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Old 10-26-2011, 01:06 PM   #61
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Join Date: May 2009
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Originally Posted by Alan

I think this is why an individual's risk tolerance is so important in financial planning. Greg has a secure pension and knows that if the worst happens he should always have that, so he feels confident to have a very high equity ratio.

I also have have pensions but they are non-COLA and only covered 70% of post-retirement expenses when we ER'ed at age 55. My (our) personal risk tolerance means we have only 35% in equities with a lot of dividend producing funds to avoid, hopefully, having to sell off equities to meet our needs. Our e-fund will soon be 100% I-bonds after the last 2 of our 5% CD's mature in December. Our "cash" buffer is the VG short term bond fund that we tap from time to time through the year, and into which the quarterly and annual fund distributions go.
Alan, have you been in retirement long enough to notice the effect of inflation, in relation to its effect on the amount of your non COLA pension coverage of your monthly budget? My pension has been reduced to a light version before I even received my first COLA this January. So long term, I may need to plan better for it.

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