transitioning portfolio with age

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anaelmasri
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transitioning portfolio with age

Post by anaelmasri »

Hello all.
hope you are safe and well.

I have read alot about that investment based on age bracket is useful to dictate percentage of what goes towards stocks vs bonds etc
such as this example: https://www.aaii.com/asset-allocation?a=subnavHome

now I know the percentage varies depending on what age you start for example, how does one as they get older in age transition their investment from more risky or aggressive to less risky and more bond heavy - if that is the route to go. DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?

thanks
CurlyDave
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Re: transitioning portfolio with age

Post by CurlyDave »

I have been retired for 15 years.

I think of our portfolio as being like a giant ocean liner. Unless Moby Dick surfaces 100 yards dead ahead there is no reason at all to make any sudden changes of direction.

A couple of years ago I transitioned from 100% stocks to about 75/25 stocks/bonds over the course of a few months. Since then the stocks have grown to maybe 80%, so I take all of our withdrawals from the stock side. If/when stocks go down I will take withdrawals from the bonds.

If I was still in the accumulation stage I would make changes by adding money in whatever part of the portfolio was too low.
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anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

hi curlydave

thank you so much for your shared info

did you end up adding more funds as you transitioned? or did you sell stocks and used the sold share money to put towards bonds for example?
im curious about how the actual transition happens itself
Doctor Rhythm
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Re: transitioning portfolio with age

Post by Doctor Rhythm »

There are many approaches to gradually changing your asset allocation as you march towards retirement.
1. The simplest approach is to make someone else do it for you by investing in a target date fund.
2. If you are doing it yourself, you can preferentially purchase the asset class you want to move towards (typically fixed income). I prefer this to selling stock, but as your portfolio grows, you may find that you can’t get contribute fast enough to make a difference.
3. So, eventually you may be forced to sell one asset class (stock) to buy another (bonds) to make your portfolio more conservative.
4. When doing (3), think of tax implications. I try not to sell appreciated funds in taxable accounts as that would incur capital gains taxes. If I need to increase my %bonds, I would exchange stocks for bonds in an IRA or 401/403 account.
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anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

Doctor Rhythm wrote: Sat Sep 12, 2020 1:16 am There are many approaches to gradually changing your asset allocation as you march towards retirement.
1. The simplest approach is to make someone else do it for you by investing in a target date fund.
2. If you are doing it yourself, you can preferentially purchase the asset class you want to move towards (typically fixed income). I prefer this to selling stock, but as your portfolio grows, you may find that you can’t get contribute fast enough to make a difference.
3. So, eventually you may be forced to sell one asset class (stock) to buy another (bonds) to make your portfolio more conservative.
4. When doing (3), think of tax implications. I try not to sell appreciated funds in taxable accounts as that would incur capital gains taxes. If I need to increase my %bonds, I would exchange stocks for bonds in an IRA or 401/403 account.
thank you doctor. so by that logic it makes more sense to transition a portfolio is to allocate the contribution more towards bond vs stocks, with time, for example depending on age bracket ?
Doctor Rhythm
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Re: transitioning portfolio with age

Post by Doctor Rhythm »

anaelmasri wrote: Sat Sep 12, 2020 2:54 pm
Doctor Rhythm wrote: Sat Sep 12, 2020 1:16 am There are many approaches to gradually changing your asset allocation as you march towards retirement.
1. The simplest approach is to make someone else do it for you by investing in a target date fund.
2. If you are doing it yourself, you can preferentially purchase the asset class you want to move towards (typically fixed income). I prefer this to selling stock, but as your portfolio grows, you may find that you can’t get contribute fast enough to make a difference.
3. So, eventually you may be forced to sell one asset class (stock) to buy another (bonds) to make your portfolio more conservative.
4. When doing (3), think of tax implications. I try not to sell appreciated funds in taxable accounts as that would incur capital gains taxes. If I need to increase my %bonds, I would exchange stocks for bonds in an IRA or 401/403 account.
thank you doctor. so by that logic it makes more sense to transition a portfolio is to allocate the contribution more towards bond vs stocks, with time, for example depending on age bracket ?
Like I said, lots of approaches available, and the best one(s) for you depend on your circumstances. But, yeah, my preference is to buy the desired asset with new contributions. This avoids capital gains taxes and circumvents that horrible urge to time the market when selling stock funds.
livesoft
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Re: transitioning portfolio with age

