Question for current retirees

[ExFlyBoy5]

Wow, I hardly see anyone here at all with pensions and SS covering all their expenses. Perhaps you were referring to someone in particular, but other than Flyboy (who posted after you did), I don't see these posts.

Even if there were a number of people like that posting, risk tolerance is a very individual matter and I would never encourage anyone to exceed their risk tolerance. I remember back in 2008, those of us who invested within our risk tolerance had a LOT of hand-holding to do with those who didn't. Unfortunately it wasn't always successful because a few members sold low, had to go back to work, and so on. To me that is tragic.

I didn't see them, either. I saw one of the first posts that said that pension/SS covered "most expenses" but I think I was the only one (to that point) that said ALL expenses were covered...and most of my assets are indeed in equities. So confused...(which isn't difficult to do!)

 

[Mulligan]

90% preferred stock mostly investment grade largely tilted in regulated utilities.
10% common stock, cash in a couple accounts, savings and elsewhere.
Cola'd pension covers over 150% of my monthly income needs.


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[foxfirev5]

Only a month and a half into retirement, I'm sitting on 40% equities / 42% bond funds / 18% cash. The 18% cash is in a stable value fund which I'll have to rollover to an IRA in a year or so. This 18% should be enough to fund my expenses for the next 6-9 years depending on when I take SS.
If I let the rest ride a rising equity glidepath of over 50% equities would be the result, even with a very low return.
Oh yeah, I forgot the pension, which amounts to about $500 per month.

 

[Corporateburnout]

Wow, I hardly see anyone here at all with pensions and SS covering all their expenses. Perhaps you were referring to someone in particular, but other than Flyboy (who posted after you did), I don't see these posts.

Even if there were a number of people like that posting, risk tolerance is a very individual matter and I would never encourage anyone to exceed their risk tolerance. I remember back in 2008, those of us who invested within our risk tolerance had a LOT of hand-holding to do with those who didn't. Unfortunately it wasn't always successful because a few members sold low, had to go back to work, and so on. To me that is tragic.

Post #5 was the post I was referring to.

Besides, I'm not advocating for a higher equity allocation and I realize that risk tolerance is an individual choice but I was just surprised to see that. That's all.

 

[Souschef]

I am about 95% in equities, but if you figure the equivalent value of SS and our pensions, our AA would be more like 55/45.

 

[SecondCor521]

Retired earlier this year at age 46.

Current allocation is 86% equities / 8% bonds / 6% cash.

No pension but plan to collect SS at age 70.

 

[audreyh1]

53% equities, no pension, SS still > a decade a way, and it won't cover much. I'm 56.

 

[wyecrabber1]

DW retired last year. I'm in OMY mode. When I finally retire SS and pensions will cover close to 90% of expenses. Could tighten our belts very easily and SS and pension could cover all well over 100% of expenses. Have over 800K in retirement savings, plans are to let that grow. Allocation is 55% stocks [index funds], 35% Bonds and 10% cash/CDs.


Having a hard time pulling the trigger, but I have definitely set a date of 18 months of leaving the rat race.

 

[Live And Learn]

Target AA 50 / 40 / 10 (Equities, Bonds, Short Term / Cash). 52. No pension. SS a long way off. When I looked at all the calculators there didn't seem to be much difference in success rates when Equities were anywhere from 35% to 70% so I sort of split the difference. I may change AA as I go along but for year 1 this was good enough for me. We'll see how I feel after the first real bad decline in the Dow.

 

[Lakedog]

Retired at 51, just turned 60 a few days ago. Pension more than covers expenses. My equity exposure varies from 30% to 100% (dirty market timer) - currently 36% equities.

 

[MichaelB]

No pension. I was at 55% equities in 2008 and learned I didn't have quite the risk tolerance I thought I had.

Ditto. We will have a modest SS pension if I wait 'til FRA, so portfolio is it for us. Currently at 45% equities, 45% fixed income, 10% cash. If international equities, especially UK and Europe, fall much more I may buy some.

 

[daylatedollarshort]

SS and pensions will cover all our age 62+ average expenses except for income taxes on RMDs. If I worked 25 hours or so a week again that would likely cover 100% of our expenses, which is what I did the first year DH was off but I've been slacking off as the years go by and we're still not living under a bridge. 10/90 stocks / bonds (including TIPS ladder), liability matching portfolio.

 

[mpeirce]

87% equities, 10% cash/CDs, 3% real estate (not counting primary residence which is paid for)

No pension. 15 years before I take SS, 6 years before DW takes SS. Of course if the economy really really craters, we can move this up some.

 

[pb4uski]

I have a question for those that are currently retired: What is your target asset allocation in your retirement portfolio? Do you also have or will you have a pension?

I'm retired and recently talked with a financial planner. He recommends that I change to a stock/bond AA of 65% / 35%. I'm just wondering what other retirees have.

Thanks in advance.

