I did was focus on the future and retirement. I am just thankful and very blessed that mindset worked so that now I can enjoy the "precious present" as much as I do.

@Old_Skeet introduce me to this fund years ago and I liked the name so I occasionally "check" this fund's "temperature" every now and then. The fund uses a fund of fund approach holding other Columbia funds in various percentages. M* reports its holding as of 2/28/15 as:

I'd like to understand it's present strategy a little better so I thought maybe others could shed some light on its portfolio management strategy. It presently is holding roughly 85% bonds and 4% cash.
Fund Mojo describe the fund this way:
"Columbia Thermostat Z Fund normally allocates at least 95% of net assets among a selected group of stock and bond mutual funds according to the current level of the S&P 500 Stock Index in relation to predetermined ranges set by the investment adviser."
Columbia Fund's Website explain the fund this way:

The fund doesn't seem very interested in the "heat" (of the S&P 500 Stock Index) right now.

That Driehaus paper is excellent. I was interested to see what fund portfolio moves managers are making to try to accommodate reduced liquidity (in addition to or instead of what David Sherman talks about), and found this in the paper:
"Here’s what we’ve done over the past several years to address our concerns about declining market liquidity:
• We continue to hold high cash balances, typically 8% to 20% of AUM, in all of our portfolios.
• When we initiate new positions in the portfolios, we’ve reduced the percentage of a bond issue that we are willing to hold. A year or two ago, we were comfortable holding up to 15% of any bond issue. Now, we prefer not to hold more than 10% of any given issue.
• We model 2-10 points of additional downside in our bear case scenarios ....
• If a bond is a large component of a major etf, we require additional risk premium to own the bond ....
• We are quicker to recognize and hedge downside volatility when liquidity declines, as compared to prior years.
• We consider equity as an investment option in the capital structure more frequently than in the past.
• Finally, we have soft closed strategies well below fund capacities to alleviate liquidity-related stress on existing positions."
The level of perceived risk would seem to depend to some degree on the macro outlook, i.e., a rates-takeoff vs. a lower-for-longer view.

@carminusa: I not clear if your already are invest in Wellington, but here are some Moderate-Allocation Funds suggested by M* If I were you I'd stick with VWELX, 8% + returns for over 86 years.
Regards,
Ted
M* 5 of Our Favorite Moderate-Allocation Funds:
http://news.morningstar.com/articlenet/article.aspx?id=693877

Hi guys (Mark & Scott),
I was off the board most of the weekend and with this I am sorry about the slow response.
You both make some good comments; however, the three year (19.9%) and five year (12.3%) performance for the fund (LPEFX) place it within the top ten percent of its category. During the past year, or so, many private equity firms have been under government review and with this the performance of private equity has somewhat waned.
I think LPEFX is a neat specialty fund to own and it has put some good money in my pocket over the past five years. During this time it has put about 33% of what I have investested back into my pocket plus I am currently carrying 49% in unrealized capital gains. It has indeed been a good cash cow. Plus there is no K-1.
And, although it might not be right for you … for me … it’s a keeper.
Old_Skeet

FYI: After 15 years the Nasdaq Composite Index has returned to its dot-com-era record, just as the bull market is looking tired.
Many money managers warn that U.S. stocks are overdue for a pullback. They are shifting money to stocks in Europe, Japan and even developing countries.
Yet some who correctly foresaw the 2000-2002 meltdown say U.S. stocks are less risky today. Their reasoning: Although stock prices are high, interest rates and inflation haven’t gotten to the levels that killed bull markets in the past.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2015/04/26/why-this-old-bull-market-may-not-be-ready-to-die/tab/print/

It is a shame that you didn't enjoy your younger years. I try not to tell myself, "just wait until retirement", but I do try to make the most of the present.

My mindset was shocked by Black Monday 1987. After a year of investing into a plain stock mutual fund I saw over $2000. dwindle to about $800 overnight. What did I do? I pulled out my money and started educating myself. Within six to eight months I was back in the market, this time better diversified and I knew what to look for. I continued to read and listen to radio financial programs, including Bob Brinker. I didn't always see eye to eye with Mr Brinker but I built a foundation. I felt the tech bubble and saw the euphoria before it burst. My moves saved my portfolio a lot as I was only down about 18%. Then, years of dollar cost averaging. I learned that it is not the amount of money you earn, but the amount of money you spend that matters. Money not spent is more for investing.
I believe bleak moments in history show a path.

