Asset Allocation once you reach your target

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masonstone
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Asset Allocation once you reach your target

Post by masonstone » Tue Jul 03, 2018 12:27 pm

What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.

Darth Xanadu
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Re: Asset Allocation once you reach your target

Post by Darth Xanadu » Tue Jul 03, 2018 12:37 pm

The short answer is, "It depends".

But in most realistic scenarios for me, I would likely be in the 35%-45% equities range.
"A courageous teacher, failure is."

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HomerJ
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Re: Asset Allocation once you reach your target

Post by HomerJ » Tue Jul 03, 2018 1:04 pm

masonstone wrote:
Tue Jul 03, 2018 12:27 pm
What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.
Well first off, I would think it would be better to glide to a desired retirement AA instead of just going straight from 90/10 to 50/50 the day you make your number. And then even IN retirement, one might make changes as your need and willingness to take risk change.

I'm 50/50 right now, about 6-7 years from retirement.

I think I'm going to set up a 3 year CD ladder soon (4% of my portfolio in each CD), so my ultimate goal will be 44/44/12 stocks/bonds/cash.

Each year, I'll cash out a CD, and buy a new 3-year CD using money in the stocks/bonds portfolio (re-balancing back to 44/44/12 as I do it).

So if stocks are up that year, I'll sell stocks to buy the new CD. If stocks have crashed, I'll sell bonds to buy the new CD.
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ExitStageLeft
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Re: Asset Allocation once you reach your target

Post by ExitStageLeft » Tue Jul 03, 2018 1:05 pm

How long? Is inflation a concern? See Michael Kitces article on a bond tent.

3funder
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Re: Asset Allocation once you reach your target

Post by 3funder » Tue Jul 03, 2018 1:35 pm

Probably 50/50 but that's 30 years from now.

livesoft
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Re: Asset Allocation once you reach your target

Post by livesoft » Tue Jul 03, 2018 1:37 pm

I'm there and I like 60/40 for the rest of breathing days.
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am
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Re: Asset Allocation once you reach your target

Post by am » Tue Jul 03, 2018 1:40 pm

I’d go from about 70-80% to 50/50 once target for basic living reached. Than if things go well later in retirement go higher in equities to have more for heirs.

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goingup
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Re: Asset Allocation once you reach your target

Post by goingup » Tue Jul 03, 2018 1:43 pm

I do think about this a lot. The wage earner in our house is going to retire this year--age 49. I'm 57, retired.

Because we have 30-40 more years of investing, we plan to stay at 60/40 for the long run. An asset allocation has a lot to do with how risk averse you are, and how wide the margin of error can be when things go badly.

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Re: Asset Allocation once you reach your target

Post by Broken Man 1999 » Tue Jul 03, 2018 1:53 pm

We are about 49% equity and 49% bonds with about 2% in Vanguard's Federal Money Market Fund. In retirement 2.5 years.

Works for us.

Broken Man 1999
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stemikger
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Re: Asset Allocation once you reach your target

Post by stemikger » Tue Jul 03, 2018 2:01 pm

I think a 60/40 throughout one's lifetime is a good idea. I am 54 and currently 60/40, that will stay for the rest of my natural life. Like Jack Bogle says, I don't want to think about it or worry about it. The Vanguard Balanced Index Fund will be my solution. Is it optimal? Who knows. Having said that, I have more important things to worry about and focus on than the market. Holding this one fund is the equivalent of having an advisory firm acting on my behalf but without the high fees. No rebalancing necessary and my only decision will be is how much I take out each year.
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masonstone
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Re: Asset Allocation once you reach your target

Post by masonstone » Tue Jul 03, 2018 2:22 pm

Does Vanguard Balance fund automatically re-balance? How often does it rebalance?

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Re: Asset Allocation once you reach your target

Post by masonstone » Tue Jul 03, 2018 2:29 pm

stemikger wrote:
Tue Jul 03, 2018 2:01 pm
I think a 60/40 throughout one's lifetime is a good idea. I am 54 and currently 60/40, that will stay for the rest of my natural life. Like Jack Bogle says, I don't want to think about it or worry about it. The Vanguard Balanced Index Fund will be my solution. Is it optimal? Who knows. Having said that, I have more important things to worry about and focus on than the market. Holding this one fund is the equivalent of having an advisory firm acting on my behalf but without the high fees. No rebalancing necessary and my only decision will be is how much I take out each year.
It seems like an expense ratio of 0.07% is 0.03% higher than Total market funds.

