Asset Allocation for mid 50 age group

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Mr.BB
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Asset Allocation for mid 50 age group

Post by Mr.BB » Fri Sep 22, 2017 2:58 pm

I was wondering what the average Stock to Bond allocation ratio for people on this board in their mid fifties use?

Right now we are 70% Stock and 30% Bonds (Not counting our emergency fund money)
(According to my Morningstar X-ray Fund allocation) / (Not counting our emergency fund money)
4% Cash
53% U.S Stocks
14% Foreign Stock
30% Bond
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jebmke
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Re: Asset Allocation for mid 50 age group

Post by jebmke » Fri Sep 22, 2017 3:14 pm

When I was in my mid-50s I moved to about 40/60 and have stayed there since (10 years). I shifted it over a period of a couple of years prior to retiring at 55.
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ruralavalon
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Re: Asset Allocation for mid 50 age group

Post by ruralavalon » Fri Sep 22, 2017 4:12 pm

In the mid-50s the more typical asset allocation is probably around 60/40 stocks/bonds.
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dbr
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Re: Asset Allocation for mid 50 age group

Post by dbr » Fri Sep 22, 2017 4:18 pm

For Bogleheads stock% = 100 - .7 * age, so at age 55 that is about 60/40

Also, from different data, the average bond allocation is age -10, so for a 55 year old, that is 55/45.

SimplicityNow
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Re: Asset Allocation for mid 50 age group

Post by SimplicityNow » Fri Sep 22, 2017 4:47 pm

Anywhere from 65/35 to 45/55 stock bond would be what most here would consider reasonable for mid fifties. You would be on the more aggressive side of that range but if you are comfortable there then there really isn't any reason to change.

livesoft
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Re: Asset Allocation for mid 50 age group

Post by livesoft » Fri Sep 22, 2017 4:53 pm

We were about 70/30 and no cash.
Last edited by livesoft on Fri Sep 22, 2017 4:55 pm, edited 1 time in total.
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bcc1234
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Re: Asset Allocation for mid 50 age group

Post by bcc1234 » Fri Sep 22, 2017 4:55 pm

Currently 55........ 65 / 30 / 5.

Plan on working 3-4 more years.

bubbadog
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Re: Asset Allocation for mid 50 age group

Post by bubbadog » Fri Sep 22, 2017 5:37 pm

I am 51 years old, AA 65/35.

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5th_Dimension
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Re: Asset Allocation for mid 50 age group

Post by 5th_Dimension » Fri Sep 22, 2017 8:29 pm

58 - 67/33. It is on the aggressive side but we are comfortable there
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Iliketoridemybike
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Re: Asset Allocation for mid 50 age group

Post by Iliketoridemybike » Fri Sep 22, 2017 8:37 pm

54 now. Retiring at 58. 35% domestic stock. 16% international stock, 45% bond, 4% alternatives. Very little cash. Less than 1%.

student
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Re: Asset Allocation for mid 50 age group

Post by student » Fri Sep 22, 2017 8:59 pm

I am 51, currently 62% Stock, 32% Bond and 6% Cash including EF.

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Kalo
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Re: Asset Allocation for mid 50 age group

Post by Kalo » Sat Sep 23, 2017 12:49 am

57 yo and probably retired. Currently 63 stock and 37 fixed income. Moving toward goal of 60/40 so pretty close.

Part of my rationale is that my fixed income divided by years to SS at 70 equals 40% of portfolio, floor LMP. I assume the fixed income will keep up with inflation but I might create a tips ladder for more certainty. Then I will have to decide if I want more fixed income in the remainder.

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CyclingDuo
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Re: Asset Allocation for mid 50 age group

Post by CyclingDuo » Sat Sep 23, 2017 4:40 am

Mr.BB wrote:
Fri Sep 22, 2017 2:58 pm
I was wondering what the average Stock to Bond allocation ratio for people on this board in their mid fifties use?

Right now we are 70% Stock and 30% Bonds (Not counting our emergency fund money)
(According to my Morningstar X-ray Fund allocation) / (Not counting our emergency fund money)
4% Cash
53% U.S Stocks
14% Foreign Stock
30% Bond
56, and current AA is:

US Stocks: 61.27%
Cash: 13.32%
International Stocks: 10.73%
Alternatives: 7.48%
US Bonds: 6.49%
International Bonds: .37%

It's been a solid bull market thus far which has kept my AA tilted more aggressively. I've read many things with regard to a formula that captures longevity along the lines of this quote and link:

What's the best asset allocation for my age?