Hi Dex,
I made a decision to take an early pension (defined benefit) at age 51 after 27 years of service. If anything will be different for those younger than you and I it will be that defined benefits will not be a common component of retirement.
I will not qualify nor did I significantly contribute to SS. I needed to combine my "defined benefit" with a one time opportunity to buy and "extra annuity" to make my budget work. Budgeting, saving and thriftiness is what has allowed me to consider retirement at 51 and it will be that same attention to personal finances that will serve me well going forward.
I moved to a no income tax state, bought a condo in 2012 for $35K that has tripled in value in three years. I drive multiple 20-25 year old cars...that's plural. I furnished my place mainly by finding good deals on Craigslist and the like.
After 50 I started reminding my 50+ year old friends that:
"Today is our last best day...and tomorrow will be our next last best day."
In other words, If you have a desire to do something...do it today. There are no guarantees when it comes to tomorrows.
Thanks for the thread.

@Junkster, regarding your thoughts on old age, perhaps you are correct in general but remember that stuff happens once you get past the age of 50 or so. I was doing well then all of a sudden I was fatigued. Type 2 diabetes. Diseases have a way of changing your life's course. Anyone can come down with something out of the blue so it's a lottery. I still hold a positive mind though.
I'm not disagreeing with your statement, just adding some additional thoughts. I don't wish for anyone to get sick.
Good to see you here more often lately.

Could not agree more. And keep that positive mind! Superb health or not, I realize I am just as susceptible as any other old timer to a heart attack or stoke or whatever at my age. Still, would never want to relive my youth as life is far better now than ever.

I agree with you there. My older years have been great. I would not want to go back either.
Comment: I wish we could just get the last part of a message using the quote function instead of copying the whole thing. I'll post a comment in tech side. ( I see that it does display what I want. It looked like the whole thing was going to post )

Our only disagreement is about enjoying life when you are young because it will suck at 55+. At 68, life has never been better - both financially and health-wise. No way would I want to go back to my younger years. They sucked!

You get off my lawn also ( the 55+ was for those born after '55).

Dex, love that someone here has finally talked about their annual expenses in retirement. I live in a real low cost of living region of the country and all my *single* friends that are retired live *very* comfortably off $32,000 to 42,000 yearly. Some even travel to wherever. The key is being debt free. Our only disagreement is about enjoying life when you are young because it will suck at 55+. At 68, life has never been better - both financially and health-wise. No way would I want to go back to my younger years. They sucked!

First this is for the younger people. Not the first half of the baby boomers ('14-55) or those older.
Give up the idea of retiring comfortably. You don't have a defined pension plan, little in 401K, social security will be pushed out further, a VAT will be instituted to help with the debt (and Obamacare).
I own my home (no mortgage), truck and travel trailer, single (no debt). I retired in '07 at 51 and since then I averaged $27,000 in spending - that includes health ins and taxes. I'm estimating I will spend an average of $38,000 (includes $30,000 for a new truck) from '16-25.
I did a line item budget for this period. After '25 I grow expenses at 4%
Even with a small pension (13,000) and social security I estimate that only 6 years will be cash flow positive (from pension & SS I'm starting it at 63) starting in '19. I do use conservative estimates for capital growth 5%.
Now the younger people will not have a defined pension and will have to take full SS later or early at a reduced rate. I doubt the workforce will have many 65 y.o. in int or even 62.
The small pension and a good amount of savings that allowed the numbers to work.
So, abandon all hope and enjoy life while you are young. It will suck when you 55+.

@Ted Thanks to the linkster for the kind words. I have been investing in the stock market since the late 90's. (I was a late convert from line of thinking that says investing in stocks is just for gamblers.) Most of that time has been lived in the blue and red zones of the chart above. One important lesson from those years has been that most of my trades during periods of market turmoil have proved to be mistakes when viewed through the rear view mirror. So, I latch onto nuggets like the one above that put things in perspective.

