Asset Allocation

[minnesotapaintlady]

So, this recent stock run-up has me stressing about asset allocation again.  My bonds portion is less than 10% now and with only 5 years or so to go to retirement with no guaranteed income except for SS that I probably won't take until 10 years in I'm worried I might be shooting myself in the foot with being so aggressive. 

The bond funds are at an all time low and rates "maybe?" are done going up, so they should be poised to do better.  It feels like if I'm going to jump in and up in that now is the time.  I have ONE managed, high-fee fund that I've held onto for over 20 years now.  It's gone from 20K to 200K and part of me wants to just take 90K of that and it in a total bond index bringing me to 80/20, but at the same time I'm like....ugh...bonds. 

I tend to have this existential crisis over AA every couple years and then never bring myself to do anything but minor tweaks that don't really mean much....like the 20K I moved over to bonds in 2021.

Anyhow, I guess not really a question except wondering what other mid-50 folks are doing. 

 

.

[tallguy]

Well, I'm a little older and a few years retired already, but I never experience that crisis.  My bond allocation is exactly where it should be.  Zero.  Z.E.R.O.  I have even jokingly suggested that someone shoot me if I ever invest in bonds or a bond fund. 

I am NOT saying here that anyone should do as I do.  Situations are different for everybody, as is the psychology of investing.  You should always do what is right for you.  I will say this though.  If you truly wanted to be in bonds, or thought that it was necessary for you to do that, you would have done it already.  Stop imposing the "crisis" on yourself.    

[minnesotapaintlady]

Jul 20, 2023 10:55:30 GMT -5 tallguy said:

Well, I'm a little older and a few years retired already, but I never experience that crisis.  My bond allocation is exactly where it should be.  Zero.  Z.E.R.O.  I have even jokingly suggested that someone shoot me if I ever invest in bonds or a bond fund. 

I am NOT saying here that anyone should do as I do.  Situations are different for everybody, as is the psychology of investing.  You should always do what is right for you.  I will say this though.  If you truly wanted to be in bonds, or thought that it was necessary for you to do that, you would have done it already.  Stop imposing the "crisis" on yourself.    

So do you hold cash or have a pension or other way to cover a few years worth of expenses if the market does a large drop (say 40% or more)?  This is my main concern with pulling the plug on a regular income stream...weathering many years of down (or flat) market. 

[tallguy]

Jul 20, 2023 11:21:40 GMT -5 minnesotapaintlady said:

Jul 20, 2023 10:55:30 GMT -5 tallguy said:

Well, I'm a little older and a few years retired already, but I never experience that crisis.  My bond allocation is exactly where it should be.  Zero.  Z.E.R.O.  I have even jokingly suggested that someone shoot me if I ever invest in bonds or a bond fund. 

I am NOT saying here that anyone should do as I do.  Situations are different for everybody, as is the psychology of investing.  You should always do what is right for you.  I will say this though.  If you truly wanted to be in bonds, or thought that it was necessary for you to do that, you would have done it already.  Stop imposing the "crisis" on yourself.    

So do you hold cash or have a pension or other way to cover a few years worth of expenses if the market does a large drop (say 40% or more)?  This is my main concern with pulling the plug on a regular income stream...weathering many years of down (or flat) market. 

Not intentionally.  I do have some built up, but only because I haven't tried too hard to spend it yet.  I will soon, though.  Just have to decide which priority I should pursue first.  Mostly, it is because my basic and necessary expenses are so low that I don't ever need to pull anything out if I don't want to, so the risks of a down market don't apply to me.  SS alone gives me a significant cushion already over what I "need" to spend, and there are some additional monies each month as well.  Withdrawals from investments are on top of that.

All of that is to say, again, that there are two ways to have financial security.  One is to have a lot of money.  The other is to not need a lot of money.  Up to each person which of those two works best for them.  I chose to do both.      

[minnesotapaintlady]

Jul 20, 2023 11:54:28 GMT -5 tallguy said:

Jul 20, 2023 11:21:40 GMT -5 minnesotapaintlady said:

So do you hold cash or have a pension or other way to cover a few years worth of expenses if the market does a large drop (say 40% or more)?  This is my main concern with pulling the plug on a regular income stream...weathering many years of down (or flat) market. 

