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60/40 too risky for 73 year old
Im working a two fund index fund 60/40. My entire retirement cash is on this, would this by okay for a 73 12 months outdated. Or would a 40/60 portfolio be extra applicable 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 just too dangerous would possibly point out that fifty:50 is a better option for you.
Re: 60/40 too risky for 73 year old
https://thepoorswiss.com/updated-trinity-study/
The next inventory share usually has a better secure withdrawal fee, however it’s all about danger tolerance. A spia could 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 everyone thinks they’re above common. I might observe the allocation for a life cycle fund to 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 risky and/or much less credit-worthy than others. Brief-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 everyone thinks they’re above common. I might observe the allocation for a life cycle fund to 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The OP would need the expectation for a 73 12 months outdated
(It’s not clear why it’s so dangerous, a minimum of 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 everyone thinks they’re above common. I might observe the allocation for a life cycle fund to 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 folks 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? – appeared it up and I feel they’re means) , so by definition many individuals longer. I feel 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 – danger 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 carefully at your loved ones tree. Except you may have one thing that basically stands proud, i.e. a grandpa who lived 10 years in an Alzheimer’s unit, different ancestors residing 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’ll be able to resist a panic promote upon an financial downturn, then 60 / 40 just 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 sensible. This text features a graph for a 20 yr withdrawal that exhibits 5% is okay.
https://thepoorswiss.com/updated-trinity-study/
The next inventory share usually has a better secure withdrawal fee, however it’s all about danger tolerance. A spia could be one thing to look into.
The assertion {that a} larger inventory share usually has a better secure withdrawal fee is probably not correct. In line 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
Alternatively, larger inventory percentages are usually related to larger common legacies at loss of life.