I'm seeking some thoughts on how to handle deferred compensation in my asset allocation. Some background:
My question is since this is a guaranteed rate should I treat it as a bond in my asset allocation or should I exclude it completely? I'm working towards a 50/50 allocation over the next few years.
- I'm recently retired and have about 2 years cash on hand for expenses.
- I've excluded cash from the allocation.
- Deferred compensation is currently about 18% of my over all invested money.
- My deferred compensation consists of 4 guaranteed interest rate funds that comes to a 6.75% blended rate.
- I start to draw down from this asset June of 2020 over 11 years unless there is a change of control and then I receive a lump sum and all the tax "fun" that comes with it.
Asset allocation with deferred comp as a bond is 53.4% stock and 46.6% bonds
Asset allocation with out deferred comp is 61.8% stock and 38.2% bond