Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Changing the stock/bond mix with time
Old 04-22-2004, 04:13 PM   #1
Dryer sheet wannabe
Join Date: Sep 2003
Posts: 16
Changing the stock/bond mix with time

I have assumed that most of the portfolios presented on this board do not change much with time, as far as the stock/bond mix is concerned. A recommended portfolio that is 50/50 is not typically adjusted to be more conservative with time, even if the person is in retirement. On the other hand, a few posts have suggested things like the Vanguard Target Funds. These automatically get more conservative. For example, the Target 2025 starts at 60/40, after 10 years is at 50/50 and after 20 years is at 35/65. This seems very conservative for someone who may have 20, 30 or 40 years in retirement. The In Retirement Fund is 20/80. Any advice/comments about this?

AlanS is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Changing the stock/bond mix with time
Old 04-22-2004, 04:47 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,324
Re: Changing the stock/bond mix with time

I presume 'they' are making certain assumptions about potential customers as to age/life expectancy and use of funds as income sources.

Since ER's don't often fit the target catagory, we're left to do more study as how to fit our situation. At age 60 after ten years in ER. I still feel in a non-fit zone for the canned product. At 66 - may take another look - depending on how 'old' I feel.

unclemick is offline   Reply With Quote
Re: Changing the stock/bond mix with time
Old 04-22-2004, 05:01 PM   #3
Thinks s/he gets paid by the post
charlie's Avatar
Join Date: Mar 2004
Location: Dallas
Posts: 1,211
Re: Changing the stock/bond mix with time


I am 70 and own Target Retirement 2025, a 60/40
stock to bond mix. This fund is in my wife's IRA and
in our after tax fund. I am using value tilting index
funds in my IRA at a 60/40 mix to balance the
Total Stock Market Index funds in the 2025 funds.

My wife is 8 years away from "required minimum
distributions" and gets glassy eyed at this kind
of discussion so, for her sake, I am keeping her
IRA and our after tax fund dirt simple. Since I
am in the RMD stage, I recently decided to switch
out of 2025 to all index funds in my IRA to better
manage withdrawals. We are withdrawing from
my IRA at a 6% rate or 4.2% from the total portfolio.

In case I need a drool cup prematurely or step in
front of an 18 wheeler, I have instructed my wife to
switch back to the 2025 fund.

We are taking a tax hit in the after tax 2025 but it
should be a relatively safe investment for the next
30 years and provide a nice nest egg for our brood.
We hope to avoid any withdrawals from this for at
least 20 years.

At this stage in life, I like the way the 2025 becomes
more conservative with time, especially if I am not here
to mother hen things. You can always spice things up
with stuff like REITS, small cap value, large value etc.
but the target retirement funds are a good core holding,
IMHO. If you like a non changing allocation, then
Balanced Index or one of the life strategy funds might
suit you better. Managed funds like STAR, Wellington
and Wellesley are also excellent.


Charlie (aka Chuck-Lyn)
charlie is offline   Reply With Quote
Re: Changing the stock/bond mix with time
Old 04-25-2004, 11:14 AM   #4
Posts: n/a
Re: Changing the stock/bond mix with time

I'll turn 68 this Wednesday, and have been retired 12 years. I also manage finances for my 91 year old mother. We use a 60/40 split in all accounts: 40% total domestic stocks, 20% total international stocks, 25% short-term bonds, 10% REITs, and 5% cash, and it seems to work well for us. A 60/40 split already represents a reduction in volatility risk for us, so I don't envision changing that allocation further with age. Except for cash, our investments are in Vanguard index funds. We draw under 4%; my mother draws under 3%.

  Reply With Quote
Re: Changing the stock/bond mix with time
Old 04-25-2004, 04:01 PM   #5
Posts: n/a
Re: Changing the stock/bond mix with time

Hello Don Bell and Happy Birthday! My idea of
successful ER is living to 68. Last night I had a real nightmare. I dreamed I was back working and
my co-workers were giving me crap. I was
miserable and frantic to get out. The capper was
that my ex-wife showed up near the end of the dream. I woke in
a highly agitated state

John Galt
  Reply With Quote
Re: Changing the stock/bond mix with time
Old 04-26-2004, 11:06 AM   #6
Recycles dryer sheets
Join Date: Sep 2002
Posts: 54
Re: Changing the stock/bond mix with time


My mother is 91. She has a brother 97, sister 98, and another brother 104, all in reasonably good health. So, at 68, I think it's wise to plan for at least 40 years of continued retirement, which would mean I was retired a lot longer than I worked. I was late 20's when I got my first real job after completing a post-doc, so my career was about 27 years.

db is offline   Reply With Quote
Re: Changing the stock/bond mix with time
Old 04-26-2004, 02:58 PM   #7
Posts: n/a
Re: Changing the stock/bond mix with time

I assume nothing about my life span based on my
relatives. The odds might favor me but I refuse to count on anything over about a month. My parents are both alive
and in pretty good shape (86 and 85). My paternal
grandfather and great grandfather made it to 100+.
But, my Dad also had 2 sisters, both dead at 42. IMHO,
you make these optimistic assumptions at your peril. It will serve you to no good end.

John Galt
  Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
FIRE'd only: What's your time vs. money tradeoff free4now FIRE and Money 8 01-26-2007 06:00 PM
Part Time Work and Insurance AlmostDone FIRE and Money 3 01-19-2007 06:44 PM
long time reader, first post savedapile Hi, I am... 4 12-15-2006 06:45 PM
Part time to no time Martha Life after FIRE 54 12-08-2006 10:29 PM


All times are GMT -6. The time now is 04:39 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.