What is your AA, given your age? and, Why?

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grabiner
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Re: What is your AA, given your age? and, Why?

Post by grabiner » Wed May 08, 2019 7:52 pm

goblue100 wrote:
Wed May 08, 2019 7:27 am
grabiner wrote:
Sun Apr 15, 2018 9:26 pm

The home is also the reason for the net asset allocation. The home will provide me a place to live at a low cost; however, for the next 11 years, I will be paying a fixed amount of money to the bank. Bonds which provide me enough money to make that mortgage payment cannot also contribute to my retirement needs, so I don't count them. When I bought the home, my bond holding was exactly equal to my mortgage, so I was 100% net stock; now, I am 92% net stock (and the mortgage is smaller as well).
So in your asset allocation, someone with $100,000 in equities and $100,000 in bonds would be 100% stocks if the interest from the bonds is earmarked for debt service? If that is how you want to calculate it, of course that is your business, but I don't think most people do it that way.
I agree that most people don't calculate that way; it is mathematically correct but doesn't fit the psychological description. If I had chosen to pay cash for the home (I didn't, because that would have required selling stock for a huge capital gain), I would have been 100% stock. I chose to keep the same amount of stock as if I had paid cash. Similarly, if I decide to pay off my mortgage, I will sell bonds to pay it off (by selling taxable stock and moving an equal amount from bonds to stock in my employer plan.)

However, the net effect of what most people do should be similar. When I bought the home, my risk tolerance increased, giving me a reason to hold fewer bonds; when I took out the mortgage, I had a reason to hold more bonds. The combination of these two meant that my percentage allocation didn't change much.
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Re: What is your AA, given your age? and, Why?

Post by Lucere » Wed May 08, 2019 9:32 pm

Age 38.

Just reallocated to 85/15 (from 95/5). Funds are simply Total US Market and Total US Bond Market.

We're expecting our first child, and as you might imagine, that is associated with many considerations toward being more careful, including AA.

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Re: What is your AA, given your age? and, Why?

Post by TomCat96 » Wed May 08, 2019 11:39 pm

ohai wrote:
Wed May 01, 2019 2:21 pm
33 and 1.5x leverage.
This was an interesting response.
How are you leveraging?

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Re: What is your AA, given your age? and, Why?

Post by burt » Thu May 09, 2019 6:06 am

Retired and age 63 with 30/70 (stock/bond).
I've met my goal and have no need to take risk.
Standard of living and savings are modest, so don't have the ability to take risk.

burt

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Re: What is your AA, given your age? and, Why?

Post by Nowizard » Thu May 09, 2019 6:56 am

Ours is 60/40 in retirement (in our 70's) because we have no need to be less conservative and like the idea of saving for our heirs.
Tim

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Re: What is your AA, given your age? and, Why?

Post by SovereignInvestor » Thu May 09, 2019 7:29 am

Age 29 and 100% equities and will stay that way until a couple years before retirement. Will alter retirement based on equities if need be.

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Re: What is your AA, given your age? and, Why?

Post by Admiral » Thu May 09, 2019 7:47 am

grabiner wrote:
Sun Apr 15, 2018 9:26 pm
confusedinvestor wrote:
Sun Apr 15, 2018 4:56 pm
Grabiner,

Why do you have such a "high" stock % (84% gross) vs typical target date composite benchmark ? Is this b/c of your "need" to take risk ? or, your "willingness / iron stomach" to take risk ? or you know the stocks are safe in long run, given your experience on 2002+2008 and your understanding of capital markets ?
I have long had the willingness to take the risk. But I also have the ability to take the risk, as I have a secure job situation, with a pension. And my only recent change to a more aggressive asset allocation was when my retirement became even more secure, as I bought a home (and thus will no longer pay rent in retirement). And despite being 50, I'm not that close to retiring.

The home is also the reason for the net asset allocation. The home will provide me a place to live at a low cost; however, for the next 11 years, I will be paying a fixed amount of money to the bank. Bonds which provide me enough money to make that mortgage payment cannot also contribute to my retirement needs, so I don't count them. When I bought the home, my bond holding was exactly equal to my mortgage, so I was 100% net stock; now, I am 92% net stock (and the mortgage is smaller as well).
Grabiner, perhaps you can expand/expound on this? For the vast majority of folks--even older folks--they have nowhere near enough taxable investments (bonds or otherwise) to pay off their mortgage. (My NW is 7 figures and I know I don't.)

