Whats your Asset Allocation for 60-70 year old's?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

Whats your Asset Allocation for 60-70 year old's?

Postby marc515 » Sat Jul 14, 2012 7:50 am

Just looking to see what most of you guy who are 60-70 years young have for your asset allocation. I'm currently very conservative with only about 10% stocks, but am looking to buy on the dips to increase that somewhat. I've used some of the AA tools, and they indicate I should be 40% stocks, so I just wanted to get an idea on what the average might be.

Thank you
marc515
 
Posts: 69
Joined: Sun Jan 27, 2008 10:12 am

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Call_Me_Op » Sat Jul 14, 2012 7:55 am

I'm not there yet but have thought some about it. I think 20% is the minimum you want in stocks unless you do not need to keep-up with inflation for the overall portfolio. For the other 80%, "the pickins are slim" at the moment. Short-term, high-quality bonds are an option.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
Call_Me_Op
 
Posts: 4643
Joined: Mon Sep 07, 2009 3:57 pm
Location: Milky Way

Re: Whats your Asset Allocation for 60-70 year old's?

Postby jvclark02 » Sat Jul 14, 2012 8:18 am

Holding at 50/50 at age 65, but I have a DBP indexed to inflation to cover the essential stuff, and yet to take SS.
Experience is something you gain shortly after you really needed it.
User avatar
jvclark02
 
Posts: 386
Joined: Sun Aug 29, 2010 11:40 am
Location: Grand Lake OK

Re: Whats your Asset Allocation for 60-70 year old's?

Postby YDNAL » Sat Jul 14, 2012 8:24 am

.

Everyone is different, so AA is personal and should be guided by ability and need for risk.

60yo [edit] DW 57yo, 45/55 Equity/Fixed unconventional split (non-Total Mkt). We don't need the Equity portion.
Last edited by YDNAL on Sat Jul 14, 2012 9:31 am, edited 1 time in total.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
YDNAL
 
Posts: 13423
Joined: Tue Apr 10, 2007 5:04 pm
Location: Biscayne Bay

Re: Whats your Asset Allocation for 60-70 year old's?

Postby peppers » Sat Jul 14, 2012 8:57 am

Ages: 60 and 58 50/50 stock-bond allocation Continuing to work and will have 2 pensions with cost of living adjustments.
"..the cavalry ain't comin' kid, you're on your own..."
peppers
 
Posts: 916
Joined: Tue Oct 25, 2011 8:05 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby FabLab » Sat Jul 14, 2012 9:03 am

63yo and holding at 50/50 stocks/bonds, with no plans to change.
The fundamental things apply as time goes by -- Herman Hupfeld
User avatar
FabLab
 
Posts: 1088
Joined: Mon Oct 18, 2010 1:15 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby johnep » Sat Jul 14, 2012 9:13 am

I am age 67, retired and have 25% equity and 75% fixed income. However, I have pension and SS which more than cover our living expenses. I reviewed my investment plan with Vanguard analyst last year. I expected him to chastize me for low equity. He surprised my by stating my AA was fine. Why take the equity risk if I did not need to.

Everyone's AA will vary depending upon their specific financial situation and their tolerance for risk. One size does not fit all.
johnep
 
Posts: 1084
Joined: Wed Dec 28, 2011 10:56 am
Location: North Carolina

Re: Whats your Asset Allocation for 60-70 year old's?

Postby jlj » Sat Jul 14, 2012 9:22 am

45% US Stock funds, 14% International Stock funds, 36% Bond funds, mostly Vanguard
Age 66, just retired. Advice welcomed.
Last edited by jlj on Sat Jul 14, 2012 9:25 am, edited 1 time in total.
jlj
 
Posts: 64
Joined: Mon Dec 05, 2011 10:49 am

Re: Whats your Asset Allocation for 60-70 year old's?

Postby ruralavalon » Sat Jul 14, 2012 9:25 am

Both age 67 (next month), 50/50 asset allocation.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
User avatar
ruralavalon
 
Posts: 4727
Joined: Sat Feb 02, 2008 11:29 am
Location: Illinois

Re: Whats your Asset Allocation for 60-70 year old's?

Postby YDNAL » Sat Jul 14, 2012 9:30 am

jlj wrote:45% US Stock funds, 14% International Stock funds, 36% Bond funds, mostly Vanguard
Age 66, just retired. Advice welcomed.