Not intentionally.  I do have some built up, but only because I haven't tried too hard to spend it yet.  I will soon, though.  Just have to decide which priority I should pursue first.  Mostly, it is because my basic and necessary expenses are so low that I don't ever need to pull anything out if I don't want to, so the risks of a down market don't apply to me.  SS alone gives me a significant cushion already over what I "need" to spend, and there are some additional monies each month as well.  Withdrawals from investments are on top of that.

All of that is to say, again, that there are two ways to have financial security.  One is to have a lot of money.  The other is to not need a lot of money.  Up to each person which of those two works best for them.  I chose to do both.      

There's where we diverge.  I'll have a good decade before social security and no other income stream so tapping the investments will be the only way.  I'll also possibly have a kid in college those first few years and would like to do quite a bit of traveling in my 60's as well.  I'm getting hit hard enough with aging issues slowing me down already.

[haapai]

I'm not sure if this post will add anything to this thread but I'll pop in anyways.  You can always ignore me.  First of all, I love, love, love reading your exchanges and seeing the trust that you have for each other.  Secondly, I am in my fifties and also have zero percent in bonds.  In my case, I just have not built up enough security to not be aggressive in my asset allocation.  Thirdly, I come from a family that just doesn't mess with bonds.  I'm not sure whether this is because of my dad's finance-foo or because there is a history of inheritances in my family. 

[tallguy]

Jul 20, 2023 12:34:35 GMT -5 minnesotapaintlady said:

Jul 20, 2023 11:54:28 GMT -5 tallguy said:

Not intentionally.  I do have some built up, but only because I haven't tried too hard to spend it yet.  I will soon, though.  Just have to decide which priority I should pursue first.  Mostly, it is because my basic and necessary expenses are so low that I don't ever need to pull anything out if I don't want to, so the risks of a down market don't apply to me.  SS alone gives me a significant cushion already over what I "need" to spend, and there are some additional monies each month as well.  Withdrawals from investments are on top of that.

All of that is to say, again, that there are two ways to have financial security.  One is to have a lot of money.  The other is to not need a lot of money.  Up to each person which of those two works best for them.  I chose to do both.      

There's where we diverge.  I'll have a good decade before social security and no other income stream so tapping the investments will be the only way.  I'll also possibly have a kid in college those first few years and would like to do quite a bit of traveling in my 60's as well.  I'm getting hit hard enough with aging issues slowing me down already.

Fair enough, but bonds were never appropriate for me even up to this point.  There are a lot of people who don't want or need bonds, so don't worry if you are one of them.  Decide once: "Will it make me sleep better at night if I hold bonds in my portfolio?"  If the answer is yes, buy some.  If not, stop worrying about it every couple years.  

[giramomma]

It's tricky. How old will you be when you retire.? Have you sat down and figured out expenses until you 1) qualify for medicare and 2) qualify for SS.  I know you can travel on the cheap. But, cheap in 2030 or later isn't the same as cheap in say, cheap in 2000.

I know folks in your lineage also live for a long time.

How safe do you need to go? Aren't you putting money in iBonds? How much under 10% in safe money are you? Like, if you are at 75K in safe investments, I guess I really wouldn't sweat it. That should get you a couple of years. If your safe investments totaled like 35K, then I'd concentrate to build it up now at some point before you retire.

You can also look at not reinvesting dividends and using that as an income stream to cushion any blow. We're at about 10/11K a year in dividend income.  Because we sit in the 12% bracket, the money is not taxed. It hasn't been taxed since the Bush tax cuts. I seriously doubt they are going to start taxing dividend money for everyone now.

[ArchietheDragon]

Jul 20, 2023 10:43:09 GMT -5 minnesotapaintlady said:

So, this recent stock run-up has me stressing about asset allocation again.  My bonds portion is less than 10% now and with only 5 years or so to go to retirement with no guaranteed income except for SS that I probably won't take until 10 years in I'm worried I might be shooting myself in the foot with being so aggressive. 