In this situation, the choice is pretty simple, because there is no lump-sum available to pay off a mortgage (unless one takes a loan or a penalized retirement account distribution). The choice is:

a) stop contributing to retirement accounts and direct that money to the mortgage (which is a pay down, not pay off strategy) or
b) continue to pay the mortgage while also investing in bonds (at whatever allocation) so as to reduce the overall portfolio's volatility

Owning a home (or more accurately owing the bank money for one) does nothing to reduce portfolio volatility. You can call it a reverse bond or whatever, but the two are uncorrelated assets. Therefore, unless one is comfortable with massive potential losses, some fixed income is needed. It's not a choice of "hold bonds or pay off the mortgage" it's a choice of "contribute to retirement, or don't and pre-pay."

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Re: What is your AA, given your age? and, Why?

Post by SovereignInvestor » Thu May 09, 2019 7:59 am

Owning a home doesn't reduce portfolio volatility but it locks in rent costs to a degree.

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Re: What is your AA, given your age? and, Why?

Post by Admiral » Thu May 09, 2019 8:06 am

SovereignInvestor wrote:
Thu May 09, 2019 7:59 am
Owning a home doesn't reduce portfolio volatility but it locks in rent costs to a degree.
That may be true but my annual expenses have little to do with how I set my asset allocation.

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Re: What is your AA, given your age? and, Why?

Post by SovereignInvestor » Thu May 09, 2019 8:24 am

Admiral wrote:
Thu May 09, 2019 8:06 am
SovereignInvestor wrote:
Thu May 09, 2019 7:59 am
Owning a home doesn't reduce portfolio volatility but it locks in rent costs to a degree.
That may be true but my annual expenses have little to do with how I set my asset allocation.
Fair point. For some it does...higher annual expense means more required bonds for some people like retired or near retired

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Re: What is your AA, given your age? and, Why?

Post by Drengr » Thu May 09, 2019 3:18 pm

Age 38 Wife is 34
80:20 Stocks/Bonds. Feel this is a reasonable allocation for our risk tolerance.
Was 100:0 from 2006 (when I started investing) to Nov 2017. Realized I had been lucky over this period and corrected my allocation based on various recommendations here. Thank you!

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Re: What is your AA, given your age? and, Why?

Post by csan » Thu May 09, 2019 3:23 pm

Age 24, 25% Bonds, 75% equities.

Equities are mostly VOO but some individual stocks are in there as well. Mostly trying to adhere to the Boglehead bonds vs. stocks guidance (i.e., not more than 75% of either but not less than 25% either). Probably will stay at 75% equities through grad school into my early 30s. I most likely will follow through with doing mostly VOO but will likely add sector ETFs and international exposure.

Prior to this (a month ago), I was 100% stocks (mostly individual companies) but realized I wanted to be smarter about storing the gains I've made since I opened my Roth IRA as an undergrad which led me to change my allocation to what it is now.

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Re: What is your AA, given your age? and, Why?

Post by xenochrony » Thu May 09, 2019 3:30 pm

Age 50. Prior to 50, was 80/20 (stock/bond), currently gliding to 75/25 through preferential buying of bonds with new $ (contributions). Why? I need, and am willing, to take on more risk, being a late starter. VG AA questionnaire agrees with me. My equity split is 80/20 (US/Intl [DM only]), EM seems to volatile for my tastes (timeline, of 15 years).

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Re: What is your AA, given your age? and, Why?

Post by WoodSpinner » Thu May 09, 2019 3:30 pm

Background:
  • Ages: 59 (me), 58 (wife)
  • Retired: Jan2018
  • Avg Asset Spend: 3% (5% 59-70, 1% 71-90)

    Current Asset Allocation
    Under normal circumstances the goal is a 60/40 allocation (Stocks/Bonds with 25% of the Stocks invested Internationally). During a major downturn in stocks, we may temporarily lower this to no lower than 40/60.