You are missing 5% :D
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
YDNAL
 
Posts: 13423
Joined: Tue Apr 10, 2007 5:04 pm
Location: Biscayne Bay

Re: Whats your Asset Allocation for 60-70 year old's?

Postby JW Nearly Retired » Sat Jul 14, 2012 9:42 am

I'm in the upper 1/4th of your range. 55/45 stocks/bonds. I would be more conservative if I didn't have a fairly good DB pension that I will eventually take.
JW
Retired Summer 2013
JW Nearly Retired
 
Posts: 3909
Joined: Sun Dec 16, 2007 1:25 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Rich in Michigan » Sat Jul 14, 2012 9:47 am

marc515 wrote:Just looking to see what most of you guy who are 60-70 years young have for your asset allocation. I'm currently very conservative with only about 10% stocks, but am looking to buy on the dips to increase that somewhat. I've used some of the AA tools, and they indicate I should be 40% stocks, so I just wanted to get an idea on what the average might be.

Thank you


Age 61. Wife 59

I'm retired, she will retire in 9 months

50/50 allocation and I expect that to remain the same after my wife retires

I have two pensions and two 401k's that I recently rolled to my IRA. Am not touching the 401k money at this time. Will eventually take SS but have not decided on a start up age for it yet
Rich in Michigan
 
Posts: 100
Joined: Mon Jun 11, 2012 2:27 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby looking » Sat Jul 14, 2012 10:03 am

Holding at 50/50 at age 65, but I have a DBP indexed to inflation to cover the essential stuff, and yet to take SS.

what is DBP index????
looking
 
Posts: 425
Joined: Thu Mar 01, 2007 8:14 pm
Location: morgan hill ,ca

Re: Whats your Asset Allocation for 60-70 year old's?

Postby YDNAL » Sat Jul 14, 2012 10:38 am

jvclark02 wrote:Holding at 50/50 at age 65, but I have a DBP indexed to inflation to cover the essential stuff, and yet to take SS.
looking wrote:Holding at 50/50 at age 65, but I have a DBP indexed to inflation to cover the essential stuff, and yet to take SS.

what is DBP index????

D (Defined) B (Benefit) P (Pension) indexed (indexed to Inflation)
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
YDNAL
 
Posts: 13423
Joined: Tue Apr 10, 2007 5:04 pm
Location: Biscayne Bay

Re: Whats your Asset Allocation for 60-70 year old's?

Postby jvclark02 » Sat Jul 14, 2012 12:16 pm

YDNAL wrote:
jvclark02 wrote:Holding at 50/50 at age 65, but I have a DBP indexed to inflation to cover the essential stuff, and yet to take SS.
looking wrote:Holding at 50/50 at age 65, but I have a DBP indexed to inflation to cover the essential stuff, and yet to take SS.

what is DBP index????

D (Defined) B (Benefit) P (Pension) indexed (indexed to Inflation)


:sharebeer
Experience is something you gain shortly after you really needed it.
User avatar
jvclark02
 
Posts: 386
Joined: Sun Aug 29, 2010 11:40 am
Location: Grand Lake OK

Re: Whats your Asset Allocation for 60-70 year old's?

Postby 3247 » Sat Jul 14, 2012 12:18 pm

I'm 70, retired for 10 years, living mostly off dividends from 70% equities. Also have 30% in a 10/20% mix of Vanguard equity funds and bond funds. I put one years cash needs into laddered CD's, so I don't count my cash as a percentage of holdings.

I am more worried about the impending 'Taxamageddon' with 3.8% surtax on investment income than on AA at the moment. Do I go to tax frees, do I go to more cash, or do I stand pat and just hope for the best? (Not my style)..
3247
 
Posts: 51
Joined: Sat Feb 11, 2012 4:34 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby investor » Sat Jul 14, 2012 2:05 pm

Age 71... with 50/50 s/b... been retired 16 years..... Have SS and Pension income.

investor
investor
 
Posts: 734
Joined: Mon Feb 19, 2007 11:50 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby 1530jesup » Sat Jul 14, 2012 2:22 pm

no pension, we are 73 & soon to be 72.
I still take on limited consulting projects which allows me to periodically stop drawing down assets
43% equities, 57% fixed
efficiency is not all its cracked up to be, do you want to live your life in half the time it takes the average person? Rhymes With Orange | Rich
1530jesup
 
Posts: 885
Joined: Sat Nov 03, 2007 12:19 am
Location: South Florida

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Steelersfan » Sat Jul 14, 2012 2:49 pm

65 - 55/45 s/b and planning on sticking with it for the long term.

