Retirees: what is your AA?

Engaging in sloth · Post by **Engaging in sloth** » Sat Jun 06, 2020 3:31 pm

Hello. I am very curious about Boglehead forum member retirees AA. I just retired in late May. Our AA is now 10/90 (cash). We have pensions that will cover > 50% portion of our monthly expenses (expenses variable depending upon vacations of course). Ages: 59. Will have SS eventually.

Our AA was 50/50 but in March lowered AA because we wanted $ available for a housing change: larger home and in a more expensive town. Have not started looking yet.

Anyway, learning what fellow forum community members do for AA will provide valuable insight.

Thank you

sport · Post by **sport** » Sat Jun 06, 2020 4:32 pm

We have the ability to take risk, so we could have a 64/40 AA. However, we don't need to take risk, so we could have a 25/75 AA. We have settled on a 35/65 AA with excursions between 30/70 and 40/60.

Engaging in sloth · Post by **Engaging in sloth** » Sat Jun 06, 2020 4:43 pm

sport wrote: ↑Sat Jun 06, 2020 4:32 pm We have the ability to take risk, so we could have a 64/40 AA. However, we don't need to take risk, so we could have a 25/75 AA. We have settled on a 35/65 AA with excursions between 30/70 and 40/60.

Interesting. I was thinking off raising up to 25-30% equities

jebmke · Post by **jebmke** » Sat Jun 06, 2020 4:45 pm

40/60 - set when I retired in 2007. Now planning to go hands off and only re-balance on the downside.

socaldude · Post by **socaldude** » Sat Jun 06, 2020 4:47 pm

Retired. AA is 50/40/10(cash). Modest pension and SS, I could get by on pen./SS. I use TotlStkMkt(let it keep rolling in a Roth) and TBM ( some monthly income). My mantra is "twenty years,always think of investments in 20 year timelines." Helps me back away from the ledge.

Chuck107 · Post by **Chuck107** » Sat Jun 06, 2020 4:49 pm

.....

pkcrafter · Post by **pkcrafter** » Sat Jun 06, 2020 4:53 pm

Started retirement at 30-70, but discovered It wasn’t quite enough to maintain 4% withdrawal rate over a long period of time, so am now at 40% and that is working fine.

Paul

AlwaysaQ · Post by **AlwaysaQ** » Sat Jun 06, 2020 4:55 pm

Age late 70s and 35/65.

Vanguard Fan 1367 · Post by **Vanguard Fan 1367** » Sat Jun 06, 2020 4:59 pm

We were at about 55/45 until the recent market drop. At the moment we are 70/30. I wish bonds were a better investment but I am not excited about their current yields.

Murdock7591 · Post by **Murdock7591** » Sat Jun 06, 2020 4:59 pm

70/30 (with 2 years in emergency fund in the 30% part) 70% is all VTSAX.
My age is 63.

Rob54keep · Post by **Rob54keep** » Sat Jun 06, 2020 5:05 pm

At 66, I keep it in the range of 35-40%/55-65%/5-10%. I will start SS at 70, no pension.

mindboggling · Post by **mindboggling** » Sat Jun 06, 2020 5:06 pm

67 y/o. 30/70 allocation. Pension + SS.

Rosencrantz1 · Post by **Rosencrantz1** » Sat Jun 06, 2020 5:21 pm

It's about 75/25 (equity/bonds) in the IRAs and 100/0 in the Roths and 100/0 in the taxable brokerage.

And, we have several years expenses in HYS/CDs as an EF.

We are fortunate in that we have pension income greater than our expenses - so, we can take some additional equity risk. I do not see lowering our exposure to stocks in the IRAs or Roths or taxable in the foreseeable future.

We are 60 and 62 yo.

Third Son · Post by **Third Son** » Sat Jun 06, 2020 5:25 pm

60 yo... 40/60 Two funds

Sconie · Post by **Sconie** » Sat Jun 06, 2020 5:26 pm

Early 70's-----60 equities, 30% bonds, 10% cash. 20% of equity is total international.

Housedoc · Post by **Housedoc** » Sat Jun 06, 2020 5:28 pm

Rosencrantz1 wrote: ↑Sat Jun 06, 2020 5:21 pm It's about 75/25 (equity/bonds) in the IRAs and 100/0 in the Roths and 100/0 in the taxable brokerage.