The bond funds are at an all time low and rates "maybe?" are done going up, so they should be poised to do better.  It feels like if I'm going to jump in and up in that now is the time.  I have ONE managed, high-fee fund that I've held onto for over 20 years now.  It's gone from 20K to 200K and part of me wants to just take 90K of that and it in a total bond index bringing me to 80/20, but at the same time I'm like....ugh...bonds. 

I tend to have this existential crisis over AA every couple years and then never bring myself to do anything but minor tweaks that don't really mean much....like the 20K I moved over to bonds in 2021.

Anyhow, I guess not really a question except wondering what other mid-50 folks are doing. 

 

.

Instead of moving more to bonds... why not move to some CDs in your IRA instead.  You should be able to able to get close to 5% without worry about the value decreasing.    maybe do an 80/10/10 Allocation. 

[minnesotapaintlady]

Jul 20, 2023 12:58:31 GMT -5 giramomma said:

It's tricky. How old will you be when you retire.? Have you sat down and figured out expenses until you 1) qualify for medicare and 2) qualify for SS.  I know you can travel on the cheap. But, cheap in 2030 or later isn't the same as cheap in say, cheap in 2000.

I know folks in your lineage also live for a long time.

How safe do you need to go? Aren't you putting money in iBonds? How much under 10% in safe money are you? Like, if you are at 75K in safe investments, I guess I really wouldn't sweat it. That should get you a couple of years. If your safe investments totaled like 35K, then I'd concentrate to build it up now at some point before you retire.

You can also look at not reinvesting dividends and using that as an income stream to cushion any blow. We're at about 10/11K a year in dividend income.  Because we sit in the 12% bracket, the money is not taxed. It hasn't been taxed since the Bush tax cuts. I seriously doubt they are going to start taxing dividend money for everyone now.

59 or 60 I'm thinking, but won't draw SS until probably 69.  I only need about 36K/year.  48K would be fluffy.  It seems like a big cut from what I make now, but last year I grossed about 80K between work and child support and tax credits, but saved 47K of that, so really was getting by on 33K...I'd rather have 48K though.

I don't have a taxable account (well, nothing of note...only about 10K) so getting income from dividends isn't on the table.  Filling all the tax-preferred wipes me out. I have like 40K in I bonds, of which 10K is Carrot's to cover a couple years of tuition and the rest is my EF.  Other than that...82K in a Total Bond Index fund.  The rest is almost all S&P 500 index (except for that 200K in FLPSX). 

[minnesotapaintlady]

Jul 20, 2023 13:53:46 GMT -5 ArchietheDragon said:

Jul 20, 2023 10:43:09 GMT -5 minnesotapaintlady said:

So, this recent stock run-up has me stressing about asset allocation again.  My bonds portion is less than 10% now and with only 5 years or so to go to retirement with no guaranteed income except for SS that I probably won't take until 10 years in I'm worried I might be shooting myself in the foot with being so aggressive. 

The bond funds are at an all time low and rates "maybe?" are done going up, so they should be poised to do better.  It feels like if I'm going to jump in and up in that now is the time.  I have ONE managed, high-fee fund that I've held onto for over 20 years now.  It's gone from 20K to 200K and part of me wants to just take 90K of that and it in a total bond index bringing me to 80/20, but at the same time I'm like....ugh...bonds. 

I tend to have this existential crisis over AA every couple years and then never bring myself to do anything but minor tweaks that don't really mean much....like the 20K I moved over to bonds in 2021.

Anyhow, I guess not really a question except wondering what other mid-50 folks are doing. 

 

.

Instead of moving more to bonds... why not move to some CDs in your IRA instead.  You should be able to able to get close to 5% without worry about the value decreasing.    maybe do an 80/10/10 Allocation. 

I was thinking about that too.  Well, actually I was looking at treasuries offered through Fidelity, but they confuse me somewhat, so I don't think that's a good idea and they seem rather short term.  I hadn't actually looked at CD offers through the brokerage.  So you just buy one for a certain term like a bank CD where you're penalized for cashing in early, or is it like a bond fund where you own a whole bunch of them and you can sell whenever? 