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stemikger
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Re: Asset Allocation once you reach your target

Post by stemikger » Tue Jul 03, 2018 2:32 pm

masonstone wrote:
Tue Jul 03, 2018 2:29 pm
stemikger wrote:
Tue Jul 03, 2018 2:01 pm
I think a 60/40 throughout one's lifetime is a good idea. I am 54 and currently 60/40, that will stay for the rest of my natural life. Like Jack Bogle says, I don't want to think about it or worry about it. The Vanguard Balanced Index Fund will be my solution. Is it optimal? Who knows. Having said that, I have more important things to worry about and focus on than the market. Holding this one fund is the equivalent of having an advisory firm acting on my behalf but without the high fees. No rebalancing necessary and my only decision will be is how much I take out each year.
It seems like an expense ratio of 0.07% is 0.03% higher than Total market funds.
Yes, but my wife who is a lot healthier than me is clueless when it comes to investing. This will give me the Sleep at Night Factor when I go to the Matrix. The very minimal extra cost is well worth it for me.
Last edited by stemikger on Tue Jul 03, 2018 2:35 pm, edited 1 time in total.
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stemikger
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Re: Asset Allocation once you reach your target

Post by stemikger » Tue Jul 03, 2018 2:34 pm

masonstone wrote:
Tue Jul 03, 2018 2:22 pm
Does Vanguard Balance fund automatically re-balance? How often does it rebalance?
Yes they do. It stays at a constant 60/40. Not sure how often or they just do it with new inflows. Either way, it's a totally hands off investment program if you thrive on simplicity and don't feel the need for international and is in a tax deferred account. I fit the bill on all counts.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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Re: Asset Allocation once you reach your target

Post by megabad » Tue Jul 03, 2018 2:42 pm

masonstone wrote:
Tue Jul 03, 2018 12:27 pm
What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.
My allocation is controlled by my time horizon. It will still be controlled by my time horizon when I reach my "target". I intend for my asset allocation to change all the way until the day I die. I don't have a target date, but I would probably be close to 50/50 if I believed based on actuarial data that I would be retired today and live for 20 years (I would consider this pretty normal retirement). My fixed income % would likely increase with age beyond that date though since at this point I don't intend to pass along much to my children.

NotWhoYouThink
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Re: Asset Allocation once you reach your target

Post by NotWhoYouThink » Tue Jul 03, 2018 2:43 pm

I don't know how long the rest of my life will be, and can't accurately predict my spending until then. But that doesn't mean I have to work forever or limit my spending to 1% of my portfolio until I get to be 100. The future is uncertain. So waiting to get to "that number is sufficient for your to live well for the rest of your life" would take too long. There will need to be portfolio growth going on between retirement and death from old age.

To that end, the answer is 60/40 for the foreseeable future.

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Earl Lemongrab
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Re: Asset Allocation once you reach your target

Post by Earl Lemongrab » Tue Jul 03, 2018 2:54 pm

I retired earlier this year. I was at 60/40 and don't see any compelling reasons to change that.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Asset Allocation once you reach your target

Post by dbr » Tue Jul 03, 2018 2:57 pm

I think it is a useful exercise for anyone asking about this sort of thing to go to www.firecalc.com , enter some plausible scenario, and then examine the chart of outcomes for the various samples of retirement years over history. One can adjust the asset allocation and see what changes. For convenience one can select on the investigate tab that the results be available in a spreadsheet.

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Artsdoctor
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Re: Asset Allocation once you reach your target

Post by Artsdoctor » Tue Jul 03, 2018 3:21 pm

I would think you'd want to define "target" first. A lot of people use the word "target" in the context of being able to retire or perhaps being financially independent. But that can occur at a variety of ages. Many people who are newly retired may have reached their "target" but have several decades of living expenses ahead of them; their asset allocation may be relatively aggressive. Or, some people might like working much, much later in their lives and might only need 10-15 years of expenses saved; their asset allocation may be very conservative. Still others may include legacy plans in planning and will remain aggressively invested throughout their entire lives.

