Question for those in retirement
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Question for those in retirement
For those currently in retirement, how close are you (+/-) to age in bonds and what is the composition of your non equity asset allocation? TBM, TIPS, and interm bonds appear to be popular for investors with employment income in the accumulation stage. I'm trying to find out how risk averse investors are during retirement and how this is compensated by their non equity holdings.
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I had to fully retire at 60 due to health issues. We're about 68% in fixed assets (all with Vanguard). We're about evenly divided between short and intermediate investment grade, with about 6-7% more in Prime MM. The balance (about 32%) is in Vanguard equity funds. This is more than our age in bonds, but we're mostly interested in preserving what we have, but still maintain a decent growth potential.
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Age 63 w/75% fixed. Fixed is invested in 401k SVA, US savings bonds, short and intermediate bond funds and credit union MMA.
A couple years ago we had about 1/3 equities, but realized we didn't need the risk. So we reduced equities to 25% and expect to hold that minimum indefinitely.
A couple years ago we had about 1/3 equities, but realized we didn't need the risk. So we reduced equities to 25% and expect to hold that minimum indefinitely.
"The wants of mortals are containers that can never be filled." (Socrates)
I'm at "age minus 10" in bonds (50%/50%). About half in TSP's G-Fund, a little less than half in total bond market, a smidge in TIPS fund. When/if I move completely out of the TSP, I will probably be half total bond and half TIPS funds.
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64 yrs old. ~50% in bonds. - 16% in long term (VBLTX and municipals), 16% in intermediate (VBILX and VBTLX), 8% in short term (VBIRX), and 10% in TIPS (VAIPX).
I guess that's age - 14. I don't know how risk averse I am, now. I guess I'll find out if there is a down turn in the next 5 or 10 years.
I guess that's age - 14. I don't know how risk averse I am, now. I guess I'll find out if there is a down turn in the next 5 or 10 years.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
- ruralavalon
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Age minus 15 in bonds (50/50).
75% of the bond allocation in laddered Treasury STRIPS.
The remainder of the bond allocation almost equally split between Total Bond Market and Short Term Investment Grade.
No TIPS.
75% of the bond allocation in laddered Treasury STRIPS.
The remainder of the bond allocation almost equally split between Total Bond Market and Short Term Investment Grade.
No TIPS.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Age = 55, retired.
Bonds = Age - 15, or 40%.
Bonds consist of Total Bond Market fund, 90%, and TIPS, 10%.
I'm relatively heavy in stocks because I can afford to be. Even in stocks go down 50% and stay there forever, I'm okay.
A pension and expectation for Social Security also fund my retirement plan.
Just.
Bonds = Age - 15, or 40%.
Bonds consist of Total Bond Market fund, 90%, and TIPS, 10%.
I'm relatively heavy in stocks because I can afford to be. Even in stocks go down 50% and stay there forever, I'm okay.
A pension and expectation for Social Security also fund my retirement plan.
Just.
- Christine_NM
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I hold the following "non-equity":
cash (money market, checking account)
CREF Bond Market
CREF Inflation-Linked Bonds
TIAA Traditional
Vanguard Intermediate Term Investment Grade
Vanguard California Intermediate-Term Tax-Exempt
Cash is roughly 6%, TIPS 12%, Traditional 8%, other bonds 20%; a total of 46%. Add twenty to get my age.
But I have a good pension that provides a base. Of course, I wouldn't think of considering any part of it as a bond ( ), but it does allow me to put more into equity and feel comfortable doing so.
cash (money market, checking account)
CREF Bond Market
CREF Inflation-Linked Bonds
TIAA Traditional
Vanguard Intermediate Term Investment Grade
Vanguard California Intermediate-Term Tax-Exempt
Cash is roughly 6%, TIPS 12%, Traditional 8%, other bonds 20%; a total of 46%. Add twenty to get my age.
But I have a good pension that provides a base. Of course, I wouldn't think of considering any part of it as a bond ( ), but it does allow me to put more into equity and feel comfortable doing so.
- Steelersfan
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Age minus 15% in bonds
Bond allocation is 25/25/50: Intermediate Term T/E, TIPS and Total Bond Market
Bond allocation is 25/25/50: Intermediate Term T/E, TIPS and Total Bond Market
Last edited by Steelersfan on Sat Apr 16, 2011 6:35 pm, edited 2 times in total.
- rcshouldis
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I am 65 and wife is 70. We have 60% in bonds.