I target 60%/34%/6% equities/fixed income/cash. The cash is what we live on and it gets replenished when I rebalance. Now that I've been retired for a few years I may let the cash drift down to a lower % but with today's interest rates it isn't a big deal either way.

 

[Walt34]

We have a COLA'd pension and SS that covers our expenses and then some. The IRA and her federal TSP funds are conservative, but that lets DW sleep at night and is mostly to cover the gap if I get The Big Ache and the pension drops 30%. She won't be SS FRA for another six years and then she'll be fine financially if I'm pushing up daises. The IRA is 40/60 total stock index (10% total international) and total bond fund or a couch potato portfolio. The TSP is mostly the "G" fund, very conservative. There is also a good bit in a credit union savings account, more than I feel is necessary.

I would be more aggressive if on my own but again, this lets DW sleep at night and there is value in that.

 

[Mulligan]

We have a COLA'd pension and SS that covers our expenses and then some. The IRA and her federal TSP funds are conservative, but that lets DW sleep at night and is mostly to cover the gap if I get The Big Ache and the pension drops 30%. She won't be SS FRA for another six years and then she'll be fine financially if I'm pushing up daises. The IRA is 40/60 total stock index (10% total international) and total bond fund or a couch potato portfolio. The TSP is mostly the "G" fund, very conservative. There is also a good bit in a credit union savings account, more than I feel is necessary.

I would be more aggressive if on my own but again, this lets DW sleep at night and there is value in that.

Hmm. I suspect the additional value is in not being yelled at and blamed for any losses, too! :!


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[Walt34]

Hmm. I suspect the additional value is in not being yelled at and blamed for any losses, too! :!

Yes, well, there is that too...

 

[Mulligan]

Yes, well, there is that too...

You have to be careful with those "loss aversion" people... $10 in gains isnt worth the risk in pain of a potential dime loss.


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[rodi]

DH gets SS (18% of our budget)
We have rental income (16% of our budget.)
I will start a very small, non-cola pension at the end of this year. (6.5% of our budget)
The rest comes from our investments/nest egg.

When I start SS in another decade-ish, that will cover 21% of our budget. So - all in, we'll only have 61% of our spending covered by SS, pension, rent.

Our asset allocation is
60/40 equities/fixed&cash.

broken down further:
40% Large cap domestic
10% Small cap domestic
10% international
25% bonds
15% cash and CDs. (DH is very tied to CDs as a nervous nelly. I finally got him to roll a few IRA CDs into Wellesley.)

 

[braumeister]

DH gets SS (18% of our budget)
We have rental income (16% of our budget.)
I will start a very small, non-cola pension at the end of this year. (6.5% of our budget)
The rest comes from our investments/nest egg.

That's a nice way of looking at it.
My pension is 27% of our budget.
DW's pension is 12%.
My SS will start this year and be 20% of budget.
DW's SS will start in two years and also be 20%.
So that's 79% of our total budget which is what I meant when I said earlier it covered "most expenses."

Being the conservative type I am, a 55/40/5 allocation lets me sleep soundly.

 

[akck]

We're about 90% invested in equities and 10% cash. We'll both have pensions and SS. When all income streams come online, they'll exceed our expenses for a long period, so we'll likely keep a high equity allocation. A large allocation is in high dividend yield stocks and funds.

Oh, I'm retired and my wife will be retiring this year.

 

[Rustic23]

Currently 100% cash. When invested close to 100% equities. Like others we have COLA'd and Non-COLA'd pension and SS that more than covers all expenses. I figure the kids will end up with the IRAs.

 

[lawman3966]

"Retired" due to health issues about a year ago (age 56).

Allocation: 64/10/26 stocks/bonds/cash.
My bond-cash allocation is reversed compared to most. This arises from my hearing so many pundits warn that interest rates were bound to rise, thus sending bond prices down.

One advantage I've learned of regarding having assets in the form of a lump sum instead of a pension is eligibility for various subsidies. I'm on Obamacare, and am eligible for food stamps, and a free cell phone.

 

[SJ1_]

I have a question for those that are currently retired: What is your target asset allocation in your retirement portfolio? Do you also have or will you have a pension?

I'm retired and recently talked with a financial planner. He recommends that I change to a stock/bond AA of 65% / 35%. I'm just wondering what other retirees have.

Thanks in advance.

30% stocks
70% mostly CD's; bonds in vanguard wellesley

I have a small pension and rentals

 

[trapperjohn]

For the OP do you have a pension?

Yes, I have a pretty good non-COLA pension. I'll also start taking SS at 62 in 2 years. SS and pension together will cover 100% of expenses.

I understand that AA is highly connected to risk tolerance. I only initially asked the questions to get a sense of what a "typical" retiree is already doing. I know there's a lot of variation.

My current AA is 70/25/5 equities/bonds/cash, but since I'm retired now, I feel I should get more conservative. Up to now, I've been very aggressive and had anywhere from 70% to 90% stocks.

The FP suggested 65/35 equities/bonds. It appears that the majority (not all, but many) seem to have AA that are around what the FP is suggesting. That probably surprises nobody.