At what age did you start moving into bonds?

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lazynovice
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Re: At what age did you start moving into bonds?

Post by lazynovice »

Back in the early 90s, my 401(k) administrator had a little quiz to assess risk tolerance. I ended up at 80/20 throughout my 20s and 30s. Once I found Bogleheads, around 40, I ended up closer to age in bonds but as we have gotten older with no debt and college fully funded, we have been age in bonds minus ten. In other words, we have been pretty close to 60/40 for a decade. We also have reduced our emergency fund which was never counted in the portfolio from about 3% of net worth to 1% of net worth.
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StormShadow
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Re: At what age did you start moving into bonds?

Post by StormShadow »

Started allocating a small percentage of bond funds in my early 30’s and have been gradually increasing the recent age. Glad I did, since I was able to rebalance during the most recent crash associated with COVID-19.
backpacker61
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Re: At what age did you start moving into bonds?

Post by backpacker61 »

I was 23, and bought $450 worth of 20 year CATS through Olde Discount Stockbrokers.

https://www.investopedia.com/terms/c/cats.asp

The coupon was 13.25% (that's not a typo); the value at maturity was $5000.
Wish now I'd bought 30 or 40 year CATS.
Last edited by backpacker61 on Sun Oct 18, 2020 3:13 pm, edited 2 times in total.
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HawkeyePierce
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Re: At what age did you start moving into bonds?

Post by HawkeyePierce »

I have held bonds ever since I started investing at 21.
otinkyad
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Re: At what age did you start moving into bonds?

Post by otinkyad »

Mid-forties, about a year or two after our IPS triggers called for: $1m retirement savings and annual contributions below 7% of the total. I didn’t want to buy bonds, based on their underperformance in 20-year periods, so I waited a while, but five years later I’m at 77/23 on our planned glide path and happy. I would make the same choices again.
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abuss368
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Re: At what age did you start moving into bonds?

Post by abuss368 »

I did the day I started with Vanguard. Provided ballast and dry powder to portfolio and this has worked well.
John C. Bogle: “Simplicity is the master key to financial success."
flaccidsteele
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Re: At what age did you start moving into bonds?

Post by flaccidsteele »

No bonds

Ever

Never saw the point, even after I retired in my 40s
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
absolute zero
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Re: At what age did you start moving into bonds?

Post by absolute zero »

otinkyad wrote: Sun Oct 18, 2020 3:40 pm Mid-forties, about a year or two after our IPS triggers called for: $1m retirement savings and annual contributions below 7% of the total. I didn’t want to buy bonds, based on their underperformance in 20-year periods, so I waited a while, but five years later I’m at 77/23 on our planned glide path and happy. I would make the same choices again.
I've never seen anyone mention annual contributions as a percent of retirement investments, used as an input to an AA decision. Sounds like an interesting concept.
Johm221122
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Re: At what age did you start moving into bonds?

Post by Johm221122 »

I've held fixed income since day one. Glad I did because i started in 1998(28 years old) and we had lost decade soon after.
Plus I have I bonds from 1999 and 2000
peregrino
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Re: At what age did you start moving into bonds?

Post by peregrino »

At age 36 I added bonds for the first time. I moved from 92% stock / 8% cash balance to 85% stock / 8% cash / 7% bonds. I have stayed between age-20 and age-25 in bonds&cash ever since.
Last edited by peregrino on Thu Jan 07, 2021 5:10 pm, edited 1 time in total.
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simplesimon
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Re: At what age did you start moving into bonds?

Post by simplesimon »

I've always been "age in bonds".
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yatesd
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Re: At what age did you start moving into bonds?

Post by yatesd »

I've always had some bonds. I tried following the advice age in bonds but always tilted more aggressive. I just turned 50 and have about 20% in bonds.

For the last 10 years or so...I do my best to mimic Vanguard's glide path for target funds. For me, it helps "keep me on track" and I readjust once or twice a year.
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grabiner
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Re: At what age did you start moving into bonds?

Post by grabiner »

I have always held bonds, but because I overweight riskier stocks, I have long had about the same risk as a 100%-stock portfolio. I am now 52, with essentially the same porrtfolio I held in 2004 at age 36: 90% stock then, 88% now, overweighting small-cap, value, and emerging markets.

I did have 100% net stock in 2013-2014; I held a bond allocation equal to my mortgage balance. I starting decreasing my net stock allocation by 2% per year in 2015 (age 47), which is why I am now at 88%. The net and gross allocations are now equal because I sold bonds to pay off the mortgage in March.
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Bama12
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Re: At what age did you start moving into bonds?

Post by Bama12 »

I'm 10% Bonds in my 401k at 47 years old. I have being thinking about going to 20% now, I was going to wait until I was 50.

I have 50% of my Roth in Wellesley Income-VWINX.
RJC
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Re: At what age did you start moving into bonds?

Post by RJC »

No reason to have bonds until you are 10-15 years from retiring especially if a) you have a recession-proof job and b) you can stomach the downturns of the market.
Elysium
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Re: At what age did you start moving into bonds?

Post by Elysium »

BV3273 wrote: Sun Oct 18, 2020 8:16 am I’m a bit curious on this. I am early 30s and I’m 100% equities. I have seen some tremendous growth this year due to some of my growth funds that I hold. I am curious as to when I should start the transition into Bond Funds. The bulk of my holdings are in my 401K.

