Question for those in retirement

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spike14163
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Question for those in retirement

Postby spike14163 » Sat Apr 16, 2011 2:26 pm

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.

ResNullius
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Postby ResNullius » Sat Apr 16, 2011 2:40 pm

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.

retcaveman
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Postby retcaveman » Sat Apr 16, 2011 2:55 pm

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.
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retiredjg
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Postby retiredjg » Sat Apr 16, 2011 2:59 pm

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.

HAZEL
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Postby HAZEL » Sat Apr 16, 2011 3:08 pm

We use this allocation for all accounts except Roth. 65% bonds. (70% Total Bond Market, 30% Inflation Protected Securities) Our Roth accounts are: 40% bonds (same 70/30 split) All Vanguard. Age 69m/59f. We don't not plan to alter these allocations.

RadAudit
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Postby RadAudit » Sat Apr 16, 2011 3:10 pm

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.
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ruralavalon
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Postby ruralavalon » Sat Apr 16, 2011 3:12 pm

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.
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jidina80
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Postby jidina80 » Sat Apr 16, 2011 3:20 pm

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.

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Christine_NM
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Postby Christine_NM » Sat Apr 16, 2011 3:21 pm

I am retired and at (age minus 4) in bonds and cash. I like the idea of age in bonds but I'm getting older faster than I need to draw down.
Savor the moment.

sscritic
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Postby sscritic » Sat Apr 16, 2011 3:30 pm

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.

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Jake46
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Postby Jake46 » Sat Apr 16, 2011 3:53 pm

Age 64, retired
Non-equity = 60%

IRA: 50% TIPS fund/50% total bond market (25% of total portfolio)
Taxable: 100% intermediate term municipal bond fund (35% of total portfolio)

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Steelersfan
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Postby Steelersfan » Sat Apr 16, 2011 4:07 pm

Age minus 15% in bonds

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.

Redbelly
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Postby Redbelly » Sat Apr 16, 2011 4:08 pm

Age 59 with a pension that covers all my expenses and then some. 30% bonds, which are split evenly between TIPS and Total Bond Fund.

Robert44
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Postby Robert44 » Sat Apr 16, 2011 4:14 pm

Ages: 72 and 64-retired for 12 years: 51%equities/44bonds and 5%cash
reserves. Live on SS and RMD's.

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rcshouldis
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Postby rcshouldis » Sat Apr 16, 2011 4:38 pm

61 years old. 50/50 portfolio. Bonds all short term. Equity all diversified into 10 different ETFs. Large cap, small cap, value and growth both US and International.

Plan of taking SS at 64. My pension and SS should pay all bills for quite some time.

Chuck T
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Postby Chuck T » Sat Apr 16, 2011 5:05 pm

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

exoilman
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Postby exoilman » Sat Apr 16, 2011 5:08 pm

67 years of age, retired 8 years 70% bonds and cash plus pension and SS since age 62. I know I can have(afford) a greater equity percentage but just not inclined to do so.

Sam

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rustymutt
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Postby rustymutt » Sat Apr 16, 2011 5:16 pm

Age 55 and 40% bonds. 12% short term 20% interm term treasury and 8% TIPs.
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dandetour
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Postby dandetour » Sat Apr 16, 2011 5:37 pm

Age 58. Retired 2 years.
45% equity funds.
20% bonds
20% TIPs
15% CDs (5.4 - 5.5% for another 1.5 years)

Dan

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Judsen
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Postby Judsen » Sat Apr 16, 2011 6:13 pm

Age 74 10/12
equity 80%
cash 20%
Contrarian
retired since 1997
Be the change you want to see in the world

williamg
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Postby williamg » Sat Apr 16, 2011 6:26 pm

Age 66 retired 11 years:
55% bonds-
20% in Wellesley
12% TBM
9% I Bonds
9% Short Investment Grade

chaz
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Postby chaz » Sat Apr 16, 2011 6:37 pm

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 | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page

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BlueEars
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Postby BlueEars » Sun Apr 17, 2011 11:24 am

Currently am approximately age in stocks because bond real yields stink IMO.

Dandy
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Postby Dandy » Sun Apr 17, 2011 3:48 pm

Age 63, 44% equities. Non equity investments: Total Bond, TIPs, ST Bond Index, ST Investment Grade, GNMA, CDs, Savings acct, Money Mkt.

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TF Hutch
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Postby TF Hutch » Sun Apr 17, 2011 4:13 pm

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?
Hutch | A fool and his funds are soon parted! - Thomas Tusser (English Farmer and Writer. 1524-1580)

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BlueEars
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Postby BlueEars » Sun Apr 17, 2011 4:26 pm

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?

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.

VanFran
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How close ...

Postby VanFran » Sun Apr 17, 2011 4:57 pm

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%.

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Daffy
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Postby Daffy » Sun Apr 17, 2011 5:25 pm

Dandy wrote:Age 63, 44% equities. Non equity investments: Total Bond, TIPs, ST Bond Index, ST Investment Grade, GNMA, CDs, Savings acct, Money Mkt.


Eerily similar. Even the user name.

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.

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Sheepdog
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Location: Indiana, retired 1998 at age 65

Postby Sheepdog » Sun Apr 17, 2011 5:45 pm

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.
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Grasshopper
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Postby Grasshopper » Sun Apr 17, 2011 5:47 pm

Age 60, 65/35 stocks /bonds. I have a whole lot of taxable bucks in my portfolio. As a matter of fact taxable/to deferred/free, is almost exactly the same ratio. I don't want the dividends to increase my income.

Now Ms.G. age is a lot closer to my bond allocation. :lol:

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CyberBob
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Postby CyberBob » Mon Apr 18, 2011 2:16 pm

Age - 17, which will grow even larger as I get older since I don't adjust bond allocation based on age.

Bob

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BlueEars
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Postby BlueEars » Mon Apr 18, 2011 3:25 pm

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, is that the cat speaking or you?

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CyberBob
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Postby CyberBob » Mon Apr 18, 2011 5:02 pm

Les wrote:
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, is that the cat speaking or you?

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. :D

Bob

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gotherelate
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Postby gotherelate » Mon Apr 18, 2011 7:40 pm

Age = 61 (retired five years ago)
FI = 60% (31% nominal bonds, 26% inflation protected securities, 43% cash/equivalents)
-Grandpa | I'd rather see where I'm going than see where I've been.

cazaubon
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Postby cazaubon » Tue Apr 19, 2011 5:28 pm

TF Hutch, my dad is 73 and is 100% in equities. His pension and SS more than cover his expenses and he thinks bonds stink. He encourages me to do the same, but I have no pension, so I am leery.

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mickeyd
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Postby mickeyd » Tue Apr 19, 2011 6:08 pm

For those currently in retirement, how close are you (+/-) to age in bonds and what is the composition of your non equity asset allocation?


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.
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

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joe8d
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Postby joe8d » Tue Apr 19, 2011 9:40 pm

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.
All the Best, | Joe

JohnP
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Postby JohnP » Wed Apr 20, 2011 6:55 pm

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


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