    Note: To reduce Sequence of Returns Risk during the early part of Retirement We have planned to increase the Equities allocation from 52% (at age 58) to 60% (at age 66).

    Image

    Two Parts – One Portfolio:
    1. Liability Matching Portion is designed to fund a rolling 10 years of Expenses throughout Retirement and is invested in very safe assets that are not expected to be significantly impacted by market swings.
    2. Growth Portion will fund unanticipated expenses, protect against inflation and provide an inheritance for our heirs. This is invested in US and International Stocks and has the most risk (or reward).
    Liability Matching Portion
    Image

    Liability Matching Portion -- Re-balance Thresholds
    1. Always fully fund the Cash and Short-Term Bonds allocations (CurrentYear+1 to CurrentYear+3 Expenses).
    2. Intermediate Bonds may be sold to purchase Equities in the Growth Portion to insure a minimum 40/60 portfolio.
    3. Extra funds from the Portfolio may also be invested in Intermediate Bonds to insure a maximum 60/40 portfolio
    Growth Portion
    Image

    Growth Portion – Re-balance Thresholds.
    1. 75% of the Portfolio will be invested in low-cost index funds of US equities (e.g. VTI).
    2. 25% of this Portfolio should be invested in International Equity Funds (e.g. VXUS).

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Re: What is your AA, given your age? and, Why?

Post by burt » Thu May 09, 2019 5:26 pm

burt wrote:
Thu May 09, 2019 6:06 am
Retired and age 63 with 30/70 (stock/bond).
I've met my goal and have no need to take risk.
Standard of living and savings are modest, so don't have the ability to take risk.

burt
Interesting thread.
After I replied I got to thinking... AA is much more than just age.
I didn't read all 200+ posts, but I'm pretty sure someone came to the same conclusion.
AA is highly dependant on individual circumstances.

- Amount of assets.
- Withdrawal rate 1% or 6%. (oatmeal or Maybach)
- Good health or expensive continuing healthcare.
- Heirs self sufficient or dependant.
- Heirs responsible or not. (maybe a trust could mitigate this)

I'm sure others can think of circumstances which would impact AA other than just age.

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Re: What is your AA, given your age? and, Why?

Post by G12 » Thu May 09, 2019 5:42 pm

My wife and I are most likely both retired within the next 12 months, I have been pretty much the last 9 years but dabble in some things. We are ages 55/54, soon to be 56/55 by September. Our equity allocation bounces between 55-60% depending on the market, bonds and short term reserves roughly 25-30%, and commercial RE investment 13-15%. Why? Who knows, things happen, opportunities occur, etc. Real reason is the ROI/cash flow on the RE is something I can't match in current equity/fixed income markets by a long shot, and if I really wanted to reduce equity holdings it would create tax events, so we ride as is and hope to be able to convert some tax deferred accounts to Roths in the future. I am fairly certain my wife will retire by April 2020 and we will leave GA, really tired of what has become a 10 month allergy season for me, micro particulate matter in the air especially during the summer for someone with asthma, and my wife desires a less humid place to live. We will likely kick around in the west for 3-5 years until we are as certain as one can be in an unknown area as to more permanently reside. This topic doesn't ask, but I estimate we are ~ 55/45 taxable/tax deferred including the RE, + our long term residence will be sold adding to taxable until we buy a residence. It's a little mentally challenging leaving somewhere after 30 years where you enjoy a relatively low cost of living, yet neither one of us want to live here much longer and our existing holdings spin off enough income to be pretty comfortable before pension/SSI/IRAs etc are tapped in future years.

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Re: What is your AA, given your age? and, Why?

Post by ETadvisor » Thu May 09, 2019 6:44 pm

Early 40s and late 30s

His 401k 85/15
His Roth 100/0
Her Roth 100/0
Emergency Fund - all cash

Overall equity/fixed (w/EF)
78/22

Overall equity/fixed (w/o EF)
88/12

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Re: What is your AA, given your age? and, Why?

Post by CoastalWinds » Thu May 09, 2019 7:05 pm

Age 38, 80% Equities (28% Intl), 20% FI (EF is rolled into FI portion). Hope to retire at age 60, with SS at 70.

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grabiner
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Re: What is your AA, given your age? and, Why?

