The portfolios that are best in the accumulation phase, are not the best for the post-retirement/decumulation phase.

You're making that transition.

Just make sure you don't leave in those bond funds for too long and don't get around to making a plan.

Timing the market is still not a great idea IMO, but you might not really be doing that. People who time the market also intend to get back in, and you may not.

If you're reallocating to the mix you plan to have for retirement, then honestly there's probably not much harm in doing it 18 months early. But if you see yourself getting back into an higher equity mix in 3-5 years after a rebound, then you really shouldn't have gotten out in the first place, because you will suck at deciding when it's safe to get back in (and there might not be a downturn anyways).

Also, I'm no expert, but I think looking at historic returns from the last century and planning based on those old strategies for equity/bond mixes in retirement might be a bad idea. When companies stopped giving pensions and everyone got into a 401k-based system, the rules changed. Markets will continue to go up more often simply because everyone with a decent job is paying into Index funds every month regardless of what's happening.

We're all handcuffed to this "free market" and the deeper we get dependent on it, the more divorced indexes will be from major economic events. See how quickly the markets rebounded after Covid despite massive inflation, a yield curve inversion, etc.

You don't have to be all the way out or all the way in the market.

If you want to take 5%-15% out of stocks to invest elsewhere that's fine too. You don't have to pull out all of your money to hedge a bit.

If you already had the mindset of DCA when getting back in, why are you not consodering doing this on the way out as well?

Oh I didn't read the "probably DCA back in" part. Then yes, OP, you are timing the market and it's not a good idea.

Again, it'd be one thing if you're shifting to your retirement allocation, but if you're planning to get back into equities, it's a bad idea.

To time the market and win, you'd have to be successful at both selling at the right time, and re-entering at the right time. And it's dang hard, if not impossible to do both. My FIL claims he timed successfully using yield-curve inversions/reversions throughout his career, but as I mentioned above, I think the old-school economic indicators may prove to be of little value in this new normal where we just funnel billions every month into index funds and fiddle while Rome burns, so to speak.

And I know first hand how hard it is to get both sides right. I tried timing in COVID. Utterly nailed getting out at the right time (I think a blind squirrel could see what was coming)… and while that felt great on the way down, it was impossible to figure out when it was safe to get back in and I ended up losing out on unrealized gains. I'd have been better off if I had just stayed in. It would've been a more stressful month of March, but the flip side was that I spent the next year fretting how to get back in… way more anxiety and I came off the worse for it.

So learn from my mistake.

Unless you need all of your retirement money up front (and you don't), it's better just to leave it alone (or maybe shift a bit towards whatever retirement mix you plan to have, but then stay there).

Bob Knights Liver said:

---

If you already had the mindset of DCA when getting back in, why are you not considering doing this on the way out as well?

---

I think we can execute our retirement plans where we are now. I don't want to risk a 30% hit should the drop come sooner than later. That would likely have me delaying retirement, which I don't care to do.

You had a massive violent correction what 5 months ago. Youre v unlikely to get another this soon. Cant remember the figure offhand but frequency of 20% corrections is in years

jamey said:

---

What about keeping 5 to 10% cash on hand to buy dips


Is that timing the market?

---

No.. if you have 900k equities and 100k cash (so keeping 10% cash) and the market tanks 20% you will now have 720k stocks 100k cash so 12.2% cash and 87.8 stock but your desired allocation is 90/10 so you would want to take 18k of your cash and buy stock to get back to your desired allocation. This isn't timing, this is rebalancing.

If you are changing your allocation bc you have a hunch about the market and plan to change that allocation when the market changes, that is textbook market timing.