Poll: Describe your bond strategy

[chinaco]

I would like to understand how people view equity and bonds in terms of risk as they age.

Please choose the bond allocation that best fits your planned or actual approach. Interpret the number as follows Age(%bonds) Age(%bonds) etc.

I will assume the rest is held in equity.

Please comment on your actual/planned approach of how you will minimize your exposure to equity market fluctuations as you age.

 

[LOL!]

I cannot imagine going to less than 60% equities ... ever.

 

[unclemick]

Lead sled dog - Target Retirement 2015 - currently a young at heart 63(ie should be TR 2010) - mostly traditional IRA - a tad, 7%, Roth.

I will hit RMD in 2015 - so ten years later the bonds/short term reserves have built to roughly 65% or so. Age 80 to 90 should be flat 65% fixed.

I don't plan on even watching.

heh heh heh

 

[grumpy]

I have no bonds or bond funds other than <2% allocation to I-bonds as an inflation hedge. My fixed income allocation is in Vanguard MM Prime and in the TSP G-fund. Everything else is equities.

Grumpy

 

[Moemg]

I just turned 60 and I have 14% in bonds now and will probably go to 20 or 25%.I don't think I'll ever go to more than 30% bonds and I sleep fine .

 

[DRiP Guy]

Here is my highly sophisticated bond strategy:

I picked up 20% of whatever the single bond fund offering they had in my 401(k) was.

Fortunately, it does not seem too bad, although just like a typical 401(k), I could do better on expenses buying a duplicate fund on the market (outside of the retirement account).

 

[Bikerdude]

Over time a 50/50 allocation captures about 85% of an all equity portfolio with 1/2 the risk, so I will continue to invest in an increasing bond allocation as I grow older. I do not feel I should take risks that I do not need to in retirement.

 

[bpp]

I've been trying to force myself up to age-10 in bonds, mostly so I don't outsmart myself. If only they weren't so darn tax-inefficient.

 

[setab]

Never understood them. I'm in 2015 too. Liked the way the numbers looked. I wing everything so why not this too? Uncle Mick, you're my idol.

setab

 

[perinova]

I couldn't find a category in the poll.
In my 40s I am at 25% bonds. I was planning on living this way for ever since it is on/closeto the efficient frontier. I have 25% in foreign stocks and 50% in US stocks.

Is this a good/bad idea?

 

[LOL!]

Is this a good/bad idea?

That idea is very similar to what I am doing and intend to keep doing.

 

[ats5g]

I use a combo of G fund [TSP] and VBMFX. I would've used the F fund, but I wanted to use more of the I fund [MSCI EAFE index]. Plus, I can save 0.0086% in expenses risk free.

FWIW, we plan on keeping the ratio of VBMFX to stocks roughly the same, and just increase the G fund as we age. Just like the L funds do.

- Alec

 

[saluki9]

I don't have nearly as much faith in equities as some here.

I'm 29 and currently I'm a little over my target allocation of 30% as I get older this will shift towards 50%.

My strategy is a global using TIPS and the DFA 2 year global fund.

 

[HFWR]

25% TIP
5% generic short-term fund

 

[Texas Proud]

My only 'bond' is the cash balance account that my company offers... they put money aside and pay a 'market' rate on the balance... this year 6%... I have NO ability to change this...

All other 'bonds' are my cash reserves... so take out my reserves and what I can't change and I am 100% equities...

 

[audreyh1]

My bond strategy is not linked to my age, but rather to a desired asset allocation. I don't know what I'll do 30 years from now, but I don't perceive increasing it over the next decade or so just because I'm getting older.

Audrey

 

[unclemick]

2.87% current yield (TR 2015) - lest I forget the Norwegian widow begs me to point out - always have enough real money to cover the core budget.

That plus SS plus non-cola pension plus dividends/interest covers the core budget.

Still plan to do a 'wild and frivolous' 5% of total portfolio in my 60's while I'm still young enough to bogey.

heh heh heh

 

[Alan]

I am 52, FI but will RE in 3 years 'cos I'm chicken.

In my 30's I started following an allocation plan from a retirement publication I picked up from Money magazine. The plan shows 60/40 this close to RE but I have been so successful in building a nest egg I have moved to 50/50 because the returns I need are now much lower and I like the stabilty it gives.