In my opinion,retirees who no longer have earned (and thus inflation-sensitive) income should concentrate on income flow, not on the market value of the investments that produce that income. It clarifies our discussion to focus on income. That argues for long-term bonds - I use VWLUX (Vanguard Long-Term Tax-Exempt) due to our tax bracket. I am indifferent to the market value, as I don't intend to sell. Note that for someone in the accumulation phase VWIUX (intermediate term) would be the usual recommendation. We have a ladder of Ibonds (the 1998-2001s, paying 3% to 3.6% real) to be sold 2025-2031 (when the last mature) providing $70,000 to $80,000 per year added income. Individual TIPS maturing 2032-2033 provide the same for these years. 2033 is my wife's age 92 (I'll be gone by then). Thereafter our son will begin selling from our stock and muni bond funds,
in which we have enough capital to support my wife for many years.
We hold only 30% equities - you can read the Morningstar article "How Rising Interest Rates Affect Your Retirement Plan" (February 23, 2024) for the
claim (substantiated elsewhere) that the highest safe withdrawal rates over both short and long periods correspond to between 20% and 40% equities. Thus, 30% equities fits our emphasis on income flow. Bequests would demand higher equity weighting, but we have provided that by large gifts before death and a Roth IRA (equity-heavy) that passes to our children on my death.
in which we have enough capital to support my wife for many years.
We hold only 30% equities - you can read the Morningstar article "How Rising Interest Rates Affect Your Retirement Plan" (February 23, 2024) for the
claim (substantiated elsewhere) that the highest safe withdrawal rates over both short and long periods correspond to between 20% and 40% equities. Thus, 30% equities fits our emphasis on income flow. Bequests would demand higher equity weighting, but we have provided that by large gifts before death and a Roth IRA (equity-heavy) that passes to our children on my death.
Statistics: Posted by statman — Tue Sep 03, 2024 8:50 pm — Replies 41 — Views 3363