Post by livesoft »

anaelmasri wrote: Fri Sep 11, 2020 11:24 pm DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?
Yes, this is exactly correct. One can do one, the other, or both and that would not be unusual for that to be done.
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Jerry55
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Re: transitioning portfolio with age

Post by Jerry55 »

Risky or Not is simply a matter of personal choice.

People with a solid retirement can take more risk, and those that need more income from those investments should take less risk...maybe.

IMHO, I believe that answer lies in your own personal choices...taking whatever guidance you feel you need. Good Luck.
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
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anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

Jerry55 wrote: Sat Sep 12, 2020 11:14 pm Risky or Not is simply a matter of personal choice.

People with a solid retirement can take more risk, and those that need more income from those investments should take less risk...maybe.

IMHO, I believe that answer lies in your own personal choices...taking whatever guidance you feel you need. Good Luck.
its interesting you put it that way cause also when you are young , which usually means lower income, you want to take a higher risk to avoid any time wasted not investing before
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dogagility
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Re: transitioning portfolio with age

Post by dogagility »

anaelmasri wrote: Sun Sep 13, 2020 1:04 am
Jerry55 wrote: Sat Sep 12, 2020 11:14 pm Risky or Not is simply a matter of personal choice.

People with a solid retirement can take more risk, and those that need more income from those investments should take less risk...maybe.

IMHO, I believe that answer lies in your own personal choices...taking whatever guidance you feel you need. Good Luck.
its interesting you put it that way cause also when you are young , which usually means lower income, you want to take a higher risk to avoid any time wasted not investing before
When young, a person has a lot of Personal Capital (ability to make money). By definition, a retired person has no Personal Capital. This needs to be considered when choosing an asset allocation.
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raiderjkwong
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Re: transitioning portfolio with age

Post by raiderjkwong »

Retirement adages:

Take risk to get rich; limit risk to stay rich

Invest in stocks to build wealth; Invest in bonds to preserve wealth
JVT
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Re: transitioning portfolio with age

Post by JVT »

I typically have contributions to the lower asset. For retirement accounts I typically rebalance to set AA twice a year and when changing AA I shift by 1% per month until I am at the new set point as a series of rebalances.
dbr
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Re: transitioning portfolio with age

Post by dbr »

Portfolio risk and return as set by stock/bond asset allocation is a matter of personal preference and judgement. It can be set by thinking through need, ability, and willingness to take risk. As a generalization this is going to result for most people in being more aggressive when young and more conservative when older, up to a point. Following some age in bonds rule reflects this generalization but I think people should be more thoughtful about their situation than blindly following a formula. As an example of the subtlety, if one is depending on portfolio withdrawals for income in retirement a small optimum in asset allocation probably exists at around 60% stocks. Unless one reduces the rate of withdrawal significantly not enough in stocks is a bad choice in retirement. Also in retirement the asset allocation decision can be end-run by using assets to acquire SPIAs or to use a TIPS ladder or some such liability matching (not a) "portfolio." This is just information and not advice.

In tax deferred accounts one can easily shift assets from stocks to bonds at any time. As time goes on simply investing more in the asset that needs to be increased is totally practical. The details may depend some on how much is in taxable accounts and in tax deferred accounts.