The biggest point here is that some investors choose an incredibly conservative asset allocation right when they retire but do not appreciate that they have many, many years of spending ahead of them (which might necessitate a less conservative investment approach).

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Meg77
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Re: Asset Allocation once you reach your target

Post by Meg77 » Tue Jul 03, 2018 4:02 pm

My grandfather added more bonds to his AA when he sold his business and "retired" in his early 60s years ago. When he was 75 or so he asked me what % I thought he should have in equities and was worried about the market (this was either before the Great Recession or after most of the losses had been recovered; I can't recall). I asked why he had anything in equities at all. He had about $10 million, lived in a very LCOLA, and spent only about 2% of that total each year, mostly on travel (he gave away another 3% per year as well). I was sort of being tongue in cheek, but I found out later that he ended up selling all equities and moving to 100% fixed income.

He's still alive at 86 and has missed a big bull run. I can't honestly say it made him sleep better at night either, as he's a Boglehead type who is prone to re-analyzing and optimizing and watching and worrying about his money/legacy/giving/investments/estate plan/spending regardless. But he's given away most of his money to his kids already; it didn't change a thing for him but simply reduced the amount they each have gotten and will receive eventually.
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DanMahowny
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Re: Asset Allocation once you reach your target

Post by DanMahowny » Tue Jul 03, 2018 4:53 pm

Retired. 80% cash and short term bonds.

Will look to buy US equities after DOW hits 16,000 in next 12 months.
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Sandtrap
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Re: Asset Allocation once you reach your target

Post by Sandtrap » Tue Jul 03, 2018 5:02 pm

HomerJ wrote:
Tue Jul 03, 2018 1:04 pm
masonstone wrote:
Tue Jul 03, 2018 12:27 pm
What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.
Well first off, I would think it would be better to glide to a desired retirement AA instead of just going straight from 90/10 to 50/50 the day you make your number. And then even IN retirement, one might make changes as your need and willingness to take risk change.

I'm 50/50 right now, about 6-7 years from retirement.

I think I'm going to set up a 3 year CD ladder soon (4% of my portfolio in each CD), so my ultimate goal will be 44/44/12 stocks/bonds/cash.

Each year, I'll cash out a CD, and buy a new 3-year CD using money in the stocks/bonds portfolio (re-balancing back to 44/44/12 as I do it).

So if stocks are up that year, I'll sell stocks to buy the new CD. If stocks have crashed, I'll sell bonds to buy the new CD.
+1
Similar.
More than made my number since retirement.
Now at 45/45/10 with 10 in CD ladders.
j :D

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Taylor Larimore
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Re: Asset Allocation once you reach your target

Post by Taylor Larimore » Tue Jul 03, 2018 5:46 pm

masonstone wrote:
Tue Jul 03, 2018 12:27 pm
What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.
masonstone:

I fit the profile in your question. This is what I do and it has worked well:

1. I put the money necessary to "live well for the rest of your life" into Vanguard Total Bond Market Index Fund whose worst annual loss is -2.66%.

2. I put the rest into Vanguard 500 Index Fund which pays-out a monthly amount to my heirs while I am still alive.

Please read my "Simplicity" link below.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

am
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Re: Asset Allocation once you reach your target

Post by am » Tue Jul 03, 2018 6:38 pm

Taylor Larimore wrote:
Tue Jul 03, 2018 5:46 pm
masonstone wrote:
Tue Jul 03, 2018 12:27 pm
What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.
masonstone:

I fit the profile in your question. This is what I do and it has worked well:

1. I put the money necessary to "live well for the rest of your life" into Vanguard Total Bond Market Index Fund whose worst annual loss is -2.66%.

2. I put the rest into Vanguard 500 Index Fund which pays-out a monthly amount to my heirs while I am still alive.

Please read my "Simplicity" link below.

Best wishes.
Taylor
Are you saying put 30 yrs expenses into total bond for a typical age retiree?

