- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Bonds/Retirement question
Posted on 7/15/24 at 12:42 pm
Posted on 7/15/24 at 12:42 pm
Seems like most of you have good retirements set up. There seems to be an old recommendation of having bonds allocated as a percent of your age. I have probably been playing with fire, and not done this up to this point (age 51). I would just like some real world advice on how you have handled this at your age. Do I need to just go sink a bunch of money into 10 year treasuries? Bond ETFs? Other instruments? I understand the theory as to why to do it, but I just feel like I would be leaving so much money on the table potentially.
(btw...my wife has an advisor that handles all this for her, I am the dumb one trying to go it on my own)
(btw...my wife has an advisor that handles all this for her, I am the dumb one trying to go it on my own)
5
Posted on 7/15/24 at 1:10 pm to wareagle7298
I’m 63 and have a 60/40 stocks to bonds mix. I like being moderate aggressive rather than being moderate conservative.
Posted on 7/15/24 at 2:10 pm to Popths
Stocks grow, bonds don't, cash doesn't. Stocks beat inflation over the long haul, bonds don't, cash doesn't. Bonds and cash actually lose purchasing power to inflation over time. Infaltion Protected Treasuries lost 20% under the conditions in 2022 they were supposed to provide protection for.
That's the basic assumptions underlying how I allocate my portfolio. If I need it to grow, I know where I don't want it to be. I pick a time period and keep enough cash to pay the bills during that time. After that, I am more inclined to keep it in stocks and skip the bonds. There are some stocks that are less volatile than others, and if the seas get too rough for you, you can always stay home and keep a little more cash for a while.
That's the basic assumptions underlying how I allocate my portfolio. If I need it to grow, I know where I don't want it to be. I pick a time period and keep enough cash to pay the bills during that time. After that, I am more inclined to keep it in stocks and skip the bonds. There are some stocks that are less volatile than others, and if the seas get too rough for you, you can always stay home and keep a little more cash for a while.
This post was edited on 7/15/24 at 10:31 pm
Posted on 7/15/24 at 4:25 pm to wareagle7298
The old reasoning was that bonds don’t correlate with stocks and if stocks were down your bonds would not change much protecting you. This has not born out in modern markets. I wouldn’t have more than 20% in bonds and only when they are yielding close to 5%.
Posted on 7/15/24 at 4:47 pm to Drizzt
I'm 64. Do you have a nest egg you want to protect and are happy with the amount or do you need to grow and catch up? Can you emotionally stand a drop in stocks like March 2020? What if the recovery is prolonged? These are all questions I ask myself to decide. I've found in investing the way you invest has to fit with with your personality and risk tolerance. Personally I'm way tilted towards bonds. I throw in BDC stocks to increase he yield percentage on my portfolio. When I say I'm tilted towards bonds I mean individual issues and right now my longest maturity is 5 years. I buy Treasuries, Agencies, Brokered CD's, and investment grade Corporates. I also ladder maturities. Bond funds with extended maturities are as volatile as stocks. I steer clear. In times of panic even if you stay the course many of your fellow investors in the fund will sell forcing the managers to sell at the worst time to raise cash for redemptions. These are my thoughts about the percentage of bonds versus stocks. I wish all well and good investing.
Posted on 7/15/24 at 5:00 pm to wareagle7298
I think that age, views on risk, years to retirement, current market conditions all play a part, so you may not get the answer that you want.
I am 64, so you have a lot of years to recover before retirement, and I don't. I am pretty certain that I have more than enough on which to retire, and I am probably 30/70 fixed, bonds, cash, etc. vs. equities. I don't expect anyone on this board to have such a conservative approach. I look at capital market outlooks from Vanguard and the like, I don't think I'll miss out on much over the next decade. I believe the market in the first 5 years of retirement is critical. Going forward, every penny I save will go into equities, and everything I spend will come from the bonds, fixed, cash, etc. When I'm 80, I may be closer to 50/50
I am 64, so you have a lot of years to recover before retirement, and I don't. I am pretty certain that I have more than enough on which to retire, and I am probably 30/70 fixed, bonds, cash, etc. vs. equities. I don't expect anyone on this board to have such a conservative approach. I look at capital market outlooks from Vanguard and the like, I don't think I'll miss out on much over the next decade. I believe the market in the first 5 years of retirement is critical. Going forward, every penny I save will go into equities, and everything I spend will come from the bonds, fixed, cash, etc. When I'm 80, I may be closer to 50/50
Posted on 7/15/24 at 5:14 pm to bovine1
Thanks Bovine1, great reply. I am "catching up" and I guess I'm going to try to keep riding the wave as much as I can, but start putting more in bonds, etc. The irrational fear of a market crash always kept me from investing properly when I was younger. I'm 51 and we will have the house paid off in 26 months and will hopefully be completely out of debt at that time, so I feel good.
Posted on 7/15/24 at 5:17 pm to wareagle7298
Do you plan to retire and withdraw from your account in 2 years or 20 years?
What is your risk tolerance?
How far are you from your account goal at retirement?
What is your risk tolerance?
How far are you from your account goal at retirement?
Posted on 7/15/24 at 6:11 pm to Suntiger
Well, like I said I wish I had been much more prudent when I was younger. I have friends that are obviously light years beyond me and could probably retire in their mid-50s. I work in I.T. and I like it, I will probably work in some capacity until I can't - not out of financial need, I just like the work and will keep me going. My wife on the other hand is a retail pharmacist - I can't see her going past 59 1/2, if that far.
