Retirees Should Still Have a Heavy Stock Allocation

I've seen a few articles like this recently: Retiring Into a Shaky Market? Think Long Term Anyway

I am always 100% equities with retirement savings, and always envisioned to continue to be heavily allocated in stocks through retirement.

The one thing that troubles me a little is really bad timing. Market goes down 40% the very year you retire. So this article makes two points that seem like good tweaks.

I like the buffer asset idea. Carve out a relatively small amount of your portfolio in cash. Then as the advisor says:

A really simple rule that I found works quite well and does just as well as more complicated rules, is that you just look at your portfolio balance on the date you retired. Whenever the current balance is less than that number, draw from the buffer asset. Otherwise, you withdraw from your portfolio. This is simple and works well.

I wish they would have given some guidance about how big the buffer should be. I'm going to say, enough to fund 2 leaner-than-ideal years.

I also like this idea:

Some retirement experts have found that an even more conservative mixture at retirement may be ideal. What they suggest next is counterintuitive, but underscores the long game that is the stock market: Instead of maintaining that lower allocation to stocks, they suggest you gradually increase it as you age.

So one thing that could imply is, starting to convert your buffer steadily to equities after, say, 5 years.

Coronavirus: Help Flatten the Curve by Deliberate Early Exposure?

The importance of "flattening the curve" of Covid19 seems to be sinking in, with "social distancing" being the single most important means. Nothing to argue with there. But I have an idea for another, complementary public health measure: what about selective, deliberate early exposure? (NOTE: This assumes that once you get it, you are immune for a while--I think that is a solid assumption.)

Why not expose voluntary cohorts of people to the disease, much sooner rather than later? And then put them in quarantine together (in a motel or whatever).

From a societal/public health standpoint, this would help flatten the curve. But why would people volunteer? I think there are a number of benefits (beyond knowing you are making a contribution to the greater good):

• Early exposure guarantees sufficient resources for your treatment. Versus getting it at peak, and maybe the hospital is full, or out of respirators.
• Choosing your time and place of quarantine ensures you aren't stuck on a cruise ship for weeks.
• Similarly, since the entire cohort would be infected together, the duration of the quarantine would be a predictable 2 weeks. Versus the cruise ship scenario, where every time a new case pops up, it would reset the clock.
• By getting it over with, you no longer have to endure weeks or months of social distancing--you are free to go about your business.
• You would have company in quarantine--the rest of your cohort.
• And of course you would know you are making a major, pro-social contribution by volunteering to be exposed. Ideally, maybe this could earn credits for those near and dear to you who are at high risk--should rationing be required.

I think it would be super-beneficial to do this with healthcare workers. Because that famous curve-flattening graphic? The one that shows the Healthcare system capacity as a fixed, steady-state horizontal line? Well guess what? If healthcare workers are infected, that line plunges downwards.

There would also be a big scientific/clinical dividend. Early data on the disease progression. If done really carefully, it might be possible, to some degree, to group the cohorts in statistically useful ways (vs random) to provide even better data.