If it floats up or down 5% I won't care.
User avatar
Steelersfan
 
Posts: 2428
Joined: Thu Jun 19, 2008 9:47 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby BigFoot48 » Sat Jul 14, 2012 2:54 pm

marc515 wrote:I'm currently very conservative with only about 10% stocks, but am looking to buy on the dips to increase that somewhat.

I would say you are very/too low in stocks, but if you have lots of money and pensions it may not matter!

We're retired and 64 and are at 45%/55%, and plan to devolve to age-in-bonds by age 80.
Last edited by BigFoot48 on Sat Jul 14, 2012 3:20 pm, edited 1 time in total.
Retired | Two-time Top-10 Diehard S&P500 Picker; Nine-Time Loser
User avatar
BigFoot48
 
Posts: 2074
Joined: Tue Feb 20, 2007 11:47 am
Location: Arizona

Re: Whats your Asset Allocation for 60-70 year old's?

Postby investor.saver1 » Sat Jul 14, 2012 2:59 pm

Retired 63 year old....30% equities and 70% fixed income. Conservative...yes and very happy about keeping the volatility down. Live on SS and pension. Also have reduced durations for my bond holdings. My portfolio creates very little excitement in my life and that's perfectly OK with me.
Investor.Saver1 | | Experience is something you don't get until just after you need it.
User avatar
investor.saver1
 
Posts: 259
Joined: Sun Jan 02, 2011 10:43 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby midareff » Sat Jul 14, 2012 3:08 pm

Retired 64 y/o with DBP having 3% annual COLA and taking SS. ... they cover 80+% living expenses. 44% Equity, 52% Fixed, 4% cash/CDs.
User avatar
midareff
 
Posts: 2343
Joined: Mon Nov 29, 2010 11:43 am
Location: Biscayne Bay, South Florida

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Raybo » Sat Jul 14, 2012 3:17 pm

I am 60 and have been retired for since I was 48. I started at 60/40 stock/bonds and moved gradually down to 50/50. In 2008, I kept rebalancing from bonds into stocks as the market tanked. As the bottom approached, I didn't have the willpower to continue doing it and let my allocation go to see where it ended up. I am now 40/60 (actually 40 stocks (50/50 US/Int), 50 bonds, 10 cash and equivalents), which seems to keep my mind at peace, though I'm not sure what I'd do in the next 2008-like downdraft.

I have no pension and my current spending is below 4%.
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.
User avatar
Raybo
 
Posts: 946
Joined: Tue Feb 20, 2007 12:02 pm
Location: San Francisco

Re: Whats your Asset Allocation for 60-70 year old's?

Postby GregLee » Sat Jul 14, 2012 3:28 pm

My wife and I are both 70, retired, with SS and pensions sufficient for living expenses. We are 95/4/1 (stocks/bonds/cash), since we have no reason to worry about market volatility.
Greg, retired 8/10.
User avatar
GregLee
 
Posts: 1748
Joined: Wed Oct 27, 2010 4:54 pm
Location: Waimanalo, HI

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Dale_G » Sat Jul 14, 2012 4:27 pm

75 years old and I have been 50/50 for a long time - it seems like it is the rebalancing sweet spot. If the market is kind however, I will let the equity percentage drift upward. The odds are the bulk of my holdings will go to my sons - presently in their mid-forties.

Dale
Volatility is my friend
User avatar
Dale_G
 
Posts: 2037
Joined: Tue Feb 20, 2007 6:43 pm
Location: central Florida - on the grown up side of 77

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Sheepdog » Sat Jul 14, 2012 5:18 pm

As you see by the other answers, it is personal.
I am 78. At 60 I was about 60% stocks. At 65, when I retired, I was about 57%. I live off of these investments plus Social Security....no pensions. By the time I was 70, I changed to 100 minus my age in stocks, so it was about 30%. Presently I have 22% stocks. I don't plan to go below 20% in the future, regardless of how old I get.
Jim
People should not say everything they think. They should think about everything they say.
User avatar
Sheepdog
 
Posts: 3647
Joined: Tue Feb 27, 2007 4:05 pm
Location: Indiana, retired 1998 at age 65

Re: Whats your Asset Allocation for 60-70 year old's?