Chuck |
Past Performance Is Just That - bob |
For info on the SC LowCountry & Savannah GA Area Bogleheads contact me at chucktanner46@gmail.com
TBM & TIPS are about 60% of my portfolio. But my age is more than 60. I don't follow the formula since I want 40% equities.
Chaz |
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“Money is better than poverty, if only for financial reasons." Woody Allen |
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http://www.bogleheads.org/wiki/index.php/Main_Page
With a 5 year TIPS currently yielding -0.64% and most US bonds linked (via risk-return) to such yields, I agree stink is the operative word.TF Hutch wrote:My Dad is 93.
His AA is 89% Stocks, 11% Bonds
Has more than sufficient income from Defined Benefit pension.
Thinks Bond returns stink today
Anyone care to disagree?
How close ...
There is an interpretation point here. You are supposed to include the worth of pensions and SS income as part of the equation. Computing your SS check to its value is simple enough, just divide it by ".07". This is based on the fact that if you surrender your cash to a good annuity they will pay you about 7% a year. This is the method discussed by Bernstein in "The Investor's Manifesto".
I also follow Ray Lucia's Buckets of Money concept. Where bucket one is designed to hold you cashflow needs for about seven years. Bucket two is supposed to hold the money required to refill bucket one when bucket one runs out. And bucket three is your long term investment bucket - it should not be touched for about 14 years. You may wish to look into this concept, which allows a person to be a bit more liberal in his/her bucket three investment allocation.
Finally, keep in mind Ben Graham's rule. "At least 25% in bonds but no more than 75%. At least 25% in stocks but no more than 75%.
I also follow Ray Lucia's Buckets of Money concept. Where bucket one is designed to hold you cashflow needs for about seven years. Bucket two is supposed to hold the money required to refill bucket one when bucket one runs out. And bucket three is your long term investment bucket - it should not be touched for about 14 years. You may wish to look into this concept, which allows a person to be a bit more liberal in his/her bucket three investment allocation.
Finally, keep in mind Ben Graham's rule. "At least 25% in bonds but no more than 75%. At least 25% in stocks but no more than 75%.
Eerily similar. Even the user name.Dandy wrote:Age 63, 44% equities. Non equity investments: Total Bond, TIPs, ST Bond Index, ST Investment Grade, GNMA, CDs, Savings acct, Money Mkt.
Age 43, 40% Equities (yea, I'm a chicken). Non equity investments: Cash/MMA/CDs 10%, ST Bond Index/IT Bond Index 50%. Also, didn't ask but on the other side of the balance sheet: 0% Debt.
Started retirement at age 65 with about 55% equities. In retirement my living expenses was to come from SS and investments only. Between then and age 68 I changed to my 100 minus my age invested in equities with the remainder a mix of MM and bonds, (or, if you prefer, my age in a mix of bonds and MM). Presently, I am approaching age 78 and equities are at 22.5%, bonds and MM are at 77.5%. I will not go below 20% equities in the future. This allocation has worked wonderfully.
Last edited by Sheepdog on Sun Apr 17, 2011 5:48 pm, edited 1 time in total.
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
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As long as the Weruva is kept well stocked, she doesn't much care about our stock/bond allocation. I suppose she's more of a hands-off Managed Payout fund kitty.Les wrote:Bob, is that the cat speaking or you?CyberBob wrote:Age - 17, which will grow even larger as I get older since I don't adjust bond allocation based on age.
Bob
Bob
- gotherelate
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My age is 66, but my bond allocation is about 40%. About 50% is in TIPS funds and 50% in I-T index fund but I have $12K in STB (taxable) as part of my EF. All VG.For those currently in retirement, how close are you (+/-) to age in bonds and what is the composition of your non equity asset allocation?
Part-Owner of Texas |
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“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
Age:68.5.
50% Cash/ Bonds
50% Stocks
That's the breakdown of my portfolio distribution according the VG site as of today.The important thing is that the Cash/Bond portion is estimated to more than cover my whole retirement.The stock portion,I consider legacy and can float up or down.
50% Cash/ Bonds
50% Stocks
That's the breakdown of my portfolio distribution according the VG site as of today.The important thing is that the Cash/Bond portion is estimated to more than cover my whole retirement.The stock portion,I consider legacy and can float up or down.
All the Best, |
Joe
Age 68, retired 8 years with a pension that covers all my expenses and then some. Now, as equity funds are reaching 2007 peak levels I've been moving a little out of equities and into VG High-Yield Tax Exempt and VG High-Yield Corporate - about 25% total.
Different strokes for different folks.
JohnP
Different strokes for different folks.
JohnP