Do you plan to retire and withdraw from your account in 2 years or 20 years? I will say 15 years
What is your risk tolerance? probably too high for my own good
How far are you from your account goal at retirement? So I worked until recently at an Ad Agency, and they had a financial firm come speak to us. They said we needed 3 million to retire comfortably. If we max out 401K and IRA every year and we get 8% we could hit it in 12 years. Inheritance could speed that up, but I'm not banking on that, in that you never know if mom has to go live in a nursing home for 10 years and burns through her nest egg.
Do you plan to retire and withdraw from your account in 2 years or 20 years? I will say 15 years
What is your risk tolerance? probably too high for my own good
How far are you from your account goal at retirement? So I worked until recently at an Ad Agency, and they had a financial firm come speak to us. They said we needed 3 million to retire comfortably. If we max out 401K and IRA every year and we get 8% we could hit it in 12 years. Inheritance could speed that up, but I'm not banking on that, in that you never know if mom has to go live in a nursing home for 10 years and burns through her nest egg.
Posted on 7/15/24 at 6:37 pm to wareagle7298
I am 88 , my wife is 78 and we have a Vanguard Fund which is a 65 % blue chip and 35 % short term treasuries . It is relatively low risk and we usually make about 8/10 % after our MRDs each year. That some say is too aggressive for our age but we like it .
This post was edited on 7/15/24 at 6:39 pm
Posted on 7/15/24 at 6:44 pm to wareagle7298
A lot of what you will need in retirement is dependent on how you prepare, for example, my Wife and I made sure that we were mortgage free, cars were paid for, etc and you will find as you age , you really don't want as much.Ay least that's the way we feel, we retired 17 years ago with a small 7 figure IRA each and are doing very well. It is kinda to each his own as we are all in different situations.
Posted on 7/15/24 at 7:16 pm to Old1937
quote:
A lot of what you will need in retirement is dependent on how you prepare, for example, my Wife and I made sure that we were mortgage free, cars were paid for, etc and you will find as you age , you really don't want as much.Ay least that's the way we feel, we retired 17 years ago with a small 7 figure IRA each and are doing very well. It is kinda to each his own as we are all in different situations
It is funny you say that. That day, when the financial group said someone around my age would need 3 million to retire, Afterwards, I was talking to our CFO (who was my boss), and I was like "There is no way I will hit that mark". He broke it down very well for me - first off, he said the type of people that use that financial firm need 3 million - I most likely would not. He further went on to say:
There are two types of retirees - those that like to travel all the time, or have a winter house a summer house. And then there are those that like to go eat at Hardees in the morning and come home and work on crosswords and watch TV. He said that I struck him as the latter, and he would be correct.
Posted on 7/15/24 at 7:20 pm to wareagle7298
I just had my wife log into her investment portal. They currently have her at 16% fixed income investments (same age as me).
Posted on 7/15/24 at 7:50 pm to Old1937
88 and on an Internet forum. Impressive. My dad is only 78 and can barely answer his iPhone.
Posted on 7/15/24 at 7:52 pm to bovine1
quote:
In times of panic even if you stay the course many of your fellow investors in the fund will sell forcing the managers to sell at the worst time to raise cash for redemptions.
Only true of bond mutual funds, not ETF's. ETF's have a different structure that is supposed to prevent this.
Posted on 7/15/24 at 7:55 pm to Big Scrub TX
quote:
When the January U.S. CPI print came in higher than investors expected, both stocks and bonds sold off on the news. It was yet another instance of positive—that is to say, unfavorable—correlation, in which stock prices and bond prices move in the same direction. This environment has prevailed since the COVID shock of 2020.
LINK
Rest of the article says they think this will change soon but my point was that bonds have recently not been the hedge people thought they were. That may be due to a unique ultra low rate environment the last decade but I’m pretty sure that will return as well given political pressure.
This post was edited on 7/15/24 at 7:56 pm
Posted on 7/15/24 at 8:18 pm to wareagle7298
quote:
It is funny you say that. That day, when the financial group said someone around my age would need 3 million to retire,
I have posted my story before, so apologies to anyone who doesn't want to hear it again.
I retired at age 55, about a month before turning 56. I lost my job, and decided I really didn't want another one. At the time, I thought I would need twice as much as I had to retire, but after really crunching the numbers, decided that since I had never actually brought home more than about 55% of my salary, I could live on about 55% of my expectations. I will turn 59.5 at the end of January 2025 so I am in the final stretch of the tough part right now, things will get considerably easier when I can get full access to all my assets.
I am very comfortable like this. I will have the flexibility to maybe increase my spending by 50% or so next year, but I am probably going to stick with my basic plan so that my assets can continue to grow. If I take SS at 62, things will get even easier.
But, I used to travel for a living. I don't travel for anything now. If I decided to start, it would only be to get together with friends and all we would do is grill out and drink beer. You don't need $3 million for that, and truly, that is about all I really ever enjoyed doing anyway.
Anyway, I haven't compromised on anything other than maybe putting off getting a newer car. I'm not in a hurry on that. At least for me, I spend a lot less money in retirement for the same lifestyle.
Posted on 7/15/24 at 10:32 pm to Big Scrub TX
In 2022 both stocks and bonds went down in the same year. It was the first time that happened in about a half century.
Posted on 7/16/24 at 7:10 am to Old1937
quote:
we have a Vanguard Fund which is a 65 % blue chip and 35 % short term treasuries
I don’t believe such a fund exists with Vanguard.
It’s probably 35% bonds in general, but highly unlikely they’re all short term treasuries.
Point still stands though.
Page 1 of 2
Back to top
Follow TigerDroppings for LSU Football News