And, we have several years expenses in HYS/CDs as an EF.

We are fortunate in that we have pension income greater than our expenses - so, we can take some additional equity risk. I do not see lowering our exposure to stocks in the IRAs or Roths or taxable in the foreseeable future.

We are 60 and 62 yo.

This is very close to our allocation. 2 non government pensions and no debt other than usual monthly items. Home paid off 12 years ago. 62 & 61

investor.saver1 · Post by **investor.saver1** » Sat Jun 06, 2020 5:30 pm

Age 71. 25/75 (equities/fixed income). Don't need to take risk and don't enjoy drama. I'm planning to hold this AA for the balance of my life.

chuckb84 · Post by **chuckb84** » Sat Jun 06, 2020 5:33 pm

60/40, classic 3 fund. Pension plus SS that cover essentials, so a little more aggressive than I would be otherwise.

Broken Man 1999 · Post by **Broken Man 1999** » Sat Jun 06, 2020 5:36 pm

Desired AA is 50/50. We were at that at start of 2020.

I did some rebalancing, so now with the recent equity pop we are at 53% equities, and 47% bonds, as of Friday.

My bond holdings rose, so even after rebalancing I still have more $$$ in bonds than I started the year with. And, after Friday our equities have totally recovered dollar-wise. Our portfolio is up right at 2% from start of 2020.

IF equities continue their run, and get near the previous highs, I will have a much improved portfolio dollar-wise.

I really care much more about my bond funds dollar-wise, than the equity ETFs dollar-wise. Our bond funds are our safe base.

So, at this time I am agreeable to let the equities run a bit, but I am also watching my bond funds, dollar-wise. I expected to see the bond funds decrease over time, and that is what is happening

How fast our bond funds decline will determine when I rebalance.

Being greedy, what I would love to see would be equities continuing their rapid rise, whilst our bond funds decline at a much slower rate. I'm pretty sure everyone would like to see that happen. That would be pretty sweet. Unlikely to happen, though.

Broken Man 1999

LilyFleur · Post by **LilyFleur** » Sat Jun 06, 2020 5:38 pm

60, single, pension provides almost 50% of yearly income. No debt, but very HCOL area with high state taxes. Still helping my children who are grad school students a total of about $700/month. Will start $10k/yr in SS at 62 or 63, depending on Roth conversions. After the kids are out of school, I will help them on down payments.

AA: 50% equities, 50% cash. No bonds, got out of bonds during the Covid crash with minimal loss. Still thinking about what to do with my cash but for now it is in a holding pattern and FDIC insured. I am risk tolerant with my equities and extremely risk averse with my cash.

Fclevz · Post by **Fclevz** » Sat Jun 06, 2020 5:39 pm

4% cash
96% Target Retirement 2030 (68/32)
56, retired 14 years, small pension, 9 years until social security at 65.
Retired early, but still in Target Retirement 2030 as it is age appropriate. Investing by ‘risk tolerance’ is way too vague for me.

J295 · Post by **J295** » Sat Jun 06, 2020 5:47 pm

Age 60. Generally we are 110-age in “stocks” since transition from full time at 53. No debt. Rebalance annually. Have a very simple IPS we follow. One footnote is we have other income.

Honestly, many others who “retired” like we did around 2010 forward (we were 2013) have had a pretty smooth ride. I take very very little credit for our solid gains since transition as the timing was just plain fortunate (I track annual net worth and the trajectory has been strong). A rising tide raises all ships.

Stinky · Post by **Stinky** » Sat Jun 06, 2020 5:50 pm

75/25. Living on the edge. Generous pension allows us to take more equity risk.

Leif · Post by **Leif** » Sat Jun 06, 2020 5:51 pm

About 10 years before retirement I was thinking 30/70 or 40/60. However, I expect a low WR so I feel comfortable with 50/50.

retire57 · Post by **retire57** » Sat Jun 06, 2020 5:54 pm

50/50 with the 3-fund portfolio. Expenses covered by SS and pensions at the moment.

mailman781 · Post by **mailman781** » Sat Jun 06, 2020 5:56 pm

Your AA should depend on many things. Do you have pensions enough so that you don't have to depend on your investments. How much risk can you take and still sleep well at night? What standard of living do you wish to maintain? How does you spouse feel about the AA? And so on. The opinions you receive here may not fit your situation.

