- 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
Recommended asset allocation for those entering retirement
Posted on 8/27/26 at 8:43 am
Posted on 8/27/26 at 8:43 am
I guess the typical options are 90/10, 80/20, or 70/30.
It may depend on your total amount invested, but I think the 90/10 is too risky.
For those in this situation, which AA is your preference?
It may depend on your total amount invested, but I think the 90/10 is too risky.
For those in this situation, which AA is your preference?
14
Posted on 8/27/26 at 8:55 am to Grinder
Depends on circumstances but 70/30 is too heavy in equities for some people.
Posted on 8/27/26 at 8:57 am to Grinder
depends on your age and your want/need for growth. I’m 59 and still 90+ in equities
Posted on 8/27/26 at 9:06 am to Grinder
The problem with "risky" or volatile stocks is that you don't want the value to be low when you have to withdraw the money.
The problem with "safe" investments is that they don't have very good returns.
There are strategies that allow you to grow your portfolio and still reduce the risk. For example, you could have a 3 bucket approach where you have 5 years of expenses in fixed return investments in 1 bucket, and split what is left over in the other two buckets - one in index and the other in growth stocks. Whenever the market is up, you can move funds from bucket 2 into bucket 1, and whenever your growth stocks are up, you can move some money from 3 into 2, if you choose.
The problem with "safe" investments is that they don't have very good returns.
There are strategies that allow you to grow your portfolio and still reduce the risk. For example, you could have a 3 bucket approach where you have 5 years of expenses in fixed return investments in 1 bucket, and split what is left over in the other two buckets - one in index and the other in growth stocks. Whenever the market is up, you can move funds from bucket 2 into bucket 1, and whenever your growth stocks are up, you can move some money from 3 into 2, if you choose.
Posted on 8/27/26 at 9:12 am to Jax-Tiger
The bucket approach has always seemed reasonable.
My thought was 80/20 was a good starting number, but let’s say that the “20” represents 10 years of expenses or more. And with no SS being added in yet, does this affect the choices for AA?
In general 80/20 sounds risky, but is risky vs conservative defined by years of spending cash on hand?
My thought was 80/20 was a good starting number, but let’s say that the “20” represents 10 years of expenses or more. And with no SS being added in yet, does this affect the choices for AA?
In general 80/20 sounds risky, but is risky vs conservative defined by years of spending cash on hand?
Posted on 8/27/26 at 9:31 am to Grinder
have you heard of the 3-bucket method?
Posted on 8/27/26 at 9:34 am to Grinder
I used bucket approach, but poor timing hurt me. I semi-retired right before a terrible down cycle for bonds. I decided that I had enough money to return to 90% stocks. Caveat is that I have been diversifying into real estate for a number of years., so the 90% is my 401and play account money.
My current sentiment is to only keep about 18 months of expenses in bonds and liquid assets.
My current sentiment is to only keep about 18 months of expenses in bonds and liquid assets.
Posted on 8/27/26 at 10:07 am to KWL85
that's what i'm planning on doing. Stay mostly in equities but bring up 1-3 years of living expenses outside of stocks.
Some people can't handle volatility. That's why i plan to have no mortgage in retirement so it makes it very easy to cover the basics and I can scale back the fun spend if needed.
Some people can't handle volatility. That's why i plan to have no mortgage in retirement so it makes it very easy to cover the basics and I can scale back the fun spend if needed.
Posted on 8/27/26 at 10:22 am to Grinder
I am not retired. So i may have a completely different perspective when I am in the zone.
My plan is for 2 years living expenses on the sidelines. Maybe a cd ladder. I am sure there are plenty of options available.
The rest will be out of stocks split between a dow jones index and s&p index.
Most dips do not last more than a few months.
Most crashes do not last over 2 years.
I am not smart enough to time the market and move assets into stocks/indexes after a dip. So I am going to ride the market.
The pension plan is to take it early with COLA gains.