[ArchietheDragon]

Jul 20, 2023 14:39:59 GMT -5 minnesotapaintlady said:

Jul 20, 2023 13:53:46 GMT -5 ArchietheDragon said:

Instead of moving more to bonds... why not move to some CDs in your IRA instead.  You should be able to able to get close to 5% without worry about the value decreasing.    maybe do an 80/10/10 Allocation. 

I was thinking about that too.  Well, actually I was looking at treasuries offered through Fidelity, but they confuse me somewhat, so I don't think that's a good idea and they seem rather short term.  I hadn't actually looked at CD offers through the brokerage.  So you just buy one for a certain term like a bank CD where you're penalized for cashing in early, or is it like a bond fund where you own a whole bunch of them and you can sell whenever? 

Fidelity sells brokered CDs, which is very similar to a bank CD where you buy it for a certain term.   Instead of being penalized for cashing in early, though, if you need to liquidated it you sell it on the secondary market, which could be for a loss.   I just looked now and I see 2 year CDs at 5% but 5 year CDs are actually lower, at 4.5%.  

[minnesotapaintlady]

Jul 20, 2023 14:47:44 GMT -5 ArchietheDragon said:

Jul 20, 2023 14:39:59 GMT -5 minnesotapaintlady said:

I was thinking about that too.  Well, actually I was looking at treasuries offered through Fidelity, but they confuse me somewhat, so I don't think that's a good idea and they seem rather short term.  I hadn't actually looked at CD offers through the brokerage.  So you just buy one for a certain term like a bank CD where you're penalized for cashing in early, or is it like a bond fund where you own a whole bunch of them and you can sell whenever? 

Fidelity sells brokered CDs, which is very similar to a bank CD where you buy it for a certain term.   Instead of being penalized for cashing in early, though, if you need to liquidated it you sell it on the secondary market, which could be for a loss.   I just looked now and I see 2 year CDs at 5% but 5 year CDs are actually lower, at 4.5%.  

Yeah, I just was looking at what they offer and saw that they'd set up a whole ladder 1, 2 or 5 year ladder for you if you want. 

[Regis]

Our financial advisor encouraged us to keep $5k in a brick and mortar bank account that we can get out in a matter of minutes from the ATM for minor emergencies.  And another $15k in a high-interest online account (we use Capital One 360) for slightly bigger emergencies, but can still have access to it within a couple of days.

For the remainder, we try to keep our stock allocation at 100 - half our age.  I'm about to turn 60, so we're roughly 70% in stocks.  Our financial advisor said we could retire now and have enough money to maintain our lifestyle to the age of 113, so we don't NEED to be more aggressive.  Your mileage may vary.

[CCL]

Back about 20 years ago, my 1st fund I actually started investing in was Fidelity Balanced Fund (FBALX). It holds some bonds, along with stocks. I forget the percentages. As time went by, I added more aggressive stock funds. I keep about 30% of the 401k in the balanced fund. It's done well for me and fluctuates less than my other funds. Anyway, that's what works for me.

I've always felt the key is keeping your fixed expenses low. You've got that down already.

What is your plan for health insurance?

[CCL]

Jul 20, 2023 14:39:59 GMT -5 minnesotapaintlady said:

Jul 20, 2023 13:53:46 GMT -5 ArchietheDragon said:

Instead of moving more to bonds... why not move to some CDs in your IRA instead.  You should be able to able to get close to 5% without worry about the value decreasing.    maybe do an 80/10/10 Allocation. 

I was thinking about that too.  Well, actually I was looking at treasuries offered through Fidelity, but they confuse me somewhat, so I don't think that's a good idea and they seem rather short term.  I hadn't actually looked at CD offers through the brokerage.  So you just buy one for a certain term like a bank CD where you're penalized for cashing in early, or is it like a bond fund where you own a whole bunch of them and you can sell whenever? 