Postby looking » Sat Jul 14, 2012 6:31 pm

Sheepdog wrote:As you see by the other answers, it is personal.
I am 78. At 60 I was about 60% stocks. At 65, when I retired, I was about 57%. I live off of these investments plus Social Security....no pensions. By the time I was 70, I changed to 100 minus my age in stocks, so it was about 30%. Presently I have 22% stocks. I don't plan to go below 20% in the future, regardless of how old I get.
Jim


I just wonder if you buy target retirement income fund that is exactly 30/70 AA after you retired 65,-70
looking
 
Posts: 425
Joined: Thu Mar 01, 2007 8:14 pm
Location: morgan hill ,ca

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Mr Grumpy » Sat Jul 14, 2012 6:48 pm

I don't know about "average", but I am 65 years old, just retired, and my AA is 50/50; almost all in index funds.
Breakdown: Equities: Total Stock = 25%, Developed Mrkts index=13%, Emerg Markets = 6%, REIT Index= 6%
Bonds: bond index= 40%, Cash =8%, Insurance Cash value (I know...) 2%

Just me - everyone's different
Mr Grumpy
 
Posts: 44
Joined: Sun May 30, 2010 4:28 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Sam I Am » Sat Jul 14, 2012 7:26 pm

Message deleted.
Last edited by Sam I Am on Tue Oct 08, 2013 11:08 am, edited 1 time in total.
Sam I Am
 
Posts: 2063
Joined: Tue Feb 20, 2007 8:58 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby joe8d » Sat Jul 14, 2012 10:19 pm

Age 70. 50% Stock/50% Debt Instruments.
All the Best, | Joe
User avatar
joe8d
 
Posts: 3381
Joined: Tue Feb 20, 2007 9:27 pm
Location: Buffalo,NY

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Taylor Larimore » Sat Jul 14, 2012 10:40 pm

marc515 wrote:Just looking to see what most of you guy who are 60-70 years young have for your asset allocation. I'm currently very conservative with only about 10% stocks, but am looking to buy on the dips to increase that somewhat. I've used some of the AA tools, and they indicate I should be 40% stocks, so I just wanted to get an idea on what the average might be.

Thank you


Hi Marc:

Our asset-allocation depends upon our goals, risk-tolerance, time-frame and personal financial situation. It could be a mistake to mimic an "average." This Vanguard tool can be helpful:

https://personal.vanguard.com/us/funds/ ... reset=true

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 19927
Joined: Tue Feb 27, 2007 9:09 pm
Location: Miami FL

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Sheepdog » Sun Jul 15, 2012 12:14 am

looking wrote:
Sheepdog wrote:As you see by the other answers, it is personal.
I am 78. At 60 I was about 60% stocks. At 65, when I retired, I was about 57%. I live off of these investments plus Social Security....no pensions. By the time I was 70, I changed to 100 minus my age in stocks, so it was about 30%. Presently, my allocation is 22% stocks. I don't plan to go below 20% in the future, regardless of how old I get.
Jim


I just wonder if you buy target retirement income fund that is exactly 30/70 AA after you retired 65,-70

looking,
The Target funds didn't begin until after my 70th birthday (late 2003). I did buy Target 2005 and Target Income (different IRA accounts) in 2004.
I presently am investing (22% stocks) in Target Income, Wellesley, Short Term Investment Grade bond fund and I Bonds. The dividends from the Target Income and Wellesley Income in our traditional IRA accounts go to those IRA's respective short term bond fund and from those bond funds I take our annual distributions for expenses.
I also have Target Income and Wellesley in our 2 Roth accounts.
Jim
People should not say everything they think. They should think about everything they say.
User avatar
Sheepdog
 
Posts: 3647
Joined: Tue Feb 27, 2007 4:05 pm
Location: Indiana, retired 1998 at age 65

Re: Whats your Asset Allocation for 60-70 year old's?

