walkinwood
Thinks s/he gets paid by the post
https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/
Another insightful article by Kitces. He addresses the risk of an equity melt-down in the few years leading up to and after retirement when the portfolio is at its largest. His solutions - increase bond allocation as you near retirement (above your long term AA) and slowly reduce it to target over the first decade of retirement.
I feel that the increase bond allocation in the years leading up to retirement is not as important to Early Retirees, since our retirement date is flexible. So if there is a market drop as we approach our target date, we can just move it back. (It may be harder to do in practice since it will be mentally devastating to many) But, having a higher bond allocation for the first decade after ER may be a wise move since it could increase the portfolio's probability of survival over our longer retirement time frames.
For full disclosure - We're closing in on our first decade of ER (8+ years under our belt), so we'll just stick to our constant 60/40 equity/bond allocation.
Another insightful article by Kitces. He addresses the risk of an equity melt-down in the few years leading up to and after retirement when the portfolio is at its largest. His solutions - increase bond allocation as you near retirement (above your long term AA) and slowly reduce it to target over the first decade of retirement.
I feel that the increase bond allocation in the years leading up to retirement is not as important to Early Retirees, since our retirement date is flexible. So if there is a market drop as we approach our target date, we can just move it back. (It may be harder to do in practice since it will be mentally devastating to many) But, having a higher bond allocation for the first decade after ER may be a wise move since it could increase the portfolio's probability of survival over our longer retirement time frames.
For full disclosure - We're closing in on our first decade of ER (8+ years under our belt), so we'll just stick to our constant 60/40 equity/bond allocation.