5% - Company Stock - I’m currently in a black out period.
40% - SP
40% - Fidelity Growth
15% - Vanguard International Growth

I have Baird Aggregate Bond Fund - BAGIX - Available in my 401k.
BV3273: I got into bond funds as soon as I started investing, before I was 30. It helped that they were giving 6%+ returns with very low to no risk at that time. This allowed me to collect some nice dividends without experiencing price volatility, while I was figuring out how to go about investing in the stock market in a correct way. Bonds are always good starting investments, as well as during other stages of ones investing lifetime.
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quisp65
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Re: At what age did you start moving into bonds?

Post by quisp65 »

I created an AA where I bought fixed income (CDs) at Age 53 and retired age 54. I did have a small amount of short term corp bonds on & off through my life that I used as a cash account.
Plan: stock index/roughly 7 years cash investments, one-way balance market highs, slide withdrawal rate for comfort
DJZ
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Re: At what age did you start moving into bonds?

Post by DJZ »

I was all equity until I retired, age 58, when I started to buy bonds.
CurlyDave
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Re: At what age did you start moving into bonds?

Post by CurlyDave »

100% stocks and real estate to age 73. Then I put about 20% of stock portfolio into bonds.

I may be late to the party, but it was a good ride. Actually it still is.
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BV3273
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Re: At what age did you start moving into bonds?

Post by BV3273 »

Some great posts. It seems some folks are anywhere from age -10 to age -20 in bonds. Others seem to be using a CDs and other financial instruments that produce some yield. Others haven’t allocated to bonds until they become close to retirement. Others have always held them.
atdharris
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Re: At what age did you start moving into bonds?

Post by atdharris »

I have bonds in my 401k/Roth IRA, but I hold 100% stock in my taxable account. Overall, I maybe have 5% in bonds. I have my cash in CDs, but right now, I see no reason to hold much in bonds unless you're close to retirement, which I am far from.
drumboy256
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Re: At what age did you start moving into bonds?

Post by drumboy256 »

39. Realized after I did more reading that 100% equities is a fools errand (imo) because you're risking more than you're gaining. I think the other thing that a lot of people (including myself) didn't realize up until recently--- So you're in Bonds--- now what? The "right" kind of bonds is a big deal and while BND does a decent job of covering all of it, it still offers too much volatility than is worth it to be IN bonds. My personal 3-fund portfolio has my bonds split between FXNAX/BND and FUAMX for increased stability. Good luck!
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flyingaway
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Re: At what age did you start moving into bonds?

Post by flyingaway »

I first moved to bonds and held the funds seriously when Trump was elected and I was about 52.
hudson
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Re: At what age did you start moving into bonds?

Post by hudson »

At age 60, in 2008, I made a serious move to fixed income.
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wander
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Re: At what age did you start moving into bonds?

Post by wander »

I always have bonds in my portolio. It's more about stability for me. It swings between 10 and 20 % of our portfolio. When the markets were down, I rebalanced but then increased equity to 90%, and when the market was at record high, I rebalanced to 80% equity. I expect when we retire, my wife and I will be happy with 60/40 (equity/bonds) allocation.
investnoob
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Re: At what age did you start moving into bonds?

Post by investnoob »

I am 42 and still have no bond holdings. But that is misleading.

I have been a lurker here for a while. After the 2007/8 crash, I did not have much savings. But it coincided with a promotion, and I started saving the difference. By around 2013, I had a bit of cash and finally put most of it into stock index funds.

Since then, I have been only investing in stock index funds. I have used the rest of my savings to prepay the mortgage and maintain the house.
I guess you can say that this has been my "bond."

I have also been contributing about 10% of my gross pay to a pension plan for 20 years. So I haven't seen the need for bonds.

Lately I've been considering allocating 20 to 30% of new contributions/investments to a bond index fund.
goblue100
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Re: At what age did you start moving into bonds?

Post by goblue100 »

KingRiggs wrote: Sun Oct 18, 2020 8:34 am Moved to 70/30 when I hit 50 years old, and realized that losing half of my 100% equity portfolio in a downturn would make me very sad...

You'll know it's time when you feel the same way. :beer
I agree with this. I always had a very small allocation to bonds but was pretty much 90+% in equities. But the time came around age 56 when I realized what KingRiggs posted, losing what I had would hurt more than missing out on some gains. So now I'm 60/40, but probably won't go lower anytime soon.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns
ivgrivchuck
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Re: At what age did you start moving into bonds?

Post by ivgrivchuck »

I've always had some portion of my wealth in bonds or fixed-income assets.

I just don't want to risk losing all my money in certain very low probability scenarios.

Currently at 80/20.
44% VTI | 36% VXUS | 10% I-bonds | 10% EE-bonds
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SmileyFace
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Re: At what age did you start moving into bonds?

Post by SmileyFace »

I started with about 20% bonds - I didn't up that until I was a bit older but since my 40's I have been about Age-20 in bonds.
DSBH
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Re: At what age did you start moving into bonds?

Post by DSBH »

Late 40's, when I convinced myself that I probably had at most ~10 years of working left with Megacorp, and would not have enough time to work & earn back a several-year-long 30-35% stock market correction, so I glided to a 60/40 AA. It just happened that I got a package from Megacorp @59 3 years ago, and took advantage of it to retire.

I further decided a few weeks ago to move to a 50/50 AA, which is my current long term plan (all the trillion dollar companies made me a bit uncomfortable) - hopefully we won't have a Coronavirus-21 !!!
John C. Bogle: "Never confuse genius with luck and a bull market".
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