You just buy them. It's easier than buying thru the bank. A couple clicks and you are done. Plus you can go shorter term if you want. I could never get 1 or 2 month CDs at the bank. I've been putting some of my vacation fund $$$ in them.

[minnesotapaintlady]

Jul 21, 2023 11:39:42 GMT -5 CCL said:

Back about 20 years ago, my 1st fund I actually started investing in was Fidelity Balanced Fund (FBALX). It holds some bonds, along with stocks. I forget the percentages. As time went by, I added more aggressive stock funds. I keep about 30% of the 401k in the balanced fund. It's done well for me and fluctuates less than my other funds. Anyway, that's what works for me.

I've always felt the key is keeping your fixed expenses low. You've got that down already.

What is your plan for health insurance?

Looks like FBALX is about 40% bonds. 

I would go on an ACA plan.  Well...Minnesota's version.  With 40K AGI the most I'd pay (according to current rates) is $605/month for the most expensive Gold PPO plan covering myself and Carrot.  There are lots of plans way cheaper than that though (all the way down to $0/month) and I may not have to worry about Carrot at all, but the plan cost doesn't drop a lot going from family to just me, so unless he goes on his dad's insurance or gets a full time job with insurance right out of high school, it probably makes more sense for me to cover him than pay 2 or 3K/year for college insurance.     

[minnesotapaintlady]

Municipal bonds.  They're tax-free, but does that work if bought in an IRA?  I'm guessing no.

Last night I saw there were 5 and 10 year CDs at 5.5% but they're gone this morning.  I want call protected right? 

[tallguy]

No, there is absolutely no benefit to holding tax-free bonds in an IRA.

[laterbloomer]

Jul 20, 2023 14:35:20 GMT -5 minnesotapaintlady said:

Jul 20, 2023 12:58:31 GMT -5 giramomma said:

It's tricky. How old will you be when you retire.? Have you sat down and figured out expenses until you 1) qualify for medicare and 2) qualify for SS.  I know you can travel on the cheap. But, cheap in 2030 or later isn't the same as cheap in say, cheap in 2000.

I know folks in your lineage also live for a long time.

How safe do you need to go? Aren't you putting money in iBonds? How much under 10% in safe money are you? Like, if you are at 75K in safe investments, I guess I really wouldn't sweat it. That should get you a couple of years. If your safe investments totaled like 35K, then I'd concentrate to build it up now at some point before you retire.

You can also look at not reinvesting dividends and using that as an income stream to cushion any blow. We're at about 10/11K a year in dividend income.  Because we sit in the 12% bracket, the money is not taxed. It hasn't been taxed since the Bush tax cuts. I seriously doubt they are going to start taxing dividend money for everyone now.

59 or 60 I'm thinking, but won't draw SS until probably 69.  I only need about 36K/year.  48K would be fluffy.  It seems like a big cut from what I make now, but last year I grossed about 80K between work and child support and tax credits, but saved 47K of that, so really was getting by on 33K...I'd rather have 48K though.

I don't have a taxable account (well, nothing of note...only about 10K) so getting income from dividends isn't on the table.  Filling all the tax-preferred wipes me out. I have like 40K in I bonds, of which 10K is Carrot's to cover a couple years of tuition and the rest is my EF.  Other than that...82K in a Total Bond Index fund.  The rest is almost all S&P 500 index (except for that 200K in FLPSX). 

 THAT is impressive! I was proud to save $30,000 with a similar gross. 

[CCL]

Jul 21, 2023 12:43:50 GMT -5 minnesotapaintlady said:

Municipal bonds.  They're tax-free, but does that work if bought in an IRA?  I'm guessing no.

Last night I saw there were 5 and 10 year CDs at 5.5% but they're gone this morning.  I want call protected right? 

For longer terms, I would. I'm only buying short-term right now so I don't worry about it.

[Rukh O'Rorke]

Jul 21, 2023 12:43:50 GMT -5 minnesotapaintlady said:

Municipal bonds.  They're tax-free, but does that work if bought in an IRA?  I'm guessing no.

Last night I saw there were 5 and 10 year CDs at 5.5% but they're gone this morning.  I want call protected right? 