Post by grabiner » Thu May 09, 2019 8:00 pm

Admiral wrote:
Thu May 09, 2019 7:47 am
grabiner wrote:
Sun Apr 15, 2018 9:26 pm
The home is also the reason for the net asset allocation. The home will provide me a place to live at a low cost; however, for the next 11 years, I will be paying a fixed amount of money to the bank. Bonds which provide me enough money to make that mortgage payment cannot also contribute to my retirement needs, so I don't count them. When I bought the home, my bond holding was exactly equal to my mortgage, so I was 100% net stock; now, I am 92% net stock (and the mortgage is smaller as well).
Grabiner, perhaps you can expand/expound on this? For the vast majority of folks--even older folks--they have nowhere near enough taxable investments (bonds or otherwise) to pay off their mortgage. (My NW is 7 figures and I know I don't.)

In this situation, the choice is pretty simple, because there is no lump-sum available to pay off a mortgage (unless one takes a loan or a penalized retirement account distribution). The choice is:

a) stop contributing to retirement accounts and direct that money to the mortgage (which is a pay down, not pay off strategy) or
b) continue to pay the mortgage while also investing in bonds (at whatever allocation) so as to reduce the overall portfolio's volatility

Owning a home (or more accurately owing the bank money for one) does nothing to reduce portfolio volatility.
Owning a home, independent of the mortgage, does nothing to reduce portfolio volatility, but it reduces the risk of that volatility. If your portfolio loses 20% of its value, you will have 20% less to spend in retirement. But if you own a home, your standard of living will not decline by 20%, since you still have just as much housing as you had before the decline. (This is why I changed to a more aggressive asset allocation after buying my home.)

Conversely, having debt increases the risk of portfolio volatility if you don't count it as part of your portfolio. If you have a loan and your portfolio loses 20% of its value, you still have to make the loan payments, so your spendable money decreases by more than 20%. If you count the loan as a negative bond, this goes away; if you have $400K in stock, $100K in bonds, and $100K in loans, the total is $400K, and a 20% decline in the stock market costs you $80K, which is 20% of the total.

Another way to see this is to see that mortgage prepayments have the same effect on your retirement as fixed-income investments. If you buy a $10K ten-year bond yielding 4%, you will have $14,802 more to spend (or invest) in ten years. If you pay $10K against your ten-year mortgage at 4%, you will also have $14,802 more to spend (or invest) in ten years, because you will get rid of $14,802 in loan payments.
Therefore, unless one is comfortable with massive potential losses, some fixed income is needed. It's not a choice of "hold bonds or pay off the mortgage" it's a choice of "contribute to retirement, or don't and pre-pay."
And I agree with this. It isn't usually a good idea to make extra mortgage payments unless you have maxed out your 401(k) (unless there is an unusually large benefit such as getting rid of PMI).
Wiki David Grabiner

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Re: What is your AA, given your age? and, Why?

Post by nesdog » Thu May 09, 2019 9:22 pm

Retiring at 65-1/2 end of next month. Very conservative 25/60/15. Working my way back to 30% equities. Will make further adjustments after we see how well expenses really track, but don't expect any surprises.

Expected WR after taking SS at 67 will be roughly 3%. We do have sufficient resources and plenty of cushion.
Insert clever comment here...

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Re: What is your AA, given your age? and, Why?

Post by Hiwatter » Thu Sep 26, 2019 11:31 am

In my early 40's here

87% Stock (75% US and 12% International)
8% Bond
5% Cash (in a gov't money market fund)... I realize this is on the high side per Boglehead standards, but we are a one income family and I work as a contractor in a somewhat volatile industry. This is our emergency fund.

I plan to increase my bond allocation by 1% or 2% per year. I believe this will put me on track for when I retire... hopefully at age 60.

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Re: What is your AA, given your age? and, Why?

Post by doc4sleep » Thu Sep 26, 2019 12:10 pm

Current age 63.

Planning to work till RMD's at age 70 just because I love my job and compensated really well!

Currently 100% debt free.

50% in real estate including residence and 2 vacation/rental properties in locations we enjoy
50% index funds split 50:50 SCV and TSM

We have never owned a bond or bond fund (30+ years investing)

Never sold a single share during crash of 2000 or 2008 but did get worried when real estate and stock market took a dive together. This was probably due to the nearly $2M real estate debt we were carrying. Instead of selling low we added more term life insurance, sold a property and started on a path to get debt free.