Postby 2beachcombers » Sun Jul 15, 2012 8:42 am

70/30 eqities/fixed. Plan is to maintain 70% equities.
AA is Bernstein's IDA--50-50 taxable/deferred; deferred 50/50 IRA/RIRA. RIRA plan for emergency and for heirs.
age 67, retired 12 yrs.
reduced equity % over the past 5yrs from 90%

Considering DBP and SS portfolio is 45/55 equities/fixed.

Bernstein's new kindle book on Age provides good incite to this question

jerry
2beachcombers
 
Posts: 409
Joined: Sat Jul 31, 2010 6:10 pm
Location: Savannah

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Munir » Sun Jul 15, 2012 9:02 am

Taylor Larimore wrote:
marc515 wrote:Just looking to see what most of you guy who are 60-70 years young have for your asset allocation. I'm currently very conservative with only about 10% stocks, but am looking to buy on the dips to increase that somewhat. I've used some of the AA tools, and they indicate I should be 40% stocks, so I just wanted to get an idea on what the average might be.

Thank you


Hi Marc:

Our asset-allocation depends upon our goals, risk-tolerance, time-frame and personal financial situation. It could be a mistake to mimic an "average." This Vanguard tool can be helpful:

https://personal.vanguard.com/us/funds/ ... reset=true

Best wishes.
Taylor


Hi Taylor,

I found the link you quote from Vanguard more geared to employed people than to retirees. I generally follow a formula close to "age in bonds" but the link suggested 50/50 allocation (I'm nearly 75).

I'm also confused about the situation where a person has a pension or SPIA (and social security) which cover living expenses. Is that a reason to have a lower equity poisiton on the premise of why take a risk, or a reason to do the opposite because even if the equities tank one is still covered by the steady income source? I've seen it argued both ways.
User avatar
Munir
 
Posts: 1748
Joined: Mon Feb 26, 2007 5:39 pm
Location: Oregon

Asset Allocation for 60-70 year old's?

Postby Taylor Larimore » Sun Jul 15, 2012 9:35 am

Hi Taylor,

I found the link you quote from Vanguard more geared to employed people than to retirees. I generally follow a formula close to "age in bonds" but the link suggested 50/50 allocation (I'm nearly 75).

I'm also confused about the situation where a person has a pension or SPIA (and social security) which cover living expenses. Is that a reason to have a lower equity poisiton on the premise of why take a risk, or a reason to do the opposite because even if the equities tank one is still covered by the steady income source? I've seen it argued both ways.


Assuming your pension and social security "cover living expenses," your investment portfolio should be designed to give you more spendable income for personal luxuries or a larger inheritance for others. In other words, you can take more risk hoping for higher return.

I suspect this is the primary reason why the Vanguard tool resulted in the 50/50 portfolio instead of Mr. Bogle's "age in bonds."

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 19927
Joined: Tue Feb 27, 2007 9:09 pm
Location: Miami FL

Re: Whats your Asset Allocation for 60-70 year old's?

Postby jvclark02 » Sun Jul 15, 2012 10:57 am

Munir wrote:
Taylor Larimore wrote:
marc515 wrote:Just looking to see what most of you guy who are 60-70 years young have for your asset allocation. I'm currently very conservative with only about 10% stocks, but am looking to buy on the dips to increase that somewhat. I've used some of the AA tools, and they indicate I should be 40% stocks, so I just wanted to get an idea on what the average might be.

Thank you


Hi Marc:

Our asset-allocation depends upon our goals, risk-tolerance, time-frame and personal financial situation. It could be a mistake to mimic an "average." This Vanguard tool can be helpful:

https://personal.vanguard.com/us/funds/ ... reset=true

Best wishes.
Taylor


Hi Taylor,

I found the link you quote from Vanguard more geared to employed people than to retirees. I generally follow a formula close to "age in bonds" but the link suggested 50/50 allocation (I'm nearly 75).

I'm also confused about the situation where a person has a pension or SPIA (and social security) which cover living expenses. Is that a reason to have a lower equity poisiton on the premise of why take a risk, or a reason to do the opposite because even if the equities tank one is still covered by the steady income source? I've seen it argued both ways.