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Taylor Larimore
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Re: Asset Allocation once you reach your target

Post by Taylor Larimore » Tue Jul 03, 2018 7:14 pm

am wrote:
Tue Jul 03, 2018 6:38 pm
Taylor Larimore wrote:
Tue Jul 03, 2018 5:46 pm
masonstone wrote:
Tue Jul 03, 2018 12:27 pm
What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.
masonstone:

I fit the profile in your question. This is what I do and it has worked well:

1. I put the money necessary to "live well for the rest of your life" into Vanguard Total Bond Market Index Fund whose worst annual loss is -2.66%.

2. I put the rest into Vanguard 500 Index Fund which pays-out a monthly amount to my heirs while I am still alive.

Please read my "Simplicity" link below.

Best wishes.
Taylor
Are you saying put 30 yrs expenses into total bond for a typical age retiree?
masonstone:

Generally, yes after taking other income into the equation. Any safe fixed-income security will suffice. It does not have to be Total Bond Market.

The most important consideration in retirement is to keep what you've got.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

retiringwhen
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Re: Asset Allocation once you reach your target

Post by retiringwhen » Tue Jul 03, 2018 7:31 pm

livesoft wrote:
Tue Jul 03, 2018 1:37 pm
I'm there and I like 60/40 for the rest of breathing days.
I too am there but still working, more out of not knowing how/where to retire and some fuzzy status with off-spring.

I am at 65/35, but considering moving towards a 50/50 AA at time of actual stop working retirement and using the glide slope to increase equities as I get older. That seems to have one of the best sequence of returns risk profile and has the potential to leave more on the table for legacy (a significant goal for the family, we were blessed and wish to pay forward.)

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Re: Asset Allocation once you reach your target

Post by masonstone » Tue Jul 03, 2018 7:33 pm

retiringwhen wrote:
Tue Jul 03, 2018 7:31 pm
livesoft wrote:
Tue Jul 03, 2018 1:37 pm
I'm there and I like 60/40 for the rest of breathing days.
I too am there but still working, more out of not knowing how/where to retire and some fuzzy status with off-spring.

I am at 65/35, but considering moving towards a 50/50 AA at time of actual stop working retirement and using the glide slope to increase equities as I get older. That seems to have one of the best sequence of returns risk profile and has the potential to leave more on the table for legacy (a significant goal for the family, we were blessed and wish to pay forward.)
What do you mean by using glide slope?

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sergeant
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Re: Asset Allocation once you reach your target

Post by sergeant » Tue Jul 03, 2018 7:36 pm

I'm retired and have more than hit my number. I like 50/50. I do go between 40/60-60/40 based on valuations and other criteria. We have 20 years of expenses in FI. We have pensions that provide 3x our base expenses.
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Re: Asset Allocation once you reach your target

Post by retiringwhen » Tue Jul 03, 2018 7:47 pm

masonstone wrote:
Tue Jul 03, 2018 7:33 pm
What do you mean by using glide slope?
A better term is glidepath. There is lot of discussion on this in the early retirement community, but my favorite discussion is by a guy who goes by the pseudonym ERN or Early Retirement Now.

Here is a link to one of his studies related to a glidepath: https://earlyretirementnow.com/2017/09/ ... lidepaths/ The whole series is pretty interesting for datanauts, this guy crunches with the best....

The TLDR version is that you start in a defensive position (e.g., 50/50) and as you age, you slowly increase your equity allocation to capture higher returns over the long run while having reduced volatility risk in the early years of retirement where the dreaded sequence of returns risk is greatest. It is a good plan for hedging against near term market drops, longevity and potentially increasing legacy values. it is not guaranteed to improve your account balance, but leads to somewhat less gloomy withdrawal rate assumptions.

Micheal Kitces started this discussion about 5 years ago: https://www.kitces.com/blog/should-equi ... ly-better/

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Re: Asset Allocation once you reach your target

Post by Sandtrap » Tue Jul 03, 2018 8:25 pm

Taylor Larimore wrote:
Tue Jul 03, 2018 7:14 pm
am wrote:
Tue Jul 03, 2018 6:38 pm
Taylor Larimore wrote:
Tue Jul 03, 2018 5:46 pm
masonstone wrote:
Tue Jul 03, 2018 12:27 pm
What will you asset allocation be once your reach your target for retirement. Let's assume that number is sufficient for your to live well for the rest of your life. Let's also assume you'd like to leave money for your children.
masonstone:

I fit the profile in your question. This is what I do and it has worked well:

1. I put the money necessary to "live well for the rest of your life" into Vanguard Total Bond Market Index Fund whose worst annual loss is -2.66%.