People can use target retirement funds that adjust the asset allocation for the investor. Sometimes this is a good choice. In many cases target retirement funds are more complicated to incorporate in a portfolio than simply holding stocks and fixed income separately.
Topic Author
anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

dbr wrote: Sun Sep 13, 2020 10:31 am Portfolio risk and return as set by stock/bond asset allocation is a matter of personal preference and judgement. It can be set by thinking through need, ability, and willingness to take risk. As a generalization this is going to result for most people in being more aggressive when young and more conservative when older, up to a point. Following some age in bonds rule reflects this generalization but I think people should be more thoughtful about their situation than blindly following a formula. As an example of the subtlety, if one is depending on portfolio withdrawals for income in retirement a small optimum in asset allocation probably exists at around 60% stocks. Unless one reduces the rate of withdrawal significantly not enough in stocks is a bad choice in retirement. Also in retirement the asset allocation decision can be end-run by using assets to acquire SPIAs or to use a TIPS ladder or some such liability matching (not a) "portfolio." This is just information and not advice.

In tax deferred accounts one can easily shift assets from stocks to bonds at any time. As time goes on simply investing more in the asset that needs to be increased is totally practical. The details may depend some on how much is in taxable accounts and in tax deferred accounts.

People can use target retirement funds that adjust the asset allocation for the investor. Sometimes this is a good choice. In many cases target retirement funds are more complicated to incorporate in a portfolio than simply holding stocks and fixed income separately.
recently been debating if I should do a roth ira and broker account (concerned about taxes even though I dont have alot $$ to invest) or go with a Roth solo 401k instead of the broker would be more savings long term?
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augryphon
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Re: transitioning portfolio with age

Post by augryphon »

After my last meeting with my FA, we transitioned from 60/40 to 50/50 stocks/bonds as we enter retirement. The biggest threat we see is a major loss in the first 3-4 yrs of retirement. We plan to begin raising our stock allocation after 5-7 years into our retirement if the markets are average. 65/35 will be as high as we go.
dbr
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Re: transitioning portfolio with age

Post by dbr »

anaelmasri wrote: Sun Sep 13, 2020 7:52 pm
recently been debating if I should do a roth ira and broker account (concerned about taxes even though I dont have alot $$ to invest) or go with a Roth solo 401k instead of the broker would be more savings long term?
I don't know if this Wiki page addresses your decision about Roth 401k: https://www.bogleheads.org/wiki/Traditional_versus_Roth
Elysium
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Re: transitioning portfolio with age

Post by Elysium »

anaelmasri wrote: Fri Sep 11, 2020 11:24 pm Hello all.
hope you are safe and well.

I have read alot about that investment based on age bracket is useful to dictate percentage of what goes towards stocks vs bonds etc
such as this example: https://www.aaii.com/asset-allocation?a=subnavHome

now I know the percentage varies depending on what age you start for example, how does one as they get older in age transition their investment from more risky or aggressive to less risky and more bond heavy - if that is the route to go. DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?

thanks
I have a different approach than picking an allocation based on just age, it is called goal based AA. It is calculated by working backwards from your desired total portfolio balance and your fixed income balance at the time of retirement.

It goes as follows: Current Fixed Income = (Current Total / Future Total) x Future Fixed Income. For example, assume current total is $500k, future goal is $1mm, and future fixed income percentage is 40%, then 500k/1mm * 0.40 will give current fixed income as 20%. This will keep shifting as your total portfolio balance grows, and you can adjust you AA as you get closer to your goals without worrying about age.
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Re: transitioning portfolio with age

Post by spdoublebass »

Elysium wrote: Mon Sep 14, 2020 8:44 am
anaelmasri wrote: Fri Sep 11, 2020 11:24 pm Hello all.
hope you are safe and well.

I have read alot about that investment based on age bracket is useful to dictate percentage of what goes towards stocks vs bonds etc
such as this example: https://www.aaii.com/asset-allocation?a=subnavHome

now I know the percentage varies depending on what age you start for example, how does one as they get older in age transition their investment from more risky or aggressive to less risky and more bond heavy - if that is the route to go. DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?

thanks
I have a different approach than picking an allocation based on just age, it is called goal based AA. It is calculated by working backwards from your desired total portfolio balance and your fixed income balance at the time of retirement.

