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Focus on all normal (i.e. non-personal) investing questions and points, investing information, and concept.
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Subject Creator
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Asset allocation approaching retirement
Hello Discussion board,
My husband (57) and I (55) are planning to retire in 5 years. Up till now, we have used a 60:40 asset allocation and have been comfy weathering the storms and up and down markets with that. Nevertheless, now that we’re inside 5 years of retirement, we have observed that we have change into uneasy with having 60% of our retirement financial savings in shares. With that 5 yr time horizon till retirement, how (if in any respect) ought to we alter our asset allocation?
As at all times, many thanks!
Atticus713
“Simplicity is the grasp key to monetary success” J.C. Bogle
Re: Asset allocation approaching retirement
In case your life expectancy at retirement is 30 years, then you’re investing for a 30-year interval.
One factor that humbles me deeply is to see that human genius has its limits whereas human stupidity doesn’t. – Alexandre Dumas, fils
Re: Asset allocation approaching retirement
Atticus713 wrote: ↑Mon Sep 09, 2024 8:55 pm
Nevertheless, now that we’re inside 5 years of retirement, we have observed that we have change into uneasy with having 60% of our retirement financial savings in shares.
There are lots of methods for AA whereas getting into retirement. Most likely the most typical is to ratchet inventory % down within the years approaching retirement, to reach at a last, often fairly low % to take care of by means of retirement. That is what retirement date funds do. One other means is the reverse strategy, by going to a low inventory publicity in the course of the years approaching retirement, and into retirement, after which rising to a last, larger %.
One factor I might do is evaluate the AA changes of retirement date funds, to see how the professionals do it. There is perhaps one you possibly can emulate, or no less than use as a place to begin.
Retired 12/31/2015, age 58 years 77 days (however who’s counting?)
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Re: Asset allocation approaching retirement
Atticus713 wrote: ↑Mon Sep 09, 2024 8:55 pm
Hello Discussion board,
My husband (57) and I (55) are planning to retire in 5 years. Up till now, we have used a 60:40 asset allocation and have been comfy weathering the storms and up and down markets with that. Nevertheless, now that we’re inside 5 years of retirement, we have observed that we have change into uneasy with having 60% of our retirement financial savings in shares. With that 5 yr time horizon till retirement, how (if in any respect) ought to we alter our asset allocation?
As at all times, many thanks!
Atticus713
This portfolio visualizer is perhaps useful for you.
Participating information: portfolio visualizer
https://engaging-data.com/visualizing-4-rule/
and
https://engaging-data.com/early-retirem … and-tools/
j 
Bogleheads Wiki: Every little thing You Must Know
Re: Asset allocation approaching retirement
My good watch tells me that I’ve averaged 8 hours of sleep at evening over the previous yr, 7 hr 57 min for the yr earlier than that, 8 hr 1 min for the yr earlier than that, and eight hr 11 min the yr earlier than that.
This signature message sponsored by sscritic: Study to fish.
Re: Asset allocation approaching retirement
Atticus713 wrote: ↑Mon Sep 09, 2024 8:55 pm
Hello Discussion board,
My husband (57) and I (55) are planning to retire in 5 years. Up till now, we have used a 60:40 asset allocation and have been comfy weathering the storms and up and down markets with that. Nevertheless, now that we’re inside 5 years of retirement, we have observed that we have change into uneasy with having 60% of our retirement financial savings in shares. With that 5 yr time horizon till retirement, how (if in any respect) ought to we alter our asset allocation?
As at all times, many thanks!
Atticus713
You say you are uncomfortable, however have you ever run situations by means of a retirement planning device? Most will assist you to change asset allocations. I notice you’re asking methods to glide right into a goal AA over 5 years, however I am curious how did you resolve in your goal retirement AA? What % of your portfolio will you have to spend yearly if you attain retirement? In my case, I am going to want lower than 3% and the instruments informed me that altering my AA had no vital influence on the possibilities of success with a 30 yr retirement. As soon as I knew that, I ended worrying about my AA and plan to stay with 60/40.
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Re: Asset allocation approaching retirement
You’ll be able to calculate a customized glide path that does this utilizing Total Portfolio Allocation and Withdrawal (TPAW).
Whole Portfolio Allocation and Withdrawal (TPAW)
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Re: Asset allocation approaching retirement
Atticus713 wrote: ↑Mon Sep 09, 2024 8:55 pm
Hello Discussion board,
My husband (57) and I (55) are planning to retire in 5 years. Up till now, we have used a 60:40 asset allocation and have been comfy weathering the storms and up and down markets with that. Nevertheless, now that we’re inside 5 years of retirement, we have observed that we have change into uneasy with having 60% of our retirement financial savings in shares. With that 5 yr time horizon till retirement, how (if in any respect) ought to we alter our asset allocation?
As at all times, many thanks!
Atticus713
60/40 in retirement is okay. I’m comparable and gliding right down to 70/30 for retirement.
Me personally, I like a few of my bond allocation briefly time period bond fund so I’ve much less volatility and might spend from for the case we had intermediate bonds get hit laborious for a pair years.