2. I put the rest into Vanguard 500 Index Fund which pays-out a monthly amount to my heirs while I am still alive.

Please read my "Simplicity" link below.

Best wishes.
Taylor
Are you saying put 30 yrs expenses into total bond for a typical age retiree?
masonstone:

Generally, yes after taking other income into the equation. Any safe fixed-income security will suffice. It does not have to be Total Bond Market.

The most important consideration in retirement is to keep what you've got.

Best wishes.
Taylor
Outstanding!!!
aloha
j :D

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Re: Asset Allocation once you reach your target

Post by Dandy » Tue Jul 03, 2018 8:44 pm

Put X years worth of drawdown in safer fixed income e.g. short term bond funds, FDIC products, Treasury Bills, etc. For me at age 70 X is to age 90 or currently 20 years. The rest, the "risk" portfolio, invest anyway you want -- for me that is 67/33. Overall 43/57.

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Re: Asset Allocation once you reach your target

Post by dwickenh » Tue Jul 03, 2018 8:49 pm

I am retired and have hit my number. I am 50/50 allocation because it just feels right and the 50% fixed income gives me 30 years of needed portfolio income. It(portfolio) is not that "big", I just don't need that much from the portfolio.

Good luck,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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Re: Asset Allocation once you reach your target

Post by AerialWombat » Tue Jul 03, 2018 8:54 pm

I’m 40, will hit my number next year. Started last year. Currently at 30/70 stocks/bonds in my paper securities portfolio, will stay there. This balances against the risk in my active business and rental property portfolio.

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Re: Asset Allocation once you reach your target

Post by AnnHW » Fri Jul 06, 2018 12:25 am

Taylor Larimore wrote: Tue Jul 03, 2018 5:46 pm


"I fit the profile in your question. This is what I do and it has worked well:

1. I put the money necessary to "live well for the rest of your life" into Vanguard Total Bond Market Index Fund whose worst annual loss is -2.66%.

2. I put the rest into Vanguard 500 Index Fund which pays-out a monthly amount to my heirs while I am still alive.

Please read my "Simplicity" link below.

Best wishes.
Taylor"

Taylor, again, you come to my rescue. I was excited to see your post when I logged on after a long absence.

You helped me with my original portfolio back in 1991. It was simple even then. Mainly TSM and TBM with a few tweaks along the way. By buying when the market was down in 2008 and saving 35% of our income in a 401k and contributing to our Roths, it has continued to grow.

I retired in 2003. My husband is still working but getting ready to retire next year. I am now more risk averse, and my main goal is preserving our assets.

I do have one question. If I don't have heirs to pay now, should I put everything in TBM, or would you advise I keep a portion in TSM, which I prefer over the VG 500?

I know I speak for many people in saying thank you for all you have done for so many of us here. You are my touchstone when it comes to investing.

Ann

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Re: Asset Allocation once you reach your target

Post by Call_Me_Op » Fri Jul 06, 2018 6:25 am

Interesting question. I think in this case, one's willingness to take risk might trump the need to take risk. For me, equities in the range of 30%-40% would be as much as I could stomach - assuming I had more than enough. The other 60%-70% wold be in high quality short-intermediate bonds.

I think what you leave to others must be secondary to ensuring that you have enough and you are comfortable with the swings induced by market fluctuations.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Asset Allocation once you reach your target

Post by TwstdSista » Fri Jul 06, 2018 6:33 am

I've always thought 60/40 throughout retirement. The husband will probably want 40/60. We might split the difference at 50/50.

Although, I truly like Taylor's "30 years of expenses" -- that might be the deciding factor re: bond allocation.

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Re: Asset Allocation once you reach your target

Post by dcabler » Fri Jul 06, 2018 6:35 am

I think everybody before me has covered this space with the usual wide range of answers for most questions here on BH. :D

I'm currently at 50/50 at age 57 and plan to retire somewhere between 2 and 5 years from now. Once retired, I plan for the equity portion to drift upwards over the years till about 60/40 or so then hold there forever. Plan is to use my own variant of VPW as a withdrawal method.