To answer your question, we are 82 years of age and we have a 30/70 AA. Our pensions more than cover our living expenses, so we need to take little risk. We use all balanced funds. Our RMDs are set up for auto payment on set dates.

Good luck.

scrabbler1 · Post by **scrabbler1** » Sat Jun 06, 2020 6:04 pm

Mine is 37/63. I'm a 57-year-old early retiree. My taxable account's AA is slightly more bond-heavy than my rollover IRA's AA.

DetroitRick · Post by **DetroitRick** » Sat Jun 06, 2020 6:11 pm

64 (retired long time) and 59 (semi-retired):
In total - we're 25% fixed income and cash (the split between the two varies year-to-year), 3.5% other, rest in equity positions

Accounts being used for retirement funding are all about 30% fixed income and cash, but my aggregate is skewed by another account that is almost always 100% equity (so 25% overall).

RadAudit · Post by **RadAudit** » Sat Jun 06, 2020 6:19 pm

I'm 73. DW is 69. AA is 50 / 50 and composed of 2 LifeStrategy funds. Pensions, SS, and cap gains and interest / dividends from a small trust make up 2/3 of the annual budgeted expenditures. The rest is from from the RMDs. That portion of the RMD that is in excess of the budgeted expenditures is reinvested in the trust. (Think - no cruise this year.)

PSM · Post by **PSM** » Sat Jun 06, 2020 6:40 pm

*Ages 64/64. Retired couple. No debt. Small pension does not pay all expenses. Waiting to start some Social Security at 70.
*Like to sleep well at night. Rebalance as needed for our low risk tolerance, and when profitable. Have enough assets.
*Current: 14% US, 10% International, 25% Bonds, 2% Gold etf, 49% (cash, CD's, Money Mkt, online savings).
*Market timer at times, and I don't care about that. Took profits in Feb.; reinvested on some dips; took more profits since then. Sitting on some cash.
*We have more now than last year and on Jan 1, even when we were as much as 50% in stocks. Don't mind some opportunity cost.
*What works for me may not work for anybody. For me, I think it's okay to rebalance rather than hold on to an arbitrary asset allocation through thick and thin. Again, we like sleeping soundly. We did even when we were down over $200k in March. Because we had plenty of years in secure cash. And now, if for today only, all that was down has recovered.
*Goal in retirement has been safety and preventing financial ruin through a downturn which would erode wealth and last for several years.
*Will probably invest more in US, international, and REIT etfs in coming months and years, back up to about 34-40% of total, when
investment conditions improve further.
*Don't care if we miss out some growth; would rather avoid devastation. In other words, I know that an FDIC insured dollar will
probably be worth a little less next year, but it won't be down 30%. We have the assets to be patient. Net worth is good. We don't worry about
"missing out." We have relatively low expenses and 0 debt. A safe withdrawal rate of 2-3% works fine for us.
*Use our IRAs to rebalance easily, with no tax consequences. Love taking profits and reinvesting later, continuing to use basic funds like
VTI, VOO, VXUS and a few others, plus private pension funds that are in our total allocation too.
*Each household has its own situation. Good luck with yours. These are challenging times for millions of people.

