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60/40 too risky for 73 year old
Im working a two fund index fund 60/40. My complete retirement cash is on this, would this by okay for a 73 12 months previous. Or would a 40/60 portfolio be extra acceptable of my age. I draw out 5% yearly……..ty
Re: 60/40 too risky for 73 year old
The truth that you’re asking if 60:40 is simply too dangerous would possibly point out that fifty:50 is a more sensible choice for you.
Re: 60/40 too risky for 73 year old
https://thepoorswiss.com/updated-trinity-study/
A better inventory proportion typically has a better secure withdrawal charge, however it’s all about threat tolerance. A spia may be one thing to look into.
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Re: 60/40 too risky for 73 year old
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by TheRoundHeadedKid »
If that’s 60% shares / 40% bonds, then that’s method too dangerous if one considers the typical U.S. life expectancy is 76.1 years. I do know all people thinks they’re above common. I might comply with the allocation for a life cycle fund on your age. For instance, the L fund in a TSP is 73% bonds (G & F funds) and 27% equities (S, I, C funds).
Re: 60/40 too risky for 73 year old
Some bond choices are extra unstable and/or much less credit-worthy than others. Quick-term treasuries are at one finish of the chance spectrum whereas high-yield “junk” bonds are on the different.
One factor that humbles me deeply is to see that human genius has its limits whereas human stupidity doesn’t. – Alexandre Dumas, fils
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Re: 60/40 too risky for 73 year old
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by bradpevans »
TheRoundHeadedKid wrote: ↑Mon Sep 09, 2024 7:46 pm
If that’s 60% shares / 40% bonds, then that’s method too dangerous if one considers the typical U.S. life expectancy is 76.1 years. I do know all people thinks they’re above common. I might comply with the allocation for a life cycle fund on your age. For instance, the L fund in a TSP is 73% bonds (G & F funds) and 27% equities (S, I, C funds).
The OP would need the expectation for a 73 12 months previous
(It’s not clear why it’s so dangerous, at the very least to not me)
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Re: 60/40 too risky for 73 year old
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by brightlightstonight »
TheRoundHeadedKid wrote: ↑Mon Sep 09, 2024 7:46 pm
If that’s 60% shares / 40% bonds, then that’s method too dangerous if one considers the typical U.S. life expectancy is 76.1 years. I do know all people thinks they’re above common. I might comply with the allocation for a life cycle fund on your age. For instance, the L fund in a TSP is 73% bonds (G & F funds) and 27% equities (S, I, C funds).
The general life expectancy within the US is irrelevant, as a result of the OP has already reached 73 years of age. SS actuarial tables for individuals reaching 73 is about 12 extra years for males, 14 for females. And people are simply averages (truthfully, do not know in the event that they’re means or medians? – regarded it up and I believe they’re means) , so by definition many individuals longer. I believe options above to plan for a 20 12 months retirement make sense.
You are additionally proposing an age-in-bonds method, which can be excessively conservative for the OP.
OP: if 60/40 feels too dangerous, then by all means nudge it again – threat tolerance is private.
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Re: 60/40 too risky for 73 year old
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by AlaskaTeach »
I might look intently at your loved ones tree. Except you’ve got one thing that actually stands proud, i.e. a grandpa who lived 10 years in an Alzheimer’s unit, different ancestors dwelling to age 100, and so forth., I might plan for 17 years on the most. That will get you to age 90.
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Re: 60/40 too risky for 73 year old
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by Tyler Aspect »
So long as you may resist a panic promote upon an financial downturn, then 60 / 40 isn’t too aggressive. 60 / 40 offers you a bit extra common return in comparison with 50 / 50.
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Re: 60/40 too risky for 73 year old
mhalley wrote: ↑Mon Sep 09, 2024 7:31 pm
At 73, you’re now not a 30 12 months retirement. The above talked about desk doesn’t do 20 years, which might be extra real looking. This text features a graph for a 20 yr withdrawal that reveals 5% is okay.
https://thepoorswiss.com/updated-trinity-study/
A better inventory proportion typically has a better secure withdrawal charge, however it’s all about threat tolerance. A spia may be one thing to look into.
The assertion {that a} larger inventory proportion typically has a better secure withdrawal charge is probably not correct. In keeping with a latest article by Allan Roth, it seems that the best SWRs are related to inventory allocations between 30 and 50%. https://www.advisorperspectives.com/art … allan-roth
Then again, larger inventory percentages are typically related to larger common legacies at demise.
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Re: 60/40 too risky for 73 year old
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by BitTooAggressive »
TheRoundHeadedKid wrote: ↑Mon Sep 09, 2024 7:46 pm
If that’s 60% shares / 40% bonds, then that’s method too dangerous if one considers the typical U.S. life expectancy is 76.1 years. I do know all people thinks they’re above common. I might comply with the allocation for a life cycle fund on your age. For instance, the L fund in a TSP is 73% bonds (G & F funds) and 27% equities (S, I, C funds).
Why is it too dangerous? Say he lives the typical life expectancy. However the common life expectancy for somebody that has made it to 73 is above common anyhow. A rising fairness allocation can truly be probably the most smart together with your lowest fairness simply earlier than retirement. A 20 12 months outlook might be prudent. 40/60 to 60/40 are in all probability all okay.