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Re: Asset Allocation once you reach your target

Post by Call_Me_Op » Fri Jul 06, 2018 6:37 am

I don't like the idea of "X years in expenses in bonds" (without some equities) because I would not want to be in my rocking chair watching my portfolio deplete toward zero. I would always keep some money in equities and view the portfolio as a whole, with the goal that the overall portfolio increases in value over time - even as I am withdrawing living expenses.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Taylor Larimore
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Re: Asset Allocation once you reach your target

Post by Taylor Larimore » Fri Jul 06, 2018 7:38 am

AnnHW wrote:
Fri Jul 06, 2018 12:25 am
Taylor Larimore wrote: Tue Jul 03, 2018 5:46 pm


"I fit the profile in your question. This is what I do and it has worked well:

1. I put the money necessary to "live well for the rest of your life" into Vanguard Total Bond Market Index Fund whose worst annual loss is -2.66%.

2. I put the rest into Vanguard 500 Index Fund which pays-out a monthly amount to my heirs while I am still alive.

Please read my "Simplicity" link below.

Best wishes.
Taylor"

Taylor, again, you come to my rescue. I was excited to see your post when I logged on after a long absence.

You helped me with my original portfolio back in 1991. It was simple even then. Mainly TSM and TBM with a few tweaks along the way. By buying when the market was down in 2008 and saving 35% of our income in a 401k and contributing to our Roths, it has continued to grow.

I retired in 2003. My husband is still working but getting ready to retire next year. I am now more risk averse, and my main goal is preserving our assets.

I do have one question. If I don't have heirs to pay now, should I put everything in TBM, or would you advise I keep a portion in TSM, which I prefer over the VG 500?

I know I speak for many people in saying thank you for all you have done for so many of us here. You are my touchstone when it comes to investing.

Ann
Ann:

I am very pleased to hear from you after 27 years! You and your husband are good examples of how "Mainly TSM and TBM with a few tweeks along the way" can work miracles.

Yes, once we have reached our goal, I think it is very important not to risk losing what we've got. I have not put "everything" into TBM--only what I could not afford to lose. Consider doing the same.

It was a thrill to hear from you. Give your hard-working husband my best wishes.

Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Oak&Elm
Posts: 281
Joined: Wed Mar 18, 2015 7:50 pm
Location: St Paul, MN

Re: Asset Allocation once you reach your target

Post by Oak&Elm » Fri Jul 06, 2018 9:16 am

The short answer is "yes" I will absolutely adjust my AA and re-balance once I hit my number. My IPS says to re-balance at $$$ or +- 5%. I think everyone would agree it's wise to have a plan and stick to it to keep the emotion out. On 1/27/18 I was within 2% of my goal, little farther away now but getting close again, once I hit the number it's 60/40 for the rest of my days.

GAAP
Posts: 549
Joined: Fri Apr 08, 2016 12:41 pm

Re: Asset Allocation once you reach your target

Post by GAAP » Fri Jul 06, 2018 9:50 am

My retirement plus something for the children is a period of 30+ years, at least two business cycles -- more with early retirement or a special-needs child. I don't see any reason to change my AA at the start of that period, since the portfolio has to support both an income flow and maintain some wealth for later distribution.

SGM
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Joined: Wed Mar 23, 2011 4:46 am

Re: Asset Allocation once you reach your target

Post by SGM » Fri Jul 06, 2018 1:14 pm

When I was accumulating I was 100% in stocks until a few years before retirement. Slowly I have decreased to about 70/30 stock to bond. All our needs are met by outside sources of income including farm rental income, small pension, TIAA-CREF annuity from a 403b, and some of our dividends from taxable accounts and a spousal benefit. Soon we will both receive our delayed to age 70 SS benefits. After age 70 I will start purchasing a ladder of SPIAs.


I feel I can be more aggressive than most retirees because I have multiple sources of income outside of the portfolios.

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Phineas J. Whoopee
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Joined: Sun Dec 18, 2011 6:18 pm

Re: Asset Allocation once you reach your target

Post by Phineas J. Whoopee » Fri Jul 06, 2018 1:28 pm

This is what I did, and a couple of years later I answered some questions about it.

For the record, I think an age-based asset allocation will be far more practical for most people.

PJW

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