Engaging in sloth · Post by **Engaging in sloth** » Sat Jun 06, 2020 7:00 pm

PSM wrote: ↑Sat Jun 06, 2020 6:40 pm *Ages 64/64. Retired couple. No debt. Small pension does not pay all expenses. Waiting to start some Social Security at 70.
*Like to sleep well at night. Rebalance as needed for our low risk tolerance, and when profitable. Have enough assets.
*Current: 14% US, 10% International, 25% Bonds, 2% Gold etf, 49% (cash, CD's, Money Mkt, online savings).
*Market timer at times, and I don't care about that. Took profits in Feb.; reinvested on some dips; took more profits since then. Sitting on some cash.
*We have more now than last year and on Jan 1, even when we were as much as 50% in stocks. Don't mind some opportunity cost.
*What works for me may not work for anybody. For me, I think it's okay to rebalance rather than hold on to an arbitrary asset allocation through thick and thin. Again, we like sleeping soundly. We did even when we were down over $200k in March. Because we had plenty of years in secure cash. And now, if for today only, all that was down has recovered.
*Goal in retirement has been safety and preventing financial ruin through a downturn which would erode wealth and last for several years.
*Will probably invest more in US, international, and REIT etfs in coming months and years, back up to about 34-40% of total, when
investment conditions improve further.
*Don't care if we miss out some growth; would rather avoid devastation. In other words, I know that an FDIC insured dollar will
probably be worth a little less next year, but it won't be down 30%. We have the assets to be patient. Net worth is good. We don't worry about
"missing out." We have relatively low expenses and 0 debt. A safe withdrawal rate of 2-3% works fine for us.
*Use our IRAs to rebalance easily, with no tax consequences. Love taking profits and reinvesting later, continuing to use basic funds like
VTI, VOO, VXUS and a few others, plus private pension funds that are in our total allocation too.
*Each household has its own situation. Good luck with yours. These are challenging times for millions of people.

yes I agree having an AA an investor is comfortable with is extremely important

RCL · Post by **RCL** » Sat Jun 06, 2020 7:27 pm

investor.saver1 wrote: ↑Sat Jun 06, 2020 5:30 pm Age 71. 25/75 (equities/fixed income). Don't need to take risk and don't enjoy drama. I'm planning to hold this AA for the balance of my life.

^^^ This is exactly our ages and AA. Ditto not needing any (little) risk.
Can't believe how calm I have able to be during this last crisis.

galeno · Post by **galeno** » Sat Jun 06, 2020 7:28 pm

50/50

WoodSpinner · Post by **WoodSpinner** » Sat Jun 06, 2020 7:31 pm

OP,

We are a 60/59 yo couple and we are currently at 55/45. Fixed income is 11% Short Term Treasuries, 34% Intermediate Term Treasuries. Pension covers about 70% of our living expenses and when I start SS that will cover the rest. Stayed the course in March and rebalanced per my IPS (although lots of mental angst on rebalancing).

Overall pretty happy with our plan — although I did have to fine-tune how I would manage a bond-floor safety net when rebalancing during a major downturn.

WoodSpinner

Receo · Post by **Receo** » Sat Jun 06, 2020 8:05 pm

100% stocks with a generous pension. I’m 56 years old.

f4d · Post by **f4d** » Sat Jun 06, 2020 8:13 pm

80 yo. Enough income for expenses and travel. Changed TSP AA from 60/40 to 80/20 in early May...no regrets. The reason: Interest rates on risk-free Treasuries that compete with stocks for investors' dollars will remain far below historic norms for many years to come.

ruralavalon · Post by **ruralavalon** » Sat Jun 06, 2020 8:18 pm

Engaging in sloth wrote: ↑Sat Jun 06, 2020 3:31 pm Hello. I am very curious about Boglehead forum member retirees AA. I just retired in late May. Our AA is now 10/90 (cash). We have pensions that will cover > 50% portion of our monthly expenses (expenses variable depending upon vacations of course). Ages: 59. Will have SS eventually.

Our AA was 50/50 but in March lowered AA because we wanted $ available for a housing change: larger home and in a more expensive town. Have not started looking yet.

Anyway, learning what fellow forum community members do for AA will provide valuable insight.

Thank you

We are age 74, I retired 9+ years ago, no debt, no pension or annuity, our asset allocation is 50/50 stocks/bonds with no cash allocation. Social Security and Required Minimum Distributions (RMDs) taken automatically every month from my rollover IRA cover our living expenses and more.

Steelersfan · Post by **Steelersfan** » Sat Jun 06, 2020 8:23 pm

Early 70's, pensions cover expenses. Asset allocation is 60%/40%, has been since I retired and I plan to stick with that.

I've gone a little above 60% currently since bonds don't seem good right now - low yield and high risk of price falling if/when interest rates rise.