With only average rates of return along with contributions our 401k could potentially double in the next 7 years. Even if it stays the same or diminishes by half we are ok as we have no debt. We are investing to give large chunks of it away and pass on to future generations.
Last edited by doc4sleep on Thu Sep 26, 2019 12:16 pm, edited 2 times in total.

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Re: What is your AA, given your age? and, Why?

Post by Slapshot » Thu Sep 26, 2019 12:11 pm

Age 72, retired with pension and wife has SS. AA is 30/70. Pretty conservative, but we have no reason to assume much risk. As long as we beat inflation by a few points, we're happy. Pension and SS take care of all the bills with some left over.
This time, like all times, is the best of times if we but know what to do with it.

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Re: What is your AA, given your age? and, Why?

Post by Carlos Danger » Thu Sep 26, 2019 12:13 pm

Age: Late 30s
Asset Allocation: 50% Equities, 40% Bonds (heavy on extended duration treasuries), 10% Gold
Why: Growth and inflation are slowing and have been since last fall. Q3 2018 was the cycle peak and the time to shift. Bonds and Gold are crushing equities over that time period. Will move equities back to 60% when the cycle troughs. Hopefully Q4 or Q1 2020 with no recession. I do the Bogle-approved "market-timing" and move from 60 to 50% equities when I feel the time is right.

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Re: What is your AA, given your age? and, Why?

Post by WhiteMaxima » Thu Sep 26, 2019 12:16 pm

Age 40s
AA 50/20/10/10 (US/Intl/BOND/Cash&Gold)

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Re: What is your AA, given your age? and, Why?

Post by RaleighStClaire » Thu Sep 26, 2019 2:36 pm

Looks like it's been 7 years since I last posted. Not sure what prompted me to load up the ol bogleheads today but here I am :)

36y/o
100% equities -- 60% US SV, 20% Intl SV, 20% EM SV. It's sure been a bad 12mo for the portfolio! :greedy
Where's that red one gonna go?

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Re: What is your AA, given your age? and, Why?

Post by lukestuckenhymer » Thu Sep 26, 2019 2:46 pm

32 y/o

I was 100% equities (Total World Stock) up until this year, when I added a 10% fixed income allocation (70% VBTLX/30% VTABX). I know the expected return of 100% equities over the long term is always higher, but it can't hurt to add a small cushion. Without bonds, there's no rebalancing bonus in the case of a drastic downturn.

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Re: What is your AA, given your age? and, Why?

Post by 1789 » Thu Sep 26, 2019 3:31 pm

Me 35, Wife: 35

100% US stocks with some cash worth 6 months of emergency expenses

90% TSM/S&P500
10% SCV .

Thanks to BH philosophy it has been a big progress from moving very risky individual stocks/ETFs to low cost index funds. May need to add some bonds at 40s. I will need to make this more simpler as i go, so wife can take over after i'm gone. Maybe something like 70/30 TSM/TBM eventually. Well sure i could be gone tomorrow too but it is early to move to bonds at this point.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

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Re: What is your AA, given your age? and, Why?

Post by TomCat96 » Thu Sep 26, 2019 9:58 pm

burt wrote:
Thu May 09, 2019 5:26 pm
burt wrote:
Thu May 09, 2019 6:06 am
Retired and age 63 with 30/70 (stock/bond).
I've met my goal and have no need to take risk.
Standard of living and savings are modest, so don't have the ability to take risk.

burt
Interesting thread.
After I replied I got to thinking... AA is much more than just age.
I didn't read all 200+ posts, but I'm pretty sure someone came to the same conclusion.
AA is highly dependant on individual circumstances.

- Amount of assets.
- Withdrawal rate 1% or 6%. (oatmeal or Maybach)
- Good health or expensive continuing healthcare.
- Heirs self sufficient or dependant.
- Heirs responsible or not. (maybe a trust could mitigate this)

I'm sure others can think of circumstances which would impact AA other than just age.
"AA is much more than just age."
Yes very much so.