Taylor's Vanguard link recommended 50/50 for my situation, and that is what we have at age 65, with 90% of it sitting in Vanguard index funds (TSM/TBM/REIT/etc). Were it not for a pension that is indexed to inflation, plus being able to wait until 70 for SS, I think I would be much more into bonds to reduce the effects of another 1990, 2001, or 2008 style recession.

Unfortunately at this point, I just can't seem to find any bonds/treasuries that are outpacing inflation. In fact, I wish I could buy more zero rate Ibonds, but my 'uncle' says no.
Experience is something you gain shortly after you really needed it.
User avatar
jvclark02
 
Posts: 386
Joined: Sun Aug 29, 2010 11:40 am
Location: Grand Lake OK

Re: Whats your Asset Allocation for 60-70 year old's?

Postby YDNAL » Sun Jul 15, 2012 11:20 am

Munir wrote:Hi Taylor,

I found the link you quote from Vanguard more geared to employed people than to retirees. I generally follow a formula close to "age in bonds" but the link suggested 50/50 allocation (I'm nearly 75).

I'm also confused about the situation where a person has a pension or SPIA (and social security) which cover living expenses. Is that a reason to have a lower equity poisiton on the premise of why take a risk, or a reason to do the opposite because even if the equities tank one is still covered by the steady income source? I've seen it argued both ways.

If you don't use Assets to pay bills, then it is up to you to determine what are Assets invested-for.
1. Age in Bonds is nothing but a guideline that makes sense only as a starting point but nothing further.
2. If you actually invest for others, with different need and timeframe than yours, then *I* would invest as if it is THEIR money.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
YDNAL
 
Posts: 13423
Joined: Tue Apr 10, 2007 5:04 pm
Location: Biscayne Bay

Re: Whats your Asset Allocation for 60-70 year old's?

Postby BigFoot48 » Sun Jul 15, 2012 11:41 am

Chart of most of the above data.
Image
Retired | Two-time Top-10 Diehard S&P500 Picker; Nine-Time Loser
User avatar
BigFoot48
 
Posts: 2074
Joined: Tue Feb 20, 2007 11:47 am
Location: Arizona

Re: Asset Allocation for 60-70 year old's?

Postby Munir » Sun Jul 15, 2012 12:49 pm

Taylor Larimore wrote:
Hi Taylor,

I found the link you quote from Vanguard more geared to employed people than to retirees. I generally follow a formula close to "age in bonds" but the link suggested 50/50 allocation (I'm nearly 75).

I'm also confused about the situation where a person has a pension or SPIA (and social security) which cover living expenses. Is that a reason to have a lower equity poisiton on the premise of why take a risk, or a reason to do the opposite because even if the equities tank one is still covered by the steady income source? I've seen it argued both ways.


Assuming your pension and social security "cover living expenses," your investment portfolio should be designed to give you more spendable income for personal luxuries or a larger inheritance for others. In other words, you can take more risk hoping for higher return.

I suspect this is the primary reason why the Vanguard tool resulted in the 50/50 portfolio instead of Mr. Bogle's "age in bonds."

Best wishes.
Taylor


My statement may have been confusing because I covered two unrelated issues under one heading. For calarification, I do not have a pension and only two small SPIAs which together do NOT cover my living expenses. Therefore, I am drawing on my principal from my IRA. So my inquiry still stands that IF a person has enough income from outside his IRA to cover expenses, is the conventional BH wisdom that he should hold a higher or lower equity poisiton than "age in bonds" ?

As to the link suggested by Taylor, many of their questions ask about one's salary, years till retirement, how long one plans to use the money withdrawn etc. It does not apply well to a retiree. I wish there is a similar questionnaire that specifically targets retirees which would then give a clearer answer to what the asset allocation should be for that individual.

BTW, I am nearly 75 years old, and 32% in equities but will reduce it closer to 30%.
Last edited by Munir on Sun Jul 15, 2012 1:00 pm, edited 1 time in total.
User avatar
Munir
 
Posts: 1748
Joined: Mon Feb 26, 2007 5:39 pm
Location: Oregon

Using the Vanguard asset-allocation tool.

Postby Taylor Larimore » Sun Jul 15, 2012 12:57 pm

Munir:

As to the link suggested by Taylor, many of their questions ask about one's salary, years till retirement, how long one plans to use the money withdrawn etc It does not apply well to a retiree.

