Call me crazy, but at age 50, My wife and I retired and had no bonds. I just used a year in cash and everything else in VTSAX or legacy SP500 indexes. For the last seven years we kept 3 to 9 months of cash as a buffer against market fluctuations. Only now, that we are in year 8 of retirement, and starting to pay high college tuition, have we started to move 5 to 10% into CD's or other Fixed income as a way to ensure the required withdrawals for tuition do not drain our portfolio due to bad timing.
There are other ways to hedge/protect yourself the first few years of retirement. #1 is don't plan your whole retirement life on spending a number that is the bare minimum you need. Make sure there's some wiggle room.
I suppose at some point we may feel like we can be more conservative with our portfolio, but after a point, and your SWR is around 2% or less, does it really matter, even if there's a drop of 50% with a 6 year recovery, you're still fine. Not sure we would have reached that point if we had moved to a 60/40 portfolio 7 years ago, when interest rates were about 0.
Just lucky I guess.
There are other ways to hedge/protect yourself the first few years of retirement. #1 is don't plan your whole retirement life on spending a number that is the bare minimum you need. Make sure there's some wiggle room.
I suppose at some point we may feel like we can be more conservative with our portfolio, but after a point, and your SWR is around 2% or less, does it really matter, even if there's a drop of 50% with a 6 year recovery, you're still fine. Not sure we would have reached that point if we had moved to a 60/40 portfolio 7 years ago, when interest rates were about 0.
Just lucky I guess.
Statistics: Posted by JGinNISK — Fri Sep 26, 2025 3:21 pm — Replies 12 — Views 600