The social security plan is to take the wife's early and hold mine to 70.
If the market plan appears to struggle (crash is over 2 years below prior level), then taking my social security makes sense to protect the principle and lessen any issue.
I dont like money on the sidelines. But I can justify 2 years expenses free from any risk (forced to sell bonds can bite me in the arse just as easily).
My plan is for 2 years living expenses on the sidelines. Maybe a cd ladder. I am sure there are plenty of options available.
The rest will be out of stocks split between a dow jones index and s&p index.
Most dips do not last more than a few months.
Most crashes do not last over 2 years.
I am not smart enough to time the market and move assets into stocks/indexes after a dip. So I am going to ride the market.
The pension plan is to take it early with COLA gains.
The social security plan is to take the wife's early and hold mine to 70.
If the market plan appears to struggle (crash is over 2 years below prior level), then taking my social security makes sense to protect the principle and lessen any issue.
I dont like money on the sidelines. But I can justify 2 years expenses free from any risk (forced to sell bonds can bite me in the arse just as easily).
Posted on 8/27/26 at 10:46 am to Grinder
Sovereign bonds have a math problem. You should only own them if you believe the US govt is going to cut entitlements and defense 20% across the board tomorrow, forever. Otherwise they are uninvestable and will continue to be until the boomer generation is dead and gone due to the entitlement math.
High yielding corp bonds can be substituted for a traditional sovereign basket with appropriate due diligence but that is a large time commitment. Not many folks have the appetite for that. Retirement planning is much more complicated today than it was for the preceding 40-50 years when we were firmly in a secular bond bull market.
High yielding corp bonds can be substituted for a traditional sovereign basket with appropriate due diligence but that is a large time commitment. Not many folks have the appetite for that. Retirement planning is much more complicated today than it was for the preceding 40-50 years when we were firmly in a secular bond bull market.
Posted on 8/27/26 at 10:55 am to Grinder
I’m 80/20 stocks and cash in CD ladders.Stocks are mostly in mutual funds,ETF’s and value stocks.About 10% in growth stocks
I’m 75,wife is 73.
We waited until 70 to draw S.S so we could actually live on S.S. plus the paltry pension I get.
The 20 % cash would cover 2 years living expenses even without S.S.
80/20 is pretty aggressive but we’re both in good health(so far),neither of us take any meds so our medical expenses are minimal.House has long been paid off,2 fairly new vehicles(‘20 and ‘24),both paid off.
Wife is a NP,still works 24 hours a week but a good chunk of that goes to help grandchildren with college.
I’m 75,wife is 73.
We waited until 70 to draw S.S so we could actually live on S.S. plus the paltry pension I get.
The 20 % cash would cover 2 years living expenses even without S.S.
80/20 is pretty aggressive but we’re both in good health(so far),neither of us take any meds so our medical expenses are minimal.House has long been paid off,2 fairly new vehicles(‘20 and ‘24),both paid off.
Wife is a NP,still works 24 hours a week but a good chunk of that goes to help grandchildren with college.
Posted on 8/27/26 at 10:59 am to Grinder
4 yrs into early retirement and I'm still 100% equities.
I wouldnt recommend that for everyone. Fortunately, we live well but spend pretty modestly and I cover expenses with pension. I figure the pension substitutes for the conservative portion of a retirement portfolio. There's truly no one size fits all approach.
I wouldnt recommend that for everyone. Fortunately, we live well but spend pretty modestly and I cover expenses with pension. I figure the pension substitutes for the conservative portion of a retirement portfolio. There's truly no one size fits all approach.
Posted on 8/27/26 at 12:31 pm to TorchtheFlyingTiger
There are other considerations, as some have indicated, that inform an appropriate retirement mix in the market. Pensions, social security, cash interest income, and dividends are examples.
I’m retired and have a 58%-42% stock bond mix, that I haven’t touched.
I have a pension, social security and a laddered CD portfolio that would allow me to ride out the market dips. I roll over my dividends to hedge inflation.
In my opinion, passive income is the critical factor in determining the mix. As Warren Buffet always encouraged, make money while you sleep.
I’m retired and have a 58%-42% stock bond mix, that I haven’t touched.
I have a pension, social security and a laddered CD portfolio that would allow me to ride out the market dips. I roll over my dividends to hedge inflation.
In my opinion, passive income is the critical factor in determining the mix. As Warren Buffet always encouraged, make money while you sleep.
Posted on 8/27/26 at 1:58 pm to Grinder
I'm currently 31% stock (most leveraged ETF), 39% Covered Call ETFs, and 30% Bonds. Two bucket system. One generates income that feeds the second bucket where I withdraw income.
Posted on 8/27/26 at 2:01 pm to Grinder
At some point, retirees need to spend some money.
I manage $1,000,000 for my mom who is in her 80s.
About half is a Traditional IRA. The other half is a brokerage account.
She still has stock exposure with mostly ETFs and mutual funds.but there are CDs and money market fund which keep about 18 months of expenses in them.
In sum about 25% cash/money market fund/bonds.
I manage $1,000,000 for my mom who is in her 80s.
About half is a Traditional IRA. The other half is a brokerage account.
She still has stock exposure with mostly ETFs and mutual funds.but there are CDs and money market fund which keep about 18 months of expenses in them.
In sum about 25% cash/money market fund/bonds.
Posted on 8/27/26 at 2:20 pm to TorchtheFlyingTiger
This is my plan as well. I invested early and often. My thinking is the equities will pass to my children and since I don't think I need the safe bond allocation, I can take advantage of a time horizon that is beyond my lifetime.
This post was edited on 8/27/26 at 2:22 pm
Posted on 8/27/26 at 6:01 pm to Grinder
Asset location can be just as important as asset allocation. Pay attention to that as well. Roth should be more aggressive than Traditional etc.
Posted on 8/27/26 at 6:44 pm to TX_Tiger23
quote:
Asset location can be just as important as asset allocation. Pay attention to that as well. Roth should be more aggressive than Traditional etc.
Needed to be repeated. +1
Posted on 8/27/26 at 6:56 pm to Grinder
It depends more on your time horizon than your age.
You don't want to be in stocks if there's a 2008 situation when you have to draw down (or even a blip like 2020 and last year's trade war).
If you have a few years and you're not going to be taking a lot out you're better off with stocks. They're higher risk higher reward in the short term while a 5 year window makes it likely they'll recover from a bear market.
Also depends on how much of it is intended as a nest egg for your heirs, in which case you want to invest as if you're their age.
You don't want to be in stocks if there's a 2008 situation when you have to draw down (or even a blip like 2020 and last year's trade war).
If you have a few years and you're not going to be taking a lot out you're better off with stocks. They're higher risk higher reward in the short term while a 5 year window makes it likely they'll recover from a bear market.
Also depends on how much of it is intended as a nest egg for your heirs, in which case you want to invest as if you're their age.
Posted on 8/27/26 at 7:17 pm to Grinder
Like others have pointed out I would seriously look at the bucket system.
Run some scenarios using ChatGPT and then Monte Carlo it once you see the scenario your risk tolerance most agrees with. You’ll be amazed
For me it was:
Bucket 1 | 3 years expenses in cash/CDs etc, 10-15% of portfolio
Bucket 2 | 80/20 split asset to bonds, 50-60% of portfolio
Bucket 3 | 25/30% growth funds like Russell 2k
Run some scenarios using ChatGPT and then Monte Carlo it once you see the scenario your risk tolerance most agrees with. You’ll be amazed
For me it was:
Bucket 1 | 3 years expenses in cash/CDs etc, 10-15% of portfolio
Bucket 2 | 80/20 split asset to bonds, 50-60% of portfolio
Bucket 3 | 25/30% growth funds like Russell 2k
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News