The combination of other life circumstances will change the analysis substantially. Some non-age factors which can be dispositive of one's ability to tolerate a 100% stock allocation for example can include trust funds, likelihood of inheritance, vested government pension, lack of personal obligations, substantial wealth, and substantial income.

A large argument for a more conservative allocation comes from personal consumption needs during economic downturns.
In other words, if we take ability and willingness out of the AA issue, we are left with the idea that "when it rains it pours"

A person with 20M in their portfolio isn't going to eat their way through their millions even in a large drop. If they do, its not the AA that was the issue.

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Re: What is your AA, given your age? and, Why?

Post by angelescrest » Thu Sep 26, 2019 10:08 pm

Slapshot wrote:
Thu Sep 26, 2019 12:11 pm
Age 72, retired with pension and wife has SS. AA is 30/70. Pretty conservative, but we have no reason to assume much risk. As long as we beat inflation by a few points, we're happy. Pension and SS take care of all the bills with some left over.
Wouldn’t the opposite be true? If pension and SS cover everything and then some, wouldn’t you be in a position to take more risk in your portfolio?

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Re: What is your AA, given your age? and, Why?

Post by Small Savanna » Thu Sep 26, 2019 10:43 pm

I'm 59 and my spouse is 54. We are both still working, with a goal of retiring within five years. We are 67% stocks and 33% bonds. The overriding factor that keeps us mostly in stocks is research showing that the probability of being able to maintain a 4% withdrawal rate (or any withdrawal rate) for 30 to 40 years is much higher for stock heavy portfolios than bond heavy portfolios. For example, scroll down to the table at this link:

http://www.livefreemd.com/percentage-of-stocks/

Other factors that influence our AA toward being able to take more risk: since we are both still working and in fairly secure jobs, in the event of a downturn in the next few years we could delay retirement by a year or two. Also, I have a defined benefit pension and if we optimize our social security retirement ages (me at 70, spouse at 62) we will have most of our core expenses covered irrespective of the performance of our investments.

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Re: What is your AA, given your age? and, Why?

Post by Slapshot » Fri Sep 27, 2019 11:40 am

angelescrest wrote:
Thu Sep 26, 2019 10:08 pm
Slapshot wrote:
Thu Sep 26, 2019 12:11 pm
Age 72, retired with pension and wife has SS. AA is 30/70. Pretty conservative, but we have no reason to assume much risk. As long as we beat inflation by a few points, we're happy. Pension and SS take care of all the bills with some left over.
Wouldn’t the opposite be true? If pension and SS cover everything and then some, wouldn’t you be in a position to take more risk in your portfolio?
That's one way of looking at it. But why take risk if not necessary? I feel that what we're doing is hitting the sweet spot for us.
This time, like all times, is the best of times if we but know what to do with it.

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Re: What is your AA, given your age? and, Why?

Post by SGM » Fri Sep 27, 2019 11:53 am

In my early 70s and retired 5 years with an AA of about 60/40. I don't follow this percentage too closely. Any sales of stock or dividends generally go into a muni bond fund. Most of the time before retirement I was 100% in stock and stock funds. It did not bother me if valuations were low when I was working because I continued to dollar cost average into stocks on a regular basis.

I don't need to increase the size of my portfolio. Delayed SS until 70, pensions and other non-portfolio income cover more than our expenses. I don't need an emergency fund. We do have a muni money market fund because it is paying pretty close to many muni bond funds.

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Re: What is your AA, given your age? and, Why?

Post by jsaver » Fri Sep 27, 2019 1:15 pm

Late 40s. 80/20 with a glide-path to 50/50 at 65. I'm essentially following the Vanguard target date fund AA for now. I'm not sure I agree with it continuing to 30/70 past that point, so we'll see. I hope to achieve my retirement goal by 62 and retire between 62-65. I'm currently at 750K trying to get to 2M, contributing 50K/year, anticipating on SS providing 40-60% of retirement income beginning at age 70.

I've played with different portfolios and AA using the various simulators (cfiresim, firecalc, portfolio charts, etc) and the big takeaway for me using my assumed contribution level and time period is that almost any AA will do the job. A stock heavy portfolio might get me there in 6-15 years, whereas a bond heavy portfolio is more likely to take 10-14 years. So for now, I figure may as well try to reel in the range.