The old rule of thumb used to be that you should subtract your age from 100 - and that's the percentage of your portfolio that you should keep in stocks. For example, if you're 30, you should keep 70% of your portfolio in stocks. If you're 70, you should keep 30% of your portfolio in stocks.

However, with Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age. That's because if you need to make your money last longer, you'll need the extra growth that stocks can provide.

http://money.cnn.com/retirement/guide/i ... htm?iid=EL
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J295
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Re: Asset Allocation for mid 50 age group

Post by J295 » Sat Sep 23, 2017 5:28 am

58 retired.
110 - age = equity
so, 52% equity
Don't count paid for house, cars, ss, etc. when making allocation
Non-equity is combination of cash, cd, ibonds, tips, bonds, floating rate fund

dcabler
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Re: Asset Allocation for mid 50 age group

Post by dcabler » Sat Sep 23, 2017 6:49 am

56 (DW is 57)
Still working for approx. 3 more years
Targeting around 50/50 but currently at:
52% stock (approx. 80/20 US/Foreign)
48% bonds

Outside of whatever is in my checking account at any given time, I don't carry a cash position per se, but around 2% of the bonds are short term.
Plan to stay at this AA forever.

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Taz
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Re: Asset Allocation for mid 50 age group

Post by Taz » Sat Sep 23, 2017 6:57 am

54 (retired military but work part-time; DW full-time)
60 equity / 40 fixed
Current breakdown:
TSM 70%, SCV 10%, REIT 4%, INTL 16%
G Fund 58%, F Fund (TBM) 5%, Interm Bond 20%, TIPS Fund 12%, Cash 5%

-- Still vacillating on whether to drop to 55/45. Will probably drop REITs since they are now in TSM.
The destination matters.

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TheTimeLord
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Re: Asset Allocation for mid 50 age group

Post by TheTimeLord » Sat Sep 23, 2017 7:57 am

Mr.BB wrote:
Fri Sep 22, 2017 2:58 pm
I was wondering what the average Stock to Bond allocation ratio for people on this board in their mid fifties use?

Right now we are 70% Stock and 30% Bonds (Not counting our emergency fund money)
(According to my Morningstar X-ray Fund allocation) / (Not counting our emergency fund money)
4% Cash
53% U.S Stocks
14% Foreign Stock
30% Bond
Just curious why you don't include your Emergency Fund. Someone in their mid-fifties is likely close enough to retirement that for all practical purposes it is part of their retirement savings. Omitting may make your financial situation appear to be riskier than it really is. Full disclosure, I have always counted my Emergency Fund as part of my AA and for several years it has held over 12 months worth of expenses.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

Mr.BB
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Re: Asset Allocation for mid 50 age group

Post by Mr.BB » Sat Sep 23, 2017 8:10 am

My reason I don't add it in my total is that ideally the money does not exist; unless there is an emergency. I don't look at trying to make money from it. I would want to only have to use for a extreme medical bill or home emergency.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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TheTimeLord
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Re: Asset Allocation for mid 50 age group

Post by TheTimeLord » Sat Sep 23, 2017 8:24 am

Mr.BB wrote:
Sat Sep 23, 2017 8:10 am
My reason I don't add it in my total is that ideally the money does not exist; unless there is an emergency. I don't look at trying to make money from it. I would want to only have to use for a extreme medical bill or home emergency.
Let me ask you a question, say you have 50% of your assets in hopefully relatively stable fixed income assets would you feel that you would be able to cover an emergency with a small portion of those assets? Personally I am all for setting an absolute dollar minimum on the amount of safe assets someone has as a way to manage risk, just not sure I am seeing the value in separating your emergency fund from your assets. But if it works for you or helps you sleep better at night then by all means continue to do so. Sorry if I went to far off topic.
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dbr
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Re: Asset Allocation for mid 50 age group

Post by dbr » Sat Sep 23, 2017 8:26 am

The results I posted were from previous polls here that I found using Google. These days polls are not allowed as such.

sambb
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Re: Asset Allocation for mid 50 age group

Post by sambb » Sat Sep 23, 2017 8:36 am

given the long bull market, i would be a little conservative. 60/40 or 55/45

Ready3Retire
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Re: Asset Allocation for mid 50 age group

Post by Ready3Retire » Sat Sep 23, 2017 8:39 am

Currently 56 planning to retire at 59. Including 401ks, tIRAs, Roths, and after tax savings: 55% stock/45% bond. Also, I have a pension.