It works for me and I am retired. Read the first question carefully:

The length of time I plan to invest before I begin withdrawals?


A retiree should move the slider to "Less than 1 year."

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Taylor Larimore
Advisory Board
 
Posts: 19927
Joined: Tue Feb 27, 2007 9:09 pm
Location: Miami FL

Re: Using the Vanguard asset-allocation tool.

Postby Munir » Sun Jul 15, 2012 1:08 pm

Taylor Larimore wrote:Munir:

As to the link suggested by Taylor, many of their questions ask about one's salary, years till retirement, how long one plans to use the money withdrawn etc It does not apply well to a retiree.

It works for me and I am retired. Read the first question carefully:

The length of time I plan to invest before I begin withdrawals?


A retiree should move the slider to "Less than 1 year."

Best wishes.
Taylor


Taylor,

You are correct. The one missing question is one's age.
I had filled the questionnaire the way you suggested and it had come back with a 50:50 recommendation which is, in my opinion, way out of line for a 75 year old retiree in a distribution phase. I wonder if they would change their recommendation if they had one or more questions seeking employment status and age.
User avatar
Munir
 
Posts: 1748
Joined: Mon Feb 26, 2007 5:39 pm
Location: Oregon

Re: Whats your Asset Allocation for 60-70 year old's?

Postby SpringMan » Sun Jul 15, 2012 1:19 pm

Ages 65, 67% fixed income which includes a slice of VG high yield fund. So age in bonds applies to us. Have considered bumping equities a little because we have a small pension and SS.
Best Wishes, SpringMan
User avatar
SpringMan
 
Posts: 4222
Joined: Wed Mar 21, 2007 12:32 pm
Location: Michigan

Re: Using the Vanguard asset-allocation tool.

Postby jvclark02 » Sun Jul 15, 2012 1:30 pm

Munir wrote:
Taylor Larimore wrote:Munir:

As to the link suggested by Taylor, many of their questions ask about one's salary, years till retirement, how long one plans to use the money withdrawn etc It does not apply well to a retiree.

It works for me and I am retired. Read the first question carefully:

The length of time I plan to invest before I begin withdrawals?


A retiree should move the slider to "Less than 1 year."

Best wishes.
Taylor


Taylor,

You are correct. The one missing question is one's age.
I had filled the questionnaire the way you suggested and it had come back with a 50:50 recommendation which is, in my opinion, way out of line for a 75 year old retiree in a distribution phase. I wonder if they would change their recommendation if they had one or more questions seeking employment status and age.


Given the slider type questions on risk, selling in a crisis, and risk comfort levels, I'm not sure age plays a major factor in this calculator. Given today's low interest rates on bonds, and my particular income circumstances, I'm pretty sure I would still be at 50% in equities if I were 75 today.
Experience is something you gain shortly after you really needed it.
User avatar
jvclark02
 
Posts: 386
Joined: Sun Aug 29, 2010 11:40 am
Location: Grand Lake OK

Re: Asset Allocation for 60-70 year old's?

Postby YDNAL » Sun Jul 15, 2012 1:45 pm

Munir wrote:My statement may have been confusing because I covered two unrelated issues under one heading. For calarification, I do not have a pension and only two small SPIAs which together do NOT cover my living expenses. Therefore, I am drawing on my principal from my IRA. So my inquiry still stands that IF a person has enough income from outside his IRA to cover expenses, is the conventional BH wisdom that he should hold a higher or lower equity poisiton than "age in bonds" ?....

BTW, I am nearly 75 years old, and 32% in equities but will reduce it closer to 30%.

The AA (Equity/Fixed split) depends on ability and need for risk. In your case, since there's NEED from your Assets to cover living expenses, then it depends on withdrawal rate.
    1. If withdrawal rate is reasonable (say 2-4%), then the Age in Bonds guideline may be right for you. That said, 25% Equities is likely the minimum that I would consider.
    2. If withdrawal rate is not reasonable (say 5-6%), and you may run the risk of running out of Assets, then the Age in Bonds guideline doesn't work and you may need a different risk/(expected) return profile.
You see, the potential variations of this equation (Equity/Fixed) can be many based on personal circumstances.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
YDNAL
 
Posts: 13423
Joined: Tue Apr 10, 2007 5:04 pm
Location: Biscayne Bay

Re: Whats your Asset Allocation for 60-70 year old's?

