There has been a lot of discussion and media attention on how bonds are going to plummet as inflation rises. I hear alot about focusing on short and more mid-range bonds and staying away from longer term bonds. Problem is, how do you do that?
Case in point: we have a modest IRA and 401(k) in taxable accounts. We are both retired, me 60, she 58. I am fortunate in that I receive a pension and family medical insurance at no cost. This more than covers our living expenses, with a small amount left. Savings, which is kept entirely in an online savings account with Ally, represents roughly 2 years of living expenses. After 1.5 years of retirement, there have been no surprises and the finances have worked out as planned.
I will be eligible, and plan to, collect SS of about $1,600 per month in 21 months. DW 2 years after that.
Therefore, the IRA and 401(k) are, absent a life-changing event, extras for us that we cannot envision at this point even withdrawing, at least until RMD is required. These accounts are probably modest by many people's standards, but still sizable (approaching 1/4 mill). Still, I do not want to lose money (who does?), but would also accept modest gains of inflation plus a little.
Presently, we are probably considered more aggressive than we should be at our age: 401(k) has 75% agressive stock mutual fund (3 different funds) and 25% US Bond Index Fund (limited choices). IRA has 35% aggressive stock (Walgreens and Vanguard Dividend Growth Investment) and 65% Vanguard Wellsley.
So, questioin is: if I wanted to reduce my bold holdings, what might you suggest? Or, should I reduce my aggressive holdings and increase Wellsley, or go to Wellington, which has fewer bond holdings than Wellsley.
Thanks for any feedback and sorry it got long.