Mr.BB
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Re: Asset Allocation for mid 50 age group

Post by Mr.BB » Sat Sep 23, 2017 8:53 am

TheTimeLord wrote:
Sat Sep 23, 2017 8:24 am
Mr.BB wrote:
Sat Sep 23, 2017 8:10 am
My reason I don't add it in my total is that ideally the money does not exist; unless there is an emergency. I don't look at trying to make money from it. I would want to only have to use for a extreme medical bill or home emergency.
Let me ask you a question, say you have 50% of your assets in hopefully relatively stable fixed income assets would you feel that you would be able to cover an emergency with a small portion of those assets? Personally I am all for setting an absolute dollar minimum on the amount of safe assets someone has as a way to manage risk, just not sure I am seeing the value in separating your emergency fund from your assets. But if it works for you or helps you sleep better at night then by all means continue to do so. Sorry if I went to far off topic.
That is a valid point, and I have created a portfolio review (Morningstar X-ray), including the cash. However the short term bond funds that we have are in our Roths and our 401k brokerage acct so technically we couldn't access them for a few more years.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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TheTimeLord
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Re: Asset Allocation for mid 50 age group

Post by TheTimeLord » Sat Sep 23, 2017 8:56 am

Mr.BB wrote:
Sat Sep 23, 2017 8:53 am
TheTimeLord wrote:
Sat Sep 23, 2017 8:24 am
Mr.BB wrote:
Sat Sep 23, 2017 8:10 am
My reason I don't add it in my total is that ideally the money does not exist; unless there is an emergency. I don't look at trying to make money from it. I would want to only have to use for a extreme medical bill or home emergency.
Let me ask you a question, say you have 50% of your assets in hopefully relatively stable fixed income assets would you feel that you would be able to cover an emergency with a small portion of those assets? Personally I am all for setting an absolute dollar minimum on the amount of safe assets someone has as a way to manage risk, just not sure I am seeing the value in separating your emergency fund from your assets. But if it works for you or helps you sleep better at night then by all means continue to do so. Sorry if I went to far off topic.
That is a valid point, and I have created a portfolio review (Morningstar X-ray), including the cash. However the short term bond funds that we have are in our Roths and our 401k brokerage acct so technically we couldn't access them for a few more years.
Again, if it is working for you then keep doing it. Just thought I would pose the question.
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DrGoogle2017
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Re: Asset Allocation for mid 50 age group

Post by DrGoogle2017 » Sat Sep 23, 2017 11:32 am

I have less than 50% in stocks. My goal is to hedge fund my return to be around 7% and take no more risk after that.

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Alexa9
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Re: Asset Allocation for mid 50 age group

Post by Alexa9 » Sat Sep 23, 2017 11:42 am

Part of me says to be more conservative since we've just had an excellent bull run, but part of me says to stay the course. Worst case scenario is a 2008 right after you retire. I would look at what your portfolio would do in that scenario.

I think anywhere from 60/40 to 40/60 is reasonable.

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CyclingDuo
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Re: Asset Allocation for mid 50 age group

Post by CyclingDuo » Sat Sep 23, 2017 11:51 am

sambb wrote:
Sat Sep 23, 2017 8:36 am
given the long bull market, i would be a little conservative. 60/40 or 55/45
Not trying to argue about your comments regarding the long bull market, but rather pointing out a view that the oft quoted thought that this has been a non-stop bull market since day one off of the lows hit in 2009 needs the hood to be lifted and a closer look taken at the engine to get the full view.

There are plenty of views out there of the 13 year secular bear market we experienced from 2000 to 2013. In fact, the NASDAQ took 17 years to break out. Likewise, there are plenty of views with regard to the bear market many are not even remembering we went through for a full year in 2015-2016...