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Re: What is your AA, given your age? and, Why?

Post by BW1985 » Fri Sep 27, 2019 1:26 pm

RaleighStClaire wrote:
Thu Sep 26, 2019 2:36 pm
Looks like it's been 7 years since I last posted. Not sure what prompted me to load up the ol bogleheads today but here I am :)

36y/o
100% equities -- 60% US SV, 20% Intl SV, 20% EM SV. It's sure been a bad 12mo for the portfolio! :greedy
100% SCV? That's interesting. Ride or die with it I guess.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

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NeoNeo
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Re: What is your AA, given your age? and, Why?

Post by NeoNeo » Fri Sep 27, 2019 2:06 pm

40yo single male homeowner w high home equity, 5-month emergency fund (these are not included below). Roughly a 70/30 stock/bond+cash portfolio. Investments breakdown as per Personal Capital website:
~64% equities { 42.3% US / 21.9% intl }
~9% alternatives {mostly REITs, little GLD}
~23% bonds {19.5% US / 3.7% int }
~4% cash {high, will move more into US stocks over time}

Morningstar type style-box allocations for non-REIT US equities below show small/midcap tilt (may tilt more later)

Large cap (V|C|G): 9.6% | 10.3% | 9.7%
Mid cap (V|C|G): 2.3% | 2.5% | 2.5%
Small cap (V|C|G): 1.8% | 1.8% | 1.7%

Plan is to maintain the rough 70/30 in through the next recession, then potentially go more aggressive or maintain. In 15 years at age age 55, may reduce risk to 60% equities.

Monster99
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Re: What is your AA, given your age? and, Why?

Post by Monster99 » Fri Sep 27, 2019 2:17 pm

62 years old retired. 32/64/4 (S/B/C) I have a pension and pull 1-1.5% from taxable for expenses. Most likely my DW will be buying old men drinks in Florida after I pass.....😀

radeon962
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Re: What is your AA, given your age? and, Why?

Post by radeon962 » Fri Sep 27, 2019 2:43 pm

Age 51 and 70/30 currently.

Was 100/0 in my 20's, 85/15 for most of my 30's and then 75/25 for most of my 40's.

Didn't have a lot of excess funds to invest in my 20's but put away what I could and then started to get more serious as the pay increased in my 30's and 40's. As I started to accumulate what were larger sums of money, for me, I started to set floors with my bond allocation.

Used to slice and dice but went 3 fund portfolio back around 2009 based on information from here and have kept it that way.

Gliding to 65/35 at 55 then 60/40 at 60 and then plan to stay there.

Why, no real good reason other than when I started getting serious about investing I wanted to set floors when I reached certain levels at $250K, $500k, $750k and $1M. Hit those targets so no reason to change my plan at this point.

Just keep plowing money in as best I can and ignore the noise.

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5th_Dimension
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Re: What is your AA, given your age? and, Why?

Post by 5th_Dimension » Fri Sep 27, 2019 3:21 pm

60 years old and 60/40. I was at 70/30 before the last big dip in December but decided that was a bit too rich in equities for me to sleep well. I moved enough into fixed assets to have around 5 years worth of cash and bonds and now I feel much better :happy
Sometimes I feel like I'm waltzing in a 4/4 world.

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Re: What is your AA, given your age? and, Why?

Post by FrugalConservative » Fri Sep 27, 2019 3:28 pm

39yrs of age

85/15
Stock: 80 domestic 20 int
Bonds: Total bond fund
Vanguard Three fund for me
Hold 6 individual stocks, which percentage wise make up less then 3% of port.

Firm believer in three fund portfolio via Vanguard funds.

I put money into my Taxable every Friday. Equities can be up, down, flat, dont matter to me, the money goes in.Market timing is for chumps.

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Re: What is your AA, given your age? and, Why?

Post by FrugalConservative » Fri Sep 27, 2019 3:31 pm

csan wrote:
Thu May 09, 2019 3:23 pm
Age 24, 25% Bonds, 75% equities.