It goes as follows: Current Fixed Income = (Current Total / Future Total) x Future Fixed Income. For example, assume current total is $500k, future goal is $1mm, and future fixed income percentage is 40%, then 500k/1mm * 0.40 will give current fixed income as 20%. This will keep shifting as your total portfolio balance grows, and you can adjust you AA as you get closer to your goals without worrying about age.
I like approach a lot. I still have a hard time deciding on what my end numbers should be. I guess just use 25 times annual need and pick something basic like 50/50 AA.
I'm trying to think, but nothing happens
dbr
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Re: transitioning portfolio with age

Post by dbr »

spdoublebass wrote: Mon Sep 14, 2020 11:49 am
I like approach a lot. I still have a hard time deciding on what my end numbers should be. I guess just use 25 times annual need and pick something basic like 50/50 AA.
It is very difficult to establish that some other choice is going to be better for sure. It is also very difficult to establish that if something is a better choice the amount by which it is better is meaningful.

Disclaimer: The above is pretty much my approach to the whole thing. As a retired person I just watch the progress of the portfolio (which is more than fine because we have been lucky with inflation and equity returns), watch overall average withdrawals (which are fine because we have not gone crazy with spending money and inflation is low), and watch the asset allocation (which is fine even though we don't rebalance anymore).
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anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

Elysium wrote: Mon Sep 14, 2020 8:44 am
anaelmasri wrote: Fri Sep 11, 2020 11:24 pm Hello all.
hope you are safe and well.

I have read alot about that investment based on age bracket is useful to dictate percentage of what goes towards stocks vs bonds etc
such as this example: https://www.aaii.com/asset-allocation?a=subnavHome

now I know the percentage varies depending on what age you start for example, how does one as they get older in age transition their investment from more risky or aggressive to less risky and more bond heavy - if that is the route to go. DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?

thanks
I have a different approach than picking an allocation based on just age, it is called goal based AA. It is calculated by working backwards from your desired total portfolio balance and your fixed income balance at the time of retirement.

It goes as follows: Current Fixed Income = (Current Total / Future Total) x Future Fixed Income. For example, assume current total is $500k, future goal is $1mm, and future fixed income percentage is 40%, then 500k/1mm * 0.40 will give current fixed income as 20%. This will keep shifting as your total portfolio balance grows, and you can adjust you AA as you get closer to your goals without worrying about age.
hello elysium. thanks for the share! can you please share any links about the goal based AA? how does one calculate future fixed income?
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anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

dbr wrote: Mon Sep 14, 2020 8:24 am
anaelmasri wrote: Sun Sep 13, 2020 7:52 pm
recently been debating if I should do a roth ira and broker account (concerned about taxes even though I dont have alot $$ to invest) or go with a Roth solo 401k instead of the broker would be more savings long term?
I don't know if this Wiki page addresses your decision about Roth 401k: https://www.bogleheads.org/wiki/Traditional_versus_Roth
how would you split your investments into your brokerage taxable account and your roth ira. where would you put your stocks, etfs and bonds in respectively?
Last edited by anaelmasri on Mon Sep 14, 2020 2:49 pm, edited 1 time in total.
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Sheepdog
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Re: transitioning portfolio with age

Post by Sheepdog »

I am copying a post which I made last year which should answer your question, but in retirement only.
I am 86, retired approaching 21 years, living off of savings and SS only. I entered retirement in 1998 with about 57% stocks and started then to gradually change my stock allocation to 100 minus my age (age 67...33% stock. 70...30%, etc.). At age 77 I reached 23% stock and held that as my future stock allocation and the rest in bonds, cash, I Bonds and CDs, Oh yeah, some SPIAs also. However, over the last half dozen years, my stock percentage has grown a little bit due to taking money needs from non-stock savings and market performance. Stocks now comprise 27%. I will not allow that to go higher, but I expect that the stock market may soon reduce it automatically back to 23% and I won't feel sad as my official stock allocation is still 23%.
Another year has passed since I wrote that...now 87 though and in my 22nd retirement year. I remain at 27% stocks and the investments grew beyond withdrawals.
.Woof
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dbr
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Re: transitioning portfolio with age