Postby Quasimodo » Sun Jul 15, 2012 1:57 pm

Age 73, retired. 25% each stocks, gold, long term treasury bonds and cash.

My wife recently retired and is still in process of converting her 403b plan to a rollover IRA for more flexibility. She is currently about half and half GNMA and intermediate treasury bond funds. When the rollover gets set up she will probably go with the above allocation.

John
Many wealthy people are little more than janitors of their possessions. | | Frank Lloyd Wright, architect (1867-1959)
User avatar
Quasimodo
 
Posts: 1355
Joined: Thu May 03, 2007 2:58 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby mickeyd » Sun Jul 15, 2012 2:30 pm

marc515 wrote:very conservative with only about 10% stocks, but am looking to buy on the dips to increase that somewhat.



Reading between the lines, you appear to be timing the market. Do you know when the dips will occur? Market timing is generally a losers game as I see it. If you prefer an AA with higher than 10% equities, why not just change to that AA ASAP?

We are retired with 3 DP plans, SS, and our AA is about 60/40. Probably will not begin withdrawing invested funds until RMD time, which is still a few years away.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
User avatar
mickeyd
 
Posts: 3596
Joined: Fri Feb 23, 2007 4:19 pm
Location: Deep in the Heart of South Texas

Re: Whats your Asset Allocation for 60-70 year old's?

Postby fidelio » Mon Jul 16, 2012 3:50 am

age sixty, retired in april. i like 50/50, but not there yet. best to all, artie
fidelio
 
Posts: 165
Joined: Sun May 04, 2008 6:28 pm

Re: Whats your Asset Allocation for 60-70 year old's?

Postby SGM » Mon Jul 16, 2012 5:48 am

3247 wrote:I'm 70, retired for 10 years, living mostly off dividends from 70% equities. Also have 30% in a 10/20% mix of Vanguard equity funds and bond funds. I put one years cash needs into laddered CD's, so I don't count my cash as a percentage of holdings.

I am more worried about the impending 'Taxamageddon' with 3.8% surtax on investment income than on AA at the moment. Do I go to tax frees, do I go to more cash, or do I stand pat and just hope for the best? (Not my style)..


I am close to retirement and have a similar mix and goals. I share the same worries about the new tax law. I have a few tax free bond funds and am converting more tIRAs into Roths.
I am in the process of adding a Roth component to my solo 401k and will contribute the balance of my allowed contributions this year into the Roth component.
"Let us endeavor, so to live, that when we die, even the undertaker will be sorry." Mark Twain
SGM
 
Posts: 1018
Joined: Wed Mar 23, 2011 5:46 am

Re: Whats your Asset Allocation for 60-70 year old's?

Postby stemikger » Mon Jul 16, 2012 10:12 am

I'm not there yet, but I plan to hold 50/50 once I hit 65 and leaving it there until I leave this part of my journey. I'm 48 and my wife is 53 and I am 60/40 and will remain there until 65.
Stay the Course!
stemikger
 
Posts: 2276
Joined: Thu Apr 08, 2010 6:02 am

Re: Whats your Asset Allocation for 60-70 year old's?

Postby sschullo » Mon Jul 16, 2012 11:03 pm

We are 65 and 71 years old.
Roughly 30% equities and 70% bonds with a healthy corporate bond exposure.
All intermediate maturity bonds with the exception of long term bonds in VG TBM.
Returns for the last 4.5 years.
2008 lost 11.9%
2009 Gained 13.96
2010 Gained 10.6%
2011 Gained 2.5
YTD Gained 5.7%

Rebalance into VG Wellesley and into international equities both emerging and developed economies.

Image
Last edited by sschullo on Tue Jul 17, 2012 5:34 pm, edited 1 time in total.
“It’s what you learn, after you know it all, that counts.” - John Wooden
sschullo
 
Posts: 1559
Joined: Sun Apr 01, 2007 9:25 am
Location: Rancho Mirage, CA

Next

Return to Investing - Help with Personal Investments

Who is online

Users browsing this forum: Dale_G, Dru, Exabot [Bot], glosing, Goodbye Blue Monday, OpenRoad, Steelersfan, tomd37 and 81 guests