Question for current retirees

[hesperus]

Retired at 52, 5 years ago. Not collecting pension or SS yet. Will wait to 70 since we have much more cash flow then we need for expenses from portfolio. Thus, I keep it heavier in equities.

Current allocation is

72% stocks
22% bonds
6% cash

 

[Hermit]

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.

55% stocks, 36% bonds, 9% cash.

Basic living is covered by pension and the late DW's SS. All expenses will be covered at 70 in 3.5 years when I move to my SS.

In addition, I have ~17% of total total investments in bank accounts with half designated for house building/living funds and the other half for a charity project. The plan is to take the half for charity out as RMDs at 70.5 each year until the commitment is covered so it will impact investment allocations/rebalancing.

 

[Cobra9777]

Retired 3 years ago at 52. Target AA is in my signature. Actual is currently 50/30/17/3. Equities are 15% international and tilted to high-dividend on the domestic side. Bonds include a healthy dose of high-yield corporate. Real estate consists of two rental houses and a REIT ETF.

DW and I have pensions that cover 55-60% of current spending. One pension is non-COLA however, so that percentage is expected to drop over time. Rental income and taxable dividends cover the rest, unless we have some large non-recurring expenditure. Withdrawal rate is typically very low (0-1%). We'll likely delay SS until 70. Along with RMDs, income will far exceed expenses at that point.

Main purpose of the portfolio is to protect against inflation, longevity, and LTC. In all likelihood, the kids will make out like bandits.

AA by account (touchable/untouchable) is purely a function of tax efficiency.

 

[mpeirce]

Do any of you really early retirees who can't tap into a pension, SS, or an IRA, have different AAs for currently untouchable (or very nearly so) assets than you do for your current, taxable portions?

It's one large portfolio to me. I don't really care if the assets are in IRAs or other accounts really (sure, I give some weight to the fact that certain taxes are different in/out of tax deferred accounts).

And the IRA isn't completely untouchable. DW can access her's if we needed to. I can in about 5 years. Don't really plan on it until RMDs kick in, and at that point it's simply shuffling money from one account to another (and of course paying taxes as this happens).

 

[Sue J]

DH's COLAed pension provides 118% of our expenses. It's 100% to me as the survivor. At 65 or 66 I will start SS which will add another 30% of our expenses. Total income will be close to 150% of expenses. We have a fairly low cost of living and don't need to withdraw anything from the assets, for now. We do take money out for major home improvements, etc.

Up until last month our AA was 14/4/82 with most of the cash being PenFed CDs at 3% and 5%.

Last month I inherited half of my Dad's IRA which is 14/81/5 with the 81% in high yield (high risk) bond funds. I will be moving the inherited IRA to Vanguard Wellesley (35/65) very soon.

I'm enjoying this thread because I'm undecided about what our asset allocation should be when I'm managing the new total sum. I'm reading and learning. I've always been very conservative (lots of CDs and cash) so I'm in a transition phase.

Dad's nice monthly dividends on his high risk bond funds sure are attractive. But then there's that one that went under a few years ago and he lost a small chunk of money.

So I guess my allocation is 33% reading/33% learning/33% thinking.

 

[ExFlyBoy5]

Interesting read that kind of dovetails into this thread.
Forbes Welcome

Well, from reading the responses here, I couldn't disagree with the author more. I think what he was *trying* to say was, "it's best to diversify" but it took him 2 pages to do so...

 

[racy]

Retired 3 yrs ago at 60. No pension.
Equities - 50% (20% of which is International)
Bonds - 50% (45% of which is short-term investment grade)

 

[JOHNNIE36]

I'm jumping in to add my two cents worth. In my 28th year of retirement and will turn 80 in September. I have a non-COLA'd pension plus social security that has covered my monthly expenses since I retired in 1988. Company also paid monthly equivalent of SS until I reached 62 and then reduced pension by that amount. Fidelity managed everything for my company until I left them in 2014 and moved all investments to Vanguard. I'm in Vanguard Wellesley (VWIAX and VWINX). Target allocation is 30/65/5 and actually is 35/65 as we speak. We just received the quarterly dividend which gives us a 2.95% return based only on the dividend. I did a calculation some time back and I figure Wellesley has returned about 7.5% overall since I joined the fund. I was in a lot of CD's until the bottom fell out, got sick of that and moved everything into Wellesley. I'm happy.

 

[523HRR]

Retired at 49 four years ago; now 53. DW and I both have DB pensions that will commence at age 60 which will more than cover total household expenses/taxes.

80% Equities
10% Bonds
10% Cash (5+ years expenses)

 

[MBSC]

Retired at age 46 two years ago and LBYM in a low COL area. Only pension will be SS.

25% Equities - Qualified dividends cover routine and amortized expenses and div growth is exceeding inflation.
75% Fixed Income - mostly 401k Stable Value Fund plus some individual 'AA' rated corporate bonds and a 5yr 3.5% MYGA.