"Very few people want to talk about the Bear Market that recently happened from mid 2015 to mid 2016 where the average stock corrected over 20% and many of the leading sectors corrected between 25-50%." - Joe Fahmy

https://www.joefahmy.com/2017/04/29/mar ... rmedbroker

That certainly provides food for thought when we look at bull/bear markets and what happened from mid 2015 to mid 2016. Do we disregard the 2015-2016 bear market and count the current bull market as having started in 2009? Or do we count the 2015-16 bear and count the current bull market move from 2016? Or do we go back to 2013 and count the break out as the start of the bull market? Lots of things to consider as we hear the daily media mantra of how "old" this bull market is. In the meantime, what is going on underneath the hood with regard to accumulation/distribution by the large players regardless of what is being said.

Another well known investor provides his opinion as well...

http://www.businessinsider.com/laszlo-b ... age-2017-9
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gamboolman
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Re: Asset Allocation for mid 50 age group

Post by gamboolman » Sat Sep 23, 2017 11:58 am

Age 58 planning to retire at end of 2019
Current AA is 67 % equities, 30% Bonds, 3% cash
Moving towards ~ 55/40/5 ish.......

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stemikger
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Re: Asset Allocation for mid 50 age group

Post by stemikger » Sat Sep 23, 2017 1:27 pm

Age 53, 60/40 and will probably stay there for life.
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honduranhurricane
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Re: Asset Allocation for mid 50 age group

Post by honduranhurricane » Sat Sep 23, 2017 1:41 pm

Just turned 50. In aggregate 70% equities, 30% bonds. Likely keep it there until I retire, then 60/40 or perhaps 50/50.

Hockey10
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Re: Asset Allocation for mid 50 age group

Post by Hockey10 » Sat Sep 23, 2017 1:48 pm

80% stock, 10% bonds, 10% cash. This is the lowest equity allocation I have had since I started investing 35 years ago. I never owned any bonds until I was 50. Up until age 50, I was about 95 - 97% stock and 3 - 5% cash.

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SquawkIdent
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Re: Asset Allocation for mid 50 age group

Post by SquawkIdent » Sat Sep 23, 2017 2:43 pm

Not to hijack the thread but does having a COLAd pension affect your asset allocation? Do you look at it as 1. I have a great pension let's shoot for the moon with 100% stocks or 2. I have a great pension, no need for risk so let's go 20% stock/80% bonds and cash.

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Re: Asset Allocation for mid 50 age group

Post by jebmke » Sat Sep 23, 2017 2:46 pm

SquawkIdent wrote:
Sat Sep 23, 2017 2:43 pm
Not to hijack the thread but does having a COLAd pension affect your asset allocation? Do you look at it as 1. I have a great pension let's shoot for the moon with 100% stocks or 2. I have a great pension, no need for risk so let's go 20% stock/80% bonds and cash.
Either one.
When you discover that you are riding a dead horse, the best strategy is to dismount.

Dandy
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Re: Asset Allocation for mid 50 age group

Post by Dandy » Sat Sep 23, 2017 3:26 pm

I think 60% or less of equities would be prudent in most cases especially with the equity markets at or near historic highs. Yes, that could be considered market timing but those in or approaching retirement have declining or little human capital to make up significant losses. That is a major difference from earlier in the accumulation stage and should be carefully considered.

Also, I would count your emergency fund for a couple of reasons. One is because in an emergency all your assets may come into play, another is that they are part of your investable assets just that you choose to keep them in safe or fairly safe liquid products. You just have to maintain the understanding that these assets, which are on first call should there be an emergency, should not be used for other purposes. In fact in an emergency you may, at some point, sell appreciated equities to lower your overall risk rather than pay down all your "safe" assets.

Including your efund gives a better understanding of your true allocation and resulting risk.

printer86
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Re: Asset Allocation for mid 50 age group

Post by printer86 » Sat Sep 23, 2017 8:19 pm

53 & 54 here. Our S/B/C allocation currently sits at 69/23/8. However, we're expecting a significant inflow later this year and will need to decide whether to keep these proportions.

remomnyc
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Re: Asset Allocation for mid 50 age group

Post by remomnyc » Sat Sep 23, 2017 8:36 pm

80/20 until a couple years ago. Currently we are 40 US/20 intl/40 bonds because I intend to retire next year at age 52. If I were planning to work to FRA, we would probably be closer to 70/30.

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