Plenty of money but what to do with it NOW? (Nice problem, I know)
(Mount Juliet, TN)
My wife and I retired about a year and a half ago at ages 61 and 62. We've always lived beneath our means and that's probably why were able to retire early.
We fully funded 10 years of college for our 2 daughters and still managed to pay off the mortgage before we retired.
So here we are retired and living on Social Security with two nice sized, untouched IRAs. Our 401Ks suffered mightily back in 2008 and 2009 losing about half the principal in a very short time. We were totally blindsided and didn't know what to do so we did nothing. Over the next few years we made everything back and more. When we retired we rolled our 401Ks into IRAs.
I tried to learn what I could about mutual funds online and then picked out a half dozen funds that looked pretty good. I don't know if I was smart or lucky but since we retired those funds have done very well.
We now have enough money to last us for the next 30 years provided we can get a modest return like 5%. Unfortunately we don't have enough money that we could afford to lose a sizable portion.
With what I've been seeing in the news has made me fearful that there may be a very large quick downturn in the financial market. So, over the last few days I have moved all of our holdings into cash funds where they will earn virtually nothing but won't decrease either. At this stage we can better afford no gains for awhile as opposed to a possible huge loss.
My plan is to watch the market and if money becomes tight, QE has to stop (sometime?), then I expect to see CDs with higher interest rates. If that happens I would begin to purchase some CDs.
I hope the economy begins to stabilize sometime so I will have enough confidence to get back in the market. It would be nice to leave money to our kids and grandkids when we are gone.
I'd love to hear other people's money management stories in retirement. Hopefully I can learn a thing or two.