Those are nice rates!

Where u looking at these CDs?

[minnesotapaintlady]

Jul 22, 2023 16:32:05 GMT -5 Rukh O'Rorke said:

Jul 21, 2023 12:43:50 GMT -5 minnesotapaintlady said:

Municipal bonds.  They're tax-free, but does that work if bought in an IRA?  I'm guessing no.

Last night I saw there were 5 and 10 year CDs at 5.5% but they're gone this morning.  I want call protected right? 

Those are nice rates!

Where u looking at these CDs?

Fidelity.

[Rukh O'Rorke]

Jul 20, 2023 10:43:09 GMT -5 minnesotapaintlady said:

So, this recent stock run-up has me stressing about asset allocation again.  My bonds portion is less than 10% now and with only 5 years or so to go to retirement with no guaranteed income except for SS that I probably won't take until 10 years in I'm worried I might be shooting myself in the foot with being so aggressive. 

The bond funds are at an all time low and rates "maybe?" are done going up, so they should be poised to do better.  It feels like if I'm going to jump in and up in that now is the time.  I have ONE managed, high-fee fund that I've held onto for over 20 years now.  It's gone from 20K to 200K and part of me wants to just take 90K of that and it in a total bond index bringing me to 80/20, but at the same time I'm like....ugh...bonds. 

I tend to have this existential crisis over AA every couple years and then never bring myself to do anything but minor tweaks that don't really mean much....like the 20K I moved over to bonds in 2021.

Anyhow, I guess not really a question except wondering what other mid-50 folks are doing. 

 

.

I've been having an existential crisis along these lines too.....

1 - is cash position - I am still taking a pass on bonds....
2 - individual stocks and how to deal with that risk when I quit....

1) I've been trying to build up more cash-like reserves. Ibonds, treasuries.....but it is slow going! About 42k in ibonds and treasuries, and one IRA has 17k in the vanguard money market fund (paying 70/month so not too shabby! so I am leaving it....), and I think 6k in tresuries I bought - but think the MM might be paying more? so left that in cash.

2) I have mostly ind stocks. I've done well, but it is a roller coaster! My largest positions are Tesla and Netflix and those both have taken 70% dives in the past few years. both are way up over their lows, not yet back to ATHs of course. But its been sobering for sure.

One issue with building up #1. is that my current 401k plan doesn't have anything that doesn't risk principal, so I keep in funds about 40% large, 40% mid/small, and 20% international. I think when I quit I will go to cash. It is currently just a shade under 200k, and then I will just keep the other stuff I have in cash now too. If the market tanks I'm not retiring anyway, so seems like I would only retire into a bullish type atmosphere, or at least semi bullish......I wish there was a MM like vanguard, and I could keep the money in that, or sign over to that when I make up my mind....

2) I'll likely just stay with what I'm doing. Maybe I need more cash because I'm risky? idk. I'll need to make a decisions at some point.


But more to your OP - I've kind of decided to make that move to higher cash at the end rather than as I go along the last few years. If I save up 3 years of cash - would I really retire into a bear market witht he market down significantly? Maybe if I was soc sec age and could life mostly on soci security at that point......

I guess I could do it in one of my rollover IRAs? Something to ponder....

[minnesotapaintlady]

As typical for me, I have not reached any kind of decision on this.   I did realize this would be so much easier if my 401K had a decent fixed income option, but sadly they do not.  I am psychologically good with sending new money off to fixed income, especially since I'm putting such a high percentage in these days, but  I am only putting new money in my 401K, my Roth IRA and my HSA.  Putting fixed in a Roth or HSA seems crazy pants, so they're out leaving either the 401K high expenses bond fund or selling some/all of the fund in my Rollover.  I have an emotional attachment to that fund that I probably should get over. 

[Rukh O'Rorke]

MPL: wondered if you'd find this of interest?

www.bogleheads.org/forum/viewtopic.php?p=7097574#p7097574

using tips ladder to bridge pre soc sec years.