Equities are mostly VOO but some individual stocks are in there as well. Mostly trying to adhere to the Boglehead bonds vs. stocks guidance (i.e., not more than 75% of either but not less than 25% either). Probably will stay at 75% equities through grad school into my early 30s. I most likely will follow through with doing mostly VOO but will likely add sector ETFs and international exposure.

Prior to this (a month ago), I was 100% stocks (mostly individual companies) but realized I wanted to be smarter about storing the gains I've made since I opened my Roth IRA as an undergrad which led me to change my allocation to what it is now.
25% bonds are you age doesnt make much sense TBH. You should be 100% equity.

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Re: What is your AA, given your age? and, Why?

Post by FrugalConservative » Fri Sep 27, 2019 3:36 pm

Carlos Danger wrote:
Thu Sep 26, 2019 12:13 pm
Age: Late 30s
Asset Allocation: 50% Equities, 40% Bonds (heavy on extended duration treasuries), 10% Gold
Why: Growth and inflation are slowing and have been since last fall. Q3 2018 was the cycle peak and the time to shift. Bonds and Gold are crushing equities over that time period. Will move equities back to 60% when the cycle troughs. Hopefully Q4 or Q1 2020 with no recession. I do the Bogle-approved "market-timing" and move from 60 to 50% equities when I feel the time is right.
10% allocation in gold in a falling inflation environment? How exactly is that a good idea?

Market timing, holding gold, underinvested in equities, honestly, none of that would get the boglehead stamp of approval.

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Re: What is your AA, given your age? and, Why?

Post by goodenyou » Fri Sep 27, 2019 4:08 pm

Early 50s at 55/30/15 stocks /bonds/cash. I am very cash heavy now because I just sold commercial real estate properties. I want to build a new home for cash, but I want to sell my first paid off home first, if possible. I want the cash available for options over the next year. I continue to add to stocks/bonds monthly in retirement accounts and taxable. Both wife and I still working with kids in college.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

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Re: What is your AA, given your age? and, Why?

Post by mickeyd » Fri Sep 27, 2019 5:46 pm

45/45/10 @ 75. Simplicity.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

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Carlos Danger
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Re: What is your AA, given your age? and, Why?

Post by Carlos Danger » Sat Sep 28, 2019 8:57 am

FrugalConservative wrote:
Fri Sep 27, 2019 3:36 pm


10% allocation in gold in a falling inflation environment? How exactly is that a good idea?
10% Gold allocation in a falling real interest rate environment, (which has been brought about, in part, by falling inflation and growth). Great idea. Gold is not an inflation hedge. Not sure why that myth persists, simply doing one's homework reveals how wrongheaded such a notion is. Real rates declining is why gold has climbed.

Image
wrote:Market timing, holding gold, underinvested in equities, honestly, none of that would get the boglehead stamp of approval.
Who gives out this boglehead stamp of approval?
JuniorRob wrote:
Thu Jan 17, 2019 2:36 pm
Bogle "5% Gold"

I'm sure many have missed this in the one thread. Yes he's talking about an endowment, but I still think it clearly demonstrates that Bogle saw value in gold.

https://youtu.be/3uJbHREmUs4

57 minute mark . . .
viewtopic.php?t=270010#p4326497

Jack Bogle wrote:"For whatever sound reason, not emotional reason . . . take the 65 to 50"
https://www.youtube.com/watch?v=oJynLAvzccc

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RaleighStClaire
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Re: What is your AA, given your age? and, Why?

Post by RaleighStClaire » Mon Sep 30, 2019 9:15 am

BW1985 wrote:
Fri Sep 27, 2019 1:26 pm
RaleighStClaire wrote:
Thu Sep 26, 2019 2:36 pm
Looks like it's been 7 years since I last posted. Not sure what prompted me to load up the ol bogleheads today but here I am :)

36y/o
100% equities -- 60% US SV, 20% Intl SV, 20% EM SV. It's sure been a bad 12mo for the portfolio! :greedy
100% SCV? That's interesting. Ride or die with it I guess.
Yeah. I'm a psychopath :)
Where's that red one gonna go?

ColoradoRick
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Re: What is your AA, given your age? and, Why?

Post by ColoradoRick » Mon Sep 30, 2019 10:04 am

70/30; age 69 & retired 7 years. After year end if market doesn't do it I'm thinking of going to 60/40.

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