Move all investment money into fixed income?
 

At what point should one change from being an investor to a "saver"?

I've been retired a number of years and have invested all my adult life. Luckily, we have enough non-investment money to live on.

I now wonder if I should gradually begin selling my ETFs, Mutuals, and stocks and move all the money into fixed income.

I know the outcome will be lower and stable, but I won't have to deal with the daily ups and downs.

I'm familiar with the 60/40 rule but wonder if I should go 0/100.

Obviously the higher the risk, the higher the return. Just remember, today's 5 yr T note rate in 3.96%, inflation is almost double that.

Wife and I living in UK retired 27 years ago. We decided to put all our investments into cash, and avoid the grind of the ups and downs of the S&S market.
We looked for tax free fixed rate government cash bonds, and Government Inflation proof tax free cash bonds.
Ultra conservative, and capital making no spectacular growth, but no spectacular falls either.
In fact with inflation rising all time in UK at present, we are doing very nicely thank you!
It worked for us.
Some folks love the daily market gamble, but we wanted no more of that.
Some even aim to be among the richest residents in the cemetery, but we definitely don't want that either!

Glad you put saver in quotes because that really isn't the definition of fixed income. You can put all your "non-investment" money in bonds, treasuries or CD's and it's still an investment. Nonetheless, changing from equities to bonds or the allocation of such is based off many variables, two being investment goals and risk tolerance. I would definitely re-allocate money to fixed income, so you "won't have to deal with the daily ups and downs." Maybe start with inverting that "60/40 rule", and put 60% in fixed income and 40% in equities.

Why should the OP remember that "today's 5 yr T note rate is 3.96%, inflation is almost double that"?

I have always maintained a 40 percent stock, 40 percent bond, and 20 percent cash portfolio. I intended to transfer to 100 percent bonds and CDs when I retired. But, I no longer think that is a good idea because of the Federal Reserve's tight control over interest rates. Their interest rate policy is to punish savers and reward borrowers. So, I have not changed my asset allocation since retiring and I don't intend to. If you can afford to live off of your non-investment income, I think it would be a mistake to go to 100 percent fixed income.

4.6 percent on six months Treasury today. All I need risk free,

The inflation rate is nonsense. Control your housing costs and taxes. The rest is insignificant if you have properly saved. Most people have limited time left.

I am a greedy penny pincher but the time has come to spend. Don’t have heirs come to your funeral in a Maserati

If you cash out all these longly held ETFs etc. you need to consider how much taxable income you will generate and will you pay more in taxes than any real risk of a downturn in the markets. If you don't need those invested funds now or in the predictable future they will be part of your estate and will pass to your heirs at the stepped up basis of their value on your date of death.

Unless.....they're held in tax deferred accounts

Taxes are always a major consideration. Run the numbers. Time is your most valuable asset late in life

Why not consult a fee based financial advisor you vet ahead of time who will sign on to act as a fiduciary? Some people experience extreme stress making big financial decisions, especially irrevocable ones such as selling securities which may bring about huge tax bills or significant losses. Frankly, before I make big decisions in areas with which I am unfamiliar, unknowledgeable or uncomfortable I try to consult one or more experts

Well if you have enough noninvestment income today to meet all of your expenses, then whatever path you take should work … i am in a similar situation …. I have been gradually downsizing my investments the last few years in favor of cash and short term treasuries. I sleep well knowing my downside risks are minimal.

I am also content to know that my money market accounts are now paying 3.8% and short term treasuries 4.6%. Sure the overall inflation rate is high … but my personal inflation rate is not.

I would have agreed with you 20 years ago, when I could live off of my money market and bond monthly interest checks. But I don't think the Federal Reserve will ever again let savers get a fair rate of return on their fixed rate income investments. They want to encourage more borrowing and less saving.

Because Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate.

There are more interest rate hikes to come.

If you decide to go fixed income, perhaps start moving just a portion of your funds, and add more later as interest rates increase.

"Jerome Powell, head of the Federal Reserve, has said that the goal is for interest rates to be more than the inflation rate." Please provide your source!