I was just listening to a talk show about financial planning. A man called saying he had a lot of money in his 401k, all of it invested in money market type funds. He was afraid of the stock market. He sold real estate for a living and planned to retire in four or five years.
What’s wrong with this picture?
While we don’t know this persons current income, $400,000 is not a lot of money to retire with. For example, if you follow the 4% rule, you could use $16,000 a year and theoretically not run out of money (but not if you invest in money market funds). Or, you could buy an annuity and receive about $2,200 a month at age 65 for your life alone.
Beyond the income level, every day that goes buy his $400,000 is worth less because what he can earn in a money market or fixed income fund is less than even the current low inflation rate.
Fear of the market is understandable, I suffer from that syndrome myself which is admittedly irrational.
Unfortunately, the greater risks although not nearly as visible, are inflation and longevity in retirement.
Do you know your numbers? Are you well diversified based on your age and expected retirement date? Do you know your income replacement needs? Have you planned income for a surviving spouse or other dependent?
Sadly, I already know the answer to those questions for the vast majority of Americans; NO😓
QUINNSCOMMENTARY 
.
I retired at 55 [to a home-based part time job] with a lesser nest egg.
Seven years later… I took early SS… and still do not touch my nest egg…
which continues to grow.
I live very well on less than $15000 a year because I own my home,
have no debt and live in a less expensive part of the country.
My simple lifestyle might not suit everyone… but it is the lifestyle
I prefer even when I was working full time. It depends which is
more important to you… living high off the hog… or living free.
.
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More power to you. Your story points out some interesting things. Some people would say you are living in near poverty, but you seem to be okay with your lifestyle. You also note a major difference in the cost of living. Both these factors are lost on politicians.
The property taxes on my 85 year old modest house on a 50×120 lot are over $14,000 a year and going up.
Certainly many of our assumptions about living standard and wealth are questionable.
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