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Hi all,
I have been early retired now for 1 year ( 59 ), the first 6 months was strange but now I could never go back.
The question I have is asset allocation. The story goes that anything between 100% stocks to 60/40 stock/bonds 50/50 etc. is a good allocation. Aparently the bond portion is for income.
Well my idea of looking at it is as follows, say you want 50/50 ( just for example ) you have a small pension of say $30,000 a year. At 5% interest that would require $600,000 capital. If you had capital of $600,000 and placed it ALL in index funds ( divesified of course.) That would be the eqivalent of 50/50 stock /bond allocation.
In other words the pension becomes the bond part of the portfolio.
Am I missing something.
Regards Brit.
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