GerryL · Post by **GerryL** » Sat Jun 06, 2020 8:27 pm

Early 70s, retired 6 years. SS and tiny pension cover basic expenses. I am comfortable at 60/40 but won't fret if AA goes to 50/50. My financial plan supports an annual spending target that is more than what I have been spending.

baconavocado · Post by **baconavocado** » Sat Jun 06, 2020 8:36 pm

70/30, early 60s, retired.

earlyout · Post by **earlyout** » Sat Jun 06, 2020 8:38 pm

Retired in 2000 with a 60:40 AA. Modified AA in 2010 to 50:50 and have held it there. Mostly S&P 500 and total bond indices. At the bottom in March AA was 40:60. Can get by on SS if I have to so I'm comfortable with 50:50.

Lalamimi · Post by **Lalamimi** » Sat Jun 06, 2020 8:44 pm

ages 66 and 68, 2 yrs retired (well, I was laid off so that was that). Was in the middle of rebalancing (just moved away from Edward Jones), so we are currently 44/26/30 cash buying little of total market and total bonds as prices dip to eventually be at 50/50. or 60/40. Depends. We started SS in January, it covers expenses since we can't travel....

heyyou · Post by **heyyou** » Sat Jun 06, 2020 8:59 pm

60/40 since retiring with a not-enough pension in late 2005.

friar1610 · Post by **friar1610** » Sat Jun 06, 2020 9:11 pm

75/74. Good pension. Two SS taken early. Nominal goal is 50/50 (with 3% cash included in fixed). Currently at about 47% equity with about 23% of that international. An equity allocation of 45-50% with 20-25% international is fine for us. Fixed allocation more than exceeds a dollar minimum to ensure adequate LMP for my wife if I'm not around.

cloneman33 · Post by **cloneman33** » Sat Jun 06, 2020 9:25 pm

61, retired a year. Currently 50/35/15. Equities/Bonds/Cash. Rebalance in 5% up or down bands.

Sheepdog · Post by **Sheepdog** » Sat Jun 06, 2020 10:26 pm

Retired at 65 (wife at 62) No pension, spending comes from investments and SS.
Now: my age is almost 88,
Present allocation: 27/70/3. Have been at 23 to 27% stock since 2008.
Average annual withdrawal has been 4.57% and my investment total is within 1% of my maximum over these years (nominal, of course).

Dandy · Post by **Dandy** » Sun Jun 07, 2020 6:39 am

Age 72 overall allocation is 42/58

1. roughly follow keeping enough "safe" assets to fund spouse's potential needs to age 90 should I die first.
2. pension, SS and RMDs exceed needs
3. Withdraw from combination of equities and fixed income unless equities have a bad decline.
4. Have no need to take additional risk

Call_Me_Op · Post by **Call_Me_Op** » Sun Jun 07, 2020 6:47 am

jebmke wrote: ↑Sat Jun 06, 2020 4:45 pm 40/60 - set when I retired in 2007. Now planning to go hands off and only re-balance on the downside.

Does this mean only sell stocks and not buy them - or the opposite.

Call_Me_Op · Post by **Call_Me_Op** » Sun Jun 07, 2020 6:52 am

RCL wrote: ↑Sat Jun 06, 2020 7:27 pm
investor.saver1 wrote: ↑Sat Jun 06, 2020 5:30 pm Age 71. 25/75 (equities/fixed income). Don't need to take risk and don't enjoy drama. I'm planning to hold this AA for the balance of my life.
^^^ This is exactly our ages and AA. Ditto not needing any (little) risk.
Can't believe how calm I have able to be during this last crisis.

I am somewhat younger than you guys, but I agree that having a relatively low allocation to equities really helped take the emotion out of the recent historic pull-back. Many thought we were going down to Great Depression levels (which was certainly within the realm of possibility), and I was not worried one bit.

Call_Me_Op · Post by **Call_Me_Op** » Sun Jun 07, 2020 6:54 am

Sheepdog wrote: ↑Sat Jun 06, 2020 10:26 pm Retired at 65 (wife at 62) No pension, spending comes from investments and SS.
Now: my age is almost 88,
Present allocation: 27/70/3. Have been at 23 to 27% stock since 2008.
Average annual withdrawal has been 4.57% and my investment total is within 1% of my maximum over these years (nominal, of course).

Nice job Sheepdog!