Post by dbr »

anaelmasri wrote: Mon Sep 14, 2020 2:16 pm
dbr wrote: Mon Sep 14, 2020 8:24 am
anaelmasri wrote: Sun Sep 13, 2020 7:52 pm
recently been debating if I should do a roth ira and broker account (concerned about taxes even though I dont have alot $$ to invest) or go with a Roth solo 401k instead of the broker would be more savings long term?
I don't know if this Wiki page addresses your decision about Roth 401k: https://www.bogleheads.org/wiki/Traditional_versus_Roth
how would you split your investments into your brokerage taxable account and your roth ira. where would you put your stocks, etfs and bonds in respectively?
I wouldn't because I don't have any Roth accounts and never will. But if I did I would have to look at the details of the situation including 401k, IRA, taxable accounts, current and expected income tax rates, total amount of assets involved current and future, preferred asset allocation and so on. I suppose if you were to post all the details following this format posters would have some specific suggestions: viewtopic.php?f=1&t=6212
Elysium
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Re: transitioning portfolio with age

Post by Elysium »

spdoublebass wrote: Mon Sep 14, 2020 11:49 am
Elysium wrote: Mon Sep 14, 2020 8:44 am
anaelmasri wrote: Fri Sep 11, 2020 11:24 pm Hello all.
hope you are safe and well.

I have read alot about that investment based on age bracket is useful to dictate percentage of what goes towards stocks vs bonds etc
such as this example: https://www.aaii.com/asset-allocation?a=subnavHome

now I know the percentage varies depending on what age you start for example, how does one as they get older in age transition their investment from more risky or aggressive to less risky and more bond heavy - if that is the route to go. DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?

thanks
I have a different approach than picking an allocation based on just age, it is called goal based AA. It is calculated by working backwards from your desired total portfolio balance and your fixed income balance at the time of retirement.

It goes as follows: Current Fixed Income = (Current Total / Future Total) x Future Fixed Income. For example, assume current total is $500k, future goal is $1mm, and future fixed income percentage is 40%, then 500k/1mm * 0.40 will give current fixed income as 20%. This will keep shifting as your total portfolio balance grows, and you can adjust you AA as you get closer to your goals without worrying about age.
I like approach a lot. I still have a hard time deciding on what my end numbers should be. I guess just use 25 times annual need and pick something basic like 50/50 AA.
A lot of people have trouble with figuring out what their retirement number should be and what their retirement AA should be. However, to me this isn't as difficult as figuring out your current AA, and that is where the calculation above takes guess work out of the equation that many age based allocations do. Your target balance and bond percentage have guidance in the form of what the SWR will allow and what it needs to continue being a SWR. For instance, we do do know 4% as a general rule of thumb and that will translate to 25 X expenses, so that's your retirement goal. Your bond allocation should be based what is needed to maintain SWR in retirement. This we know too based on studies that a 60/40 portfolio is sustainable, so 40% in bonds is a good estimate, you could also go lower to 35% or 30% if you have accumulated more and/or have pensions and other sources of income. Thus, you have everything you need to calculate your current AA using the above method.
Elysium
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Re: transitioning portfolio with age

Post by Elysium »

anaelmasri wrote: Mon Sep 14, 2020 2:15 pm
Elysium wrote: Mon Sep 14, 2020 8:44 am
anaelmasri wrote: Fri Sep 11, 2020 11:24 pm Hello all.
hope you are safe and well.

I have read alot about that investment based on age bracket is useful to dictate percentage of what goes towards stocks vs bonds etc
such as this example: https://www.aaii.com/asset-allocation?a=subnavHome

now I know the percentage varies depending on what age you start for example, how does one as they get older in age transition their investment from more risky or aggressive to less risky and more bond heavy - if that is the route to go. DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?

thanks
I have a different approach than picking an allocation based on just age, it is called goal based AA. It is calculated by working backwards from your desired total portfolio balance and your fixed income balance at the time of retirement.