[minnesotapaintlady]

Jul 26, 2023 23:55:03 GMT -5 Rukh O'Rorke said:

MPL: wondered if you'd find this of interest?

www.bogleheads.org/forum/viewtopic.php?p=7097574#p7097574

using tips ladder to bridge pre soc sec years.

I don't think I would have bothered with the added complexity given how conservative his portfolio is already.  But, I'd want to do SOMETHING with that 300K sitting in a MM account, so throwing 200K into a TIPS ladder is certainly an option.  I do find it interesting that my numbers are almost all half of his (spending, expected SS, and savings)

Spending in retirement: $110,000 a year
Social Security: $50,000 a year (maybe dropping to $40,000 in 2034)
Need to pull: $60,000 (maybe $70,000 a year past 2034)

Savings: $2 million (50/50 stocks/bonds)

$800,000 in Total Stock Market
$200,000 in Total International Stock Market
$250,000 in Total Bond Market
$250,000 in Stable-value fund (in 401k)
$200,000 in I-bonds
$300,000 in money market funds


Ages: 54 and 62
Withdrawal rates: 3% until 2034, maybe 3.5% after 2034.

[Rukh O'Rorke]

Jul 27, 2023 7:50:32 GMT -5 minnesotapaintlady said:

Jul 26, 2023 23:55:03 GMT -5 Rukh O'Rorke said:

MPL: wondered if you'd find this of interest?

www.bogleheads.org/forum/viewtopic.php?p=7097574#p7097574

using tips ladder to bridge pre soc sec years.

I don't think I would have bothered with the added complexity given how conservative his portfolio is already.  But, I'd want to do SOMETHING with that 300K sitting in a MM account, so throwing 200K into a TIPS ladder is certainly an option.  I do find it interesting that my numbers are almost all half of his (spending, expected SS, and savings)

Spending in retirement: $110,000 a year
Social Security: $50,000 a year (maybe dropping to $40,000 in 2034)
Need to pull: $60,000 (maybe $70,000 a year past 2034)

Savings: $2 million (50/50 stocks/bonds)

$800,000 in Total Stock Market
$200,000 in Total International Stock Market
$250,000 in Total Bond Market
$250,000 in Stable-value fund (in 401k)
$200,000 in I-bonds
$300,000 in money market funds


Ages: 54 and 62
Withdrawal rates: 3% until 2034, maybe 3.5% after 2034.

well - he talking about 2 people! I think he said wife and he both had about 25k for soc sec at 62.

bogleheads are sooooo conservative with the stock/bond AA - which might sway me if bonds acted like they used to.Maybe they will again with the interest rates non 0? I just don't know that I'm willing to put money into something that has been returning less than fixed with the potential loss of principal.

bogleheads just don't seem to care!

[minnesotapaintlady]

Jul 27, 2023 10:53:20 GMT -5 Rukh O'Rorke said:

Jul 27, 2023 7:50:32 GMT -5 minnesotapaintlady said:

 I do find it interesting that my numbers are almost all half of his (spending, expected SS, and savings)

well - he talking about 2 people! I think he said wife and he both had about 25k for soc sec at 62.

Right.  I get that, but if I follow through down the AA, then I would have:  (actual balance in red)

$125,000 in Total Bond Market  80K
$125,000 in Stable-value fund (in 401k)  0
$100,000 in I-bonds  39K (but really only half considered for retirement anyhow)
$150,000 in money market funds  6K in my HSA and I think a couple thousand in my Roth.

[minnesotapaintlady]

Jul 27, 2023 10:53:20 GMT -5 Rukh O'Rorke said:

bogleheads are sooooo conservative with the stock/bond AA - which might sway me if bonds acted like they used to.Maybe they will again with the interest rates non 0? I just don't know that I'm willing to put money into something that has been returning less than fixed with the potential loss of principal.

I think it's because that's not always been the case.  A lot of Boglehead's consider this past decade to be an anomaly and not a reason to change the long-term investment plans.  The site I had only had data going back to 2008, but it wasn't too shabby not that long ago.

2014    5.68%
2013   -1.86%
2012    5.87%
2011    6.21%
2010    7.43%
2009    8.28%
2008    4.24%