Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Total Bond Index or Stable Value Fund ?
Old 07-27-2015, 08:52 PM   #1
Recycles dryer sheets
 
Join Date: May 2015
Location: Toledo
Posts: 50
Total Bond Index or Stable Value Fund ?

I am 53 and retired 2 months ago with a government pension. My 457 and 401 k plans are balanced at 50/50. I am using my stable value fund 2.4 % guaranteed as my bond allocation. Should I be using a Vanguard total bond index instead ? Thanks for your advice.
__________________

__________________
Jpg1717 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 Early-Retirement.org 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!

Old 07-27-2015, 09:44 PM   #2
Recycles dryer sheets
Henry Lili's Avatar
 
Join Date: Oct 2009
Posts: 104
If you believe that interest rates will be going up stick to the stable value fund. It's price won't be impacted by rate increases while a total bond fund has a duration in or around 5 and will decrease in price by 5% for each point increase in rates. Last I looked, those funds were only yielding 2% or so. You are getting more yield in your stable value fund with out the interest rate risk.
__________________

__________________
Henry Lili is offline   Reply With Quote
Old 07-27-2015, 09:54 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,406
I wish I had access to a stable value fund. 2.4% is a good rate. I would use a 2.4$ stable value fund for my entire bond allocation if I had one available to me.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 07-27-2015, 10:01 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,614
Quote:
Originally Posted by Jpg1717 View Post
. . .retired 2 months ago with a government pension.
Are you a retired federal employee with access to the TSP and the G Fund? If so, add that to your "things to watch" for holding your bond allocation. It yields 2.25% now (so not as good as your stable value fund), but it may do better as rates rise, and it has no interest rate risk and no credit risk.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is offline   Reply With Quote
Old 07-27-2015, 10:08 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,455
Quote:
Originally Posted by Jpg1717 View Post
I am 53 and retired 2 months ago with a government pension. My 457 and 401 k plans are balanced at 50/50. I am using my stable value fund 2.4 % guaranteed as my bond allocation. Should I be using a Vanguard total bond index instead ? Thanks for your advice.
If I had access to a stable value fund at 2.4% I would probably leave most of my bond allocation there for now.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 07-28-2015, 04:09 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,045
2.4% is not bad, I would stick with that, no interest rate risk.
__________________
jim584672 is offline   Reply With Quote
Old 07-28-2015, 07:17 AM   #7
Recycles dryer sheets
 
Join Date: May 2015
Location: Atlanta suburbs
Posts: 348
Quote:
Originally Posted by jim584672 View Post
2.4% is not bad, I would stick with that, no interest rate risk.
+1
__________________
DEC-1982 is offline   Reply With Quote
Old 07-28-2015, 07:47 AM   #8
Recycles dryer sheets
 
Join Date: Oct 2013
Posts: 204
You are lucky to be able to get that rate. The Stable Value Fund I have most of our 401K in is yieding 1.5%. I would grab that until interest rates get above that and then consider CDs.
__________________
.................................
A life without beer is not worth living
Nunthewiser is offline   Reply With Quote
Old 07-28-2015, 08:29 AM   #9
Thinks s/he gets paid by the post
seraphim's Avatar
 
Join Date: Mar 2012
Posts: 1,492
I've used stable value funds in lieu of bonds (not completely) for the two years I've been retired. Been waiting for interest rates to rise. Once value drops and yield increases, I'll consider a rollover to bond funds. Right now, about 27% of my portfolio is in SV accounts.


Sent from my iPad using Early Retirement Forum
__________________
"Growing old is no excuse for growing up."
seraphim is offline   Reply With Quote
Old 07-28-2015, 09:56 AM   #10
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,240
I'm happy to have a stable value fund and I wish mine paid 2.4% right now. I would never intentionally give mine up. It's plodding, but never goes down. If interest rates do go up, my rate should go up rather than the value of current bonds going down. Obviously, you have to make sure your allocation to it is what you want. Yep. Stable Value rather than bonds makes me feel better. YMMV
__________________

__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Reply


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
Stable Value Funds -- Specifically, Morley Stable Value Fund CoolChange FIRE and Money 18 10-04-2014 08:58 PM
Deciding Between Intermediate Bond Fund and Stable Value Fund sengsational FIRE and Money 12 06-13-2013 09:04 PM
TIPS Or Total Bond Index If Bond Market Crashes? Marcretire FIRE and Money 2 02-05-2009 01:10 PM
Total Bond Mkt Index vs PIMCO Total Return Inst/Stable Value Dude FIRE and Money 7 04-03-2008 01:11 AM
TIPs index vs. Total Bond index kevink FIRE and Money 3 04-15-2005 05:45 AM

 

 
All times are GMT -6. The time now is 07:10 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.