It goes as follows: Current Fixed Income = (Current Total / Future Total) x Future Fixed Income. For example, assume current total is $500k, future goal is $1mm, and future fixed income percentage is 40%, then 500k/1mm * 0.40 will give current fixed income as 20%. This will keep shifting as your total portfolio balance grows, and you can adjust you AA as you get closer to your goals without worrying about age.
hello elysium. thanks for the share! can you please share any links about the goal based AA? how does one calculate future fixed income?
The goal based allocation calculation is very simple, it's exactly as I posted above, you can plug that into a spreadsheet right where your IPS is (mine is) and as you update your balances it will re-calculate and show you where your bond percentage should be. Just point to a empty cell in the spreadsheet and place this = <cell where current total is> / <cell where future total is> x <future fixed income percentage>.

As for how you determine future fixed income, just follow the SWR based studies, assuming 4% SWR then you'd need a baseline portfolio of 60/40 stocks/bonds to sustain that for 30 years. You can run simulations in tools like Portfolio Visualizer using various allocations yourself to see what is sustainable. Some of this is dependent on your personal situation such as existence of a pension and/or other forms of incomes.
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anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

Elysium wrote: Mon Sep 14, 2020 5:12 pm
spdoublebass wrote: Mon Sep 14, 2020 11:49 am
Elysium wrote: Mon Sep 14, 2020 8:44 am
anaelmasri wrote: Fri Sep 11, 2020 11:24 pm Hello all.
hope you are safe and well.

I have read alot about that investment based on age bracket is useful to dictate percentage of what goes towards stocks vs bonds etc
such as this example: https://www.aaii.com/asset-allocation?a=subnavHome

now I know the percentage varies depending on what age you start for example, how does one as they get older in age transition their investment from more risky or aggressive to less risky and more bond heavy - if that is the route to go. DOes one sell their investment to do so? or invest more heavily in bonds vs stocks when I am 60 for example?

thanks
I have a different approach than picking an allocation based on just age, it is called goal based AA. It is calculated by working backwards from your desired total portfolio balance and your fixed income balance at the time of retirement.

It goes as follows: Current Fixed Income = (Current Total / Future Total) x Future Fixed Income. For example, assume current total is $500k, future goal is $1mm, and future fixed income percentage is 40%, then 500k/1mm * 0.40 will give current fixed income as 20%. This will keep shifting as your total portfolio balance grows, and you can adjust you AA as you get closer to your goals without worrying about age.
I like approach a lot. I still have a hard time deciding on what my end numbers should be. I guess just use 25 times annual need and pick something basic like 50/50 AA.
A lot of people have trouble with figuring out what their retirement number should be and what their retirement AA should be. However, to me this isn't as difficult as figuring out your current AA, and that is where the calculation above takes guess work out of the equation that many age based allocations do. Your target balance and bond percentage have guidance in the form of what the SWR will allow and what it needs to continue being a SWR. For instance, we do do know 4% as a general rule of thumb and that will translate to 25 X expenses, so that's your retirement goal. Your bond allocation should be based what is needed to maintain SWR in retirement. This we know too based on studies that a 60/40 portfolio is sustainable, so 40% in bonds is a good estimate, you could also go lower to 35% or 30% if you have accumulated more and/or have pensions and other sources of income. Thus, you have everything you need to calculate your current AA using the above method.

My AA is shifting soon from the aggressive bracket to moderate - (90/10 to 70/30) yet I feel that being at age 36, bonds might be too soon to invest in currently? also is it better to invest in bonds via a taxable account or a Roth IRA?
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Jerry55
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Re: transitioning portfolio with age

Post by Jerry55 »

anaelmasri wrote: Sun Sep 13, 2020 1:04 am
Jerry55 wrote: Sat Sep 12, 2020 11:14 pm Risky or Not is simply a matter of personal choice.
People with a solid retirement can take more risk, and those that need more income from those investments should take less risk...maybe.
IMHO, I believe that answer lies in your own personal choices...taking whatever guidance you feel you need. Good Luck.
its interesting you put it that way cause also when you are young , which usually means lower income, you want to take a higher risk to avoid any time wasted not investing before

You gave multiple options, including your comment, "When You're 60".
I've had multiple choices over the last 35 years I've been investing, I am 65 yo, and retired in 2012 at age 57.
For me, it IS a matter of choice, depending on income at what point in time is available to me, and you, in the future.

