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60/40 too risky for 73 year old
Im operating 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 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 price, however it’s all about threat 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 manner 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 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 risky 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 manner 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 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 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 manner 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 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 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? – seemed it up and I believe they’re means) , so by definition many individuals longer. I believe strategies 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 carefully at your loved ones tree. Until you will have 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 many others., 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 will not be too aggressive. 60 / 40 provides 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 not taking a look at 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 exhibits 5% is okay.
https://thepoorswiss.com/updated-trinity-study/
The next inventory share usually has a better secure withdrawal price, however it’s all about threat tolerance. A spia could be one thing to look into.
The assertion {that a} increased inventory share usually has a better secure withdrawal price is probably not correct. In keeping with a current article by Allan Roth, it seems that the very best SWRs are related to inventory allocations between 30 and 50%. https://www.advisorperspectives.com/art … allan-roth
Alternatively, increased inventory percentages are usually related to increased common legacies at dying.
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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 manner 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 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 really be essentially the most wise 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.
Re: 60/40 too risky for 73 year old
TheRoundHeadedKid wrote: ↑Mon Sep 09, 2024 7:46 pm
If that’s 60% shares / 40% bonds, then that’s manner 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 on your age. For instance, the L fund in a TSP is 73% bonds (G & F funds) and 27% equities (S, I, C funds).
You are misusing life expectancy numbers. 76 is the life expectancy at start, not at age 73.
Re: 60/40 too risky for 73 year old
It is not clear whether or not your concern is your private threat tolerance, e.g., how nicely you may tolerate a market downturn earlier than presumably panic promoting, or whether or not it’s your age alone that ought to decide your allocation (“age in bonds”). Or perhaps it is each? If it is the primary concern, then it might be greatest to go 50/50 or 40/60, i.e., what ever will mean you can tolerate and never promote in a market crash.
“Sure, investing is straightforward. However it’s not simple, for it requires self-discipline, endurance, steadfastness, and that almost all unusual of all presents, widespread sense.” ~Jack Bogle