"1. ‘It can’t go up forever,’ or ‘We are overdue for a downturn or a correction.’"
It cannot go up forever, but theoretically, it can go far further than anyone could expect. It really strongly appears to me that Central Banks are absolutely of the view that economic Winter has to be held back at all costs. I'm not saying that they will be successful, but they will push their theories until things get disorderly.
QE (and as I've noted, market didn't even have to go down much and there was a Fed governor the other day talking about the potential for more asset purchases - I thought the market would have to drop 15-20% for that conversation to even start) and ZIRP will not in and of themselves result in a sustainable recovery or fix underlying problems that need to be addressed.
This is not saying that stocks can go up forever, but there's a lot of variables and reflation or bust clearly seems to be the theme of central banks. Again, I'm not saying that stocks go to the moon, I'm simply saying that - for some reason - central banks this time around seem as if they are going to take this to the limit.
If it doesn't work, they'll never admit it - problems are "transitory" and theories don't work because there "wasn't enough". With those views, things will - I think - be taken to the limit until they get disorderly. What that looks like we'll have to see, but I still think this period ends badly. I think in some ways with ZIRP and QE this is the ultimate bubble and it would not surprise me if the global economy looked very different on the other side.
2. ‘Because the bull run has been long, any decline is going to be big, too.’ - This is a patently false premise. Duration of a bull market is not the determining factor in the severity of corrections. Valuations and economic conditions are the primary drivers.
Variables.
3. ‘The Federal Reserve is serious about raising rates now, and that’s going to end the rally.’ - The first part of his statement is probably true. The second part does not necessarily follow.
Who knows what the hell they want. You have different Fed governors saying different things every other day. The Fed can say that they want to raise rates, but they said that a couple of years ago, too. It gets to the point after several years where it looks bad that ZIRP is apparently still a need and does kind of go against their often overly optimistic economic projections. If that looks bad, imagine how it will look if they raise rates 50 basis points and then have to backtrack and lower rates again. That would be a clusterbleep of epic proportions.
The Fed is ultimately "data dependent", but there is a real, strong element of "baffle them with BS" that is becoming more and more apparent with each passing year. As far as I'm concerned, this is a MOPE - management of perspective economy and the Fed is trying to manage the market's view of the economy for as long as they continue to have credibility. You should not be trading based upon what Yellen, Bullard or anyone else says on any given day because guess what? They could very well say something entirely different two days later. And all the discussion about the Fed raising rates might meet resistance with economic reality.
4. ‘The government will screw this up.’ - This is a silly argument. Governments come and go depending on the outcome of elections.
Of course they will. As far as I'm concerned, a lot of what government does these days is simply "hot potato" - hope they can buy time by financial engineering and other garbage in order to get to hand things off to the next person. Or, they hope they can throw enough money at problems that they don't have to actually go through the difficult task of having to solve them. And hey, it's a lot more popular to throw money at problems than to make difficult decisions - until things fall apart again.
5. ‘The market is overpriced.’ - This is probably true in general. However, it's a straw-man so "all-inclusive" that it's easy to knock down.
Meh. It depends on so many factors.
6. ‘You can’t lose money in cash, so I will wait until the next downturn passes.’ -
Well, you can if the government decides that ZIRP and QE aren't enough and decide to step it up to things like NIRP and devaluation.

@dicksonL
Finding my username in your post.....not knowing your other holdings or whether your IRA(s) has access to a brokerage feature, to allow you to place your monies just about anywhere; I can only add to what msf noted with a few trinkets of thought regarding your questions.
With the following in mind; per Mr. Snowball's "statement of the obvious", that "We cannot vouch for the accuracy or appropriateness of any of it,"
This is my/our view from this house; but will not be appropriate for everyone regarding a taxable acct. or a tax sheltered acct. as noted for your 401k and IRA(s).
You noted: " Since IRA acct can go more aggressive, for tax free growth for 6 more years( a lesson I learnt only 2 years ago) before RMD kicks in, I am tweaking my portfolio, making more index based in taxable and aggressive in IRA. my 401k with ltd. choice is on s&[email protected]%"
>>>I will presume you are stating that your IRA holdings may be invested in whatever without current concern about taxation. Aggressive, for me; has a different meaning. Aggressive could perhaps imply a portfolio of 100% in equity investments.
I agree with msf regarding the choices you noted in your taxable account; and agree that one should place whatever is most tax efficient for your choice of holdings into this area.
As for the tax sheltered accounts; one does not have to be concerned with taxation at this time; so one may "fiddle" with whatever is most appropriate for their risk/reward investment emotion. Buy and sell when you need or choose to without regard to current tax from the transactions. This, obviously; is the nice part of tax sheltered holdings. In the end, per current tax policy; we/you will pay tax on the withdrawals at an ordinary income rate at the federal/state level, yes?
A brief overview would be that you may choose to be aggressive with your investments in both types of account holdings; leaning towards the most tax efficient for the taxable account, eh? Two choices were noted in your post and in msf's reply about tax efficiency. I do not have a direct opinion of either of your choices. You noted replacing one with another. Perhaps you may decide to keep the original fund, but move some of this money to the other fund, too. I have not looked at the funds, so I don't know how similar they may be regarding the investment style/holdings.
The majority of our holdings are within tax sheltered accounts; so we have not been concerned about tax efficient holdings. Our main goal has always been captial preservation (money to live for another day, to take advantage of the long term compounding effect) and capital appreciation in whatever form it may arrive, be it income/yield or price appreciation. This goal, of course; is regulated with our own value of risk and reward from the investments.
Currently, we are about 65% equity within the broad U.S. and Europe areas. In June of 2008 we were at 90% investment grade bonds. Our portfolio is ever changing and may be slightly aggressive for some near or in retirement; and will remain in place, until we feel the investments are no longer working/happy.
Only my 2 cents worth.
Take care,
Catch