For me ? I'm in the TSP with 80/10/10 in the C fund, S fund and International fund, which is aggressive indeed and have been there since 2009'ish
My CSRS retirement provides more than adequate funds, so my TSP, my Vanguard ROTH IRA (Wellesley), Taxable Fund Wellington and Dodge & Cox funds are there because I don't need the funds, hence, my statement "Is a matter of personal choice". Prior to RMD requirements, in 3-5 years, I'll look again.
What will you have, and what will you be when you turn 55, 60, 65. 70 ?
That sir, will be a matter of your personal choice, when you hit those benchmarks, where things will continuously change.

Your future is not yet written. Mine is....so far.
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
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anaelmasri
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Re: transitioning portfolio with age

Post by anaelmasri »

Jerry55 wrote: Wed Sep 16, 2020 7:24 pm
anaelmasri wrote: Sun Sep 13, 2020 1:04 am
Jerry55 wrote: Sat Sep 12, 2020 11:14 pm Risky or Not is simply a matter of personal choice.
People with a solid retirement can take more risk, and those that need more income from those investments should take less risk...maybe.
IMHO, I believe that answer lies in your own personal choices...taking whatever guidance you feel you need. Good Luck.
its interesting you put it that way cause also when you are young , which usually means lower income, you want to take a higher risk to avoid any time wasted not investing before

You gave multiple options, including your comment, "When You're 60".
I've had multiple choices over the last 35 years I've been investing, I am 65 yo, and retired in 2012 at age 57.
For me, it IS a matter of choice, depending on income at what point in time is available to me, and you, in the future.

For me ? I'm in the TSP with 80/10/10 in the C fund, S fund and International fund, which is aggressive indeed and have been there since 2009'ish
My CSRS retirement provides more than adequate funds, so my TSP, my Vanguard ROTH IRA (Wellesley), Taxable Fund Wellington and Dodge & Cox funds are there because I don't need the funds, hence, my statement "Is a matter of personal choice". Prior to RMD requirements, in 3-5 years, I'll look again.
What will you have, and what will you be when you turn 55, 60, 65. 70 ?
That sir, will be a matter of your personal choice, when you hit those benchmarks, where things will continuously change.

Your future is not yet written. Mine is....so far.
hello and thank you so much for your response. pardon my ignorance but what is TSP, c fund, s fund?
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celia
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Re: transitioning portfolio with age

Post by celia »

anaelmasri wrote: Fri Sep 18, 2020 12:48 am hello and thank you so much for your response. pardon my ignorance but what is TSP, c fund, s fund?
TSP stands for Thrift Savings Plan which is a tax-deferred plan for federal employees in the U.S. The funds they offer are designated by letters.
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Jerry55
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Re: transitioning portfolio with age

Post by Jerry55 »

anaelmasri wrote: Fri Sep 18, 2020 12:48 am hello and thank you so much for your response. pardon my ignorance but what is TSP, c fund, s fund?
The TSP = Thrift Savings Plan, same as a 401K basically. Basically INDEX Funds C, S, I, F (Bonds) and G (Gov specially issued Bonds)

The Other L funds there, followed by 2020, 2030, 2040, etc are Life Funds, as when one expects to retire, that adjust automatically as one ages.
They are nothing more but combinations of the C, S, I, F and G funds by proportion

The TSP C Fund = Common Stock = S & P 500 fund index fund

The TSP S Fund = (Small Cap Stock Index Investment Fund) invests in stocks of small to medium-sized U.S. companies. The TSP S Fund seeks to match the performance of the Dow Jones U.S. Completion Total Stock Market Index, a broad market index made up of stocks of U.S. companies not included in the S&P 500 Index.

The TSP I
(International Fund) = an international stock index fund that seeks to track the investment performance of the Morgan Stanley Capital International Europe, Australasia, and Far East Index, also known as the MSCI EAFE.


These are only open to Government & Military individuals for the most part.....including Congress Critters.

https://www.tsp.gov/funds-individual/
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
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