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Calling all 60+ year olds...what's your asset allocation?

#11
There is no absolute answer to your question. A general rule that has been around for a long time is that 100 minus your age should be a guideline in regards to how much stock you should own. Being in your 60's and planning to retire within a few years, an allocation of 67% in stock seems too high.
Other things that should be factored in are liquid assets. risk tolerance, projected expenses and earnings during retirement, possible plans for relocation, etc. Since your projected lifespan could be 25-30 years, you must consider future inflation while balancing the reality that you probably cannnot replace extreme losses in asset value once you retire.
 
Diversification and hedging should become more important to you as you get closer to retirement
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#12
I am 65 and have been retired for 3 years.  My allocation is:
Current
Domestic Stock
72%
Foreign Stock
16%
Bonds
0%
Short Term
9%
Unknown
3%
Other
0%


I don't need bonds for income because my pension and Social Security could cover basic expenses if needed.  Most of the stocks are good dividend growth stocks in which I currently reinvest the dividends.  At some point I will change the dividends to cash to withdraw.  Don't wait to retire until you're 65 if can make an earlier retirement work.
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#13
(11-29-2018, 12:05 PM)Shiny Wrote: I am 65 and have been retired for 3 years.  My allocation is:
Current
Domestic Stock
72%
Foreign Stock
16%
Bonds
0%
Short Term
9%
Unknown
3%
Other
0%


I don't need bonds for income because my pension and Social Security could cover basic expenses if needed.  Most of the stocks are good dividend growth stocks in which I currently reinvest the dividends.  At some point I will change the dividends to cash to withdraw.  Don't wait to retire until you're 65 if can make an earlier retirement work.

Bonds serve more functions than income.  They always represented an alternative to equities foremost.  Traditionally (less 2008/9), my 28-year experience with bonds has been, stock go up/bonds go down (a bit); bonds go up/stocks go down (a bunch).  That changed in 2008-2009 as they both went down in value...but bonds still paid their coupon.
 
Pre-retirement, I did buy bonds for safety and perceived income.  But, like you, I do not need the income from bonds.  However, I do need a portfolio balancing agent (for when stock decline).  We are in an exceptional bull market; and being contemporaries, it is easy to be spoiled and complacent with the up-trending market.  I recall 1987 and 2001 and 2008 just like yesterday.  When a 20-40% market drop occurs, and no end in sight; bonds will be my comfort food for tiding over the trooth.
 
No bonds?  Tragedy.....I hope it does not happen, but I asked myself in 2001....what was I thinking?  Back then I had 7% of my portfolio in bonds.  I had many years to reclaim my losses, but at 65, I am not going back to work or change my livelihood with a failed equity position allocation only to make a little more money that I really don't need in the first place.  Balance is important from my 40 years of investing experience.....IMHO
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#14
tbcg12 -  Sounds good to me!!!! You have to have growth, without being yo risky!!! Good job !!!

Shiny - Your portfolio is similar to mine. I don't have bonds either. If our good quality companies all fail, the world is caving in.
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#15
Domestic Bonds - 10.2%
Global Bonds - 7.1%
Large Cap Stocks - 74.1%
Small Cap Stocks - 2.0%
International Stocks - 5.3%
Cash - 1.2%
TOTAL Investments - 100.0%
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#16
One size does not fit all.  There are too many variables, i.e., assets, income, and expenses.
 
I will turn 60 next month.  I retired when I was 51.  My expenses have been much lower than expected, and my return on investments have been better than expected.  With almost 10 years of retirement under my belt, I can confidently say that I am comfortable with 80 percent in equities.  However, not everyone may be comfortable with this ratio.  I can afford to take higher risks because I can afford to lose more. In addition, I know the losses will only be temporary, and the market will continue to make new highs.
 
Draw up several scenarios to determine a comfortable allocation for yourself.  Be conservative with your growth rates, and aggressive with your expenses.
 
Calculate your investable income; use 7%-9% growth rates for equities and 3%-5% for bonds.
 
Calculate your monthly expenses and multiply by 1.5.
 
Determine how much monthly income you will need and work backwards.  Use your projected income to determine your allocation, rather than drawing up an allocation based on age.
 
You may be surprised that you can live with a 60/40 allocation without any compromises to your minimum required income.
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#17
Not sure what you will get out of all this, but at 68, retired 13 years, our allocation is:
 
49% Domestic stock (half equities, half funds)
12% Foreign stock
30% Bonds/funds
9%  Cash
 
This represents a portfolio of $3.1 million, which has earned an average of 7.66% / year since 2004.
 
This doesn't include real estate, net value of which is about $750K.
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#18
Age 58 , retired 2 years ago -350k in 2 homes (1 a rental generating positive income ), debt free ,  2 pensions , and 390k in equites ( 200k in stocks , 190k in funds ) .  I treat my homes as though it is a long term bond increasing in value  by 3% a year (actual is closer to 5% overpast 5 years )  -  the 390k is broke down this way 


Current

Domestic Stock
69%

Foreign Stock
25%

Bonds
0%

Short Term
0%

Unknown
0%

Other
0%
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#19
It depends on your financial condition, I got the minimum to survive (gov't bonds) on the economy turn south for a long term, and the rest go to aggressive stocks. Plan for 90+ years old, sleep well every night.
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#20
this my allocation, I am a few months shy of 62 and still working but hope to retire soon and work part time. It probably is a bit conservative (maybe too much cash on hand). I have about 150k in short term CDs paying about 1.2% since parking the money in cash in the brokerage account pays basically nothing. I have another 120k in cash in the cash account. I admit, I am a bit nervous about the market highs right now so that is the reason for the cash and bond allocation. I lost about 50% of my portfolio in 2008 thus the concern but as you know, the market is up about 300% since then
 

Net

Domestic Stock
36%

Foreign Stock
4%

Bonds
35%

Short Term
21%

Unknown
0%

Other
4%
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