Question for current retirees

[trapperjohn]

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.

[braumeister]

55% equities (40 domestic, 15 international)
40% bonds
5% cash

And I also have a pension that covers most expenses.

[RobbieB]

63% equities (70% large cap dividend/income, 30% growth)
25% muni bonds, 50-50 bonds and bond funds
12% cash

SS income

[KM]

US Equities - 40%+-
Int'l Equities - 10%+-
Bonds - 35%+-
Cash/Stable Value - 15%+-

We both have a pension that jointly cover 50%-75% of our annual expenses, depending on how much we spend on travel each year. But the pensions aren't COLA'd. Low inflation has been our friend these past few years.

(When I turn 75 my pension almost doubles and then grows at 4% annually, tho, so that's my long-term care insurance :-P)

[roninop]

DW has a pension and SS. I plan to take SS at 62 in a little less than 2 years which will cover all expenses excluding, fun, travel, and adventure.

50 % Equities ( < 10 % International)
37 % Bonds
13 % Cash

Over the next 5 years our plan is to reduce the equities to 35 - 40% for the long haul.

[Whisper66]

Retired last year at 55. Have been investing for ~30 yrs. Now, I generally buy and hold assets but look for significant opportunities to optimize returns a bit. Our target asset allocation is a range:
Equities = 65%min, 90% max (focusing on dividend paying assets)
Fixed = remainder
When market reaches higher levels, will tend to sell off some equities. When market appears low, will tend to buy some dividend paying equities. We recognize that this is an aggressive strategy. We are comfortable with it because (a) we have extra assets (so can hold equities during downturns and don't need to sell at low points) and (b) have leeway to cut expenses if needed (so can take a hit in the portfolio until market comes back).

Currently we are at 78% equities. We were recently at 86% before selling some stock that had reached a reasonably high level. If market stays relatively high valued, we will likely make another step change (equity sale) early next year when I'm willing to take the tax hit. If market takes a big drop, will sit on the current equities, take the dividends and fill any remaining money needs from the fixed assets until the market rebounds.

Work Pension: Took my work pension as a lump sum so it's now just included in my asset allocation.
Social Security (pension) - My wife and I plan to take SS at 62.

I like Boggleheads wiki on AA. Table 2 provides an idea of how much market volatility you should probably plan for given an AA. For example, a 65% equities portfolio should consider a possible loss of 25-30%. 90% equities up to 40%. So your level of risk tolerance is important.

[REWahoo]

Retied 11 years, 40-45% equities, 45-50% bonds, 10% CDs/cash. No pension. I was at 55% equities in 2008 and learned I didn't have quite the risk tolerance I thought I had.

[W2R]

This is my 7th year of retirement.

(1) I have a tiny pension which gives me a mid three figures amount deposited in my bank account each month. This makes up 16.8% of my income

(2) I also started SS in 2013, but didn't change my AA due to that. This makes up 26.8% of my income.

(3) The remaining 56.4% of my income is from investment dividends.

My asset allocation:

55% FIXED (49.5% bond funds and 5.5% cash)
45% EQUITIES (all in equity funds)

[Corporateburnout]

I'm surprised to see people with pensions and SS covering all their expenses with 50% or less in equities.

We're 50/40/10 Stocks/Bonds/Cash with no pension and SS in a couple of years.

For the OP do you have a pension?

[Taxman59]

Retired last year @ 56. Our pension was terminated in 2008, and I invested the lump sum in an annuity that grows at 7% compounded daily for my "pension". My AA is 76% domestic equities, 9% international equities 7% bonds and 8% cash. With the annuity and SS kicking in at 70, they will cover about 95% of my needs, so I am investing for long term growth.

[Major Tom]

60% Equities (of which ~20% is international)
37% Bonds
3% Cash

FYI, I will have SS coming online in 10 years or more.
No pension.

I don't have strict rules or plans for rebalancing, though I probably wouldn't want the equities to go more than ~ ±10% from their target. In the 5 years since I began withdrawals, I have sold equities on 2 separate occasions with the purpose of raising capital, and this also had the effect of moderating my equity portion, in a time when the markets were rising.

At some point in the future, I will most likely find cause to effect a transaction with the sole purpose of rebalancing.

[marko]

50% equities, 40% bonds 10% cash-ish
Age 64 (today!)
SS
No pension

[Corporateburnout]

Quote:

Originally Posted by marko 50% equities, 40% bonds 10% cash-ish Age 64 (today!) SS No pension

Happy Birthday

[ExFlyBoy5]

I too have a pension that covers all expenses and then some.

Majority of investments sit in Vanguard (Wellington) which is 65/34
I also have my TSP (about 20% of my total assets) which still sits in the L2030 fund which is allocated G Fund: 31%, C Fund: 34%, I Fund: 19% and S Fund: 10%

I still have a rental property that I am considering getting rid of. If so, the proceeds would be dumped into Wellington.

I also dabble a little w/ a brokerage account (less than 5% of assets) but that has tapered off recently. Takes too much time and research when the Wellington is already figured out for me.

I don't see that I will change allocations at all...at least not for about 20 years.

[marko]

Quote:

Originally Posted by Corporateburnout Happy Birthday

Thanks!

[LuckyDog]

We are 61 years old and in the 8th year of retirement and are currently covering expenses with pension and savings.

Currently have 2 buckets:

1. The investment bucket is 65% of the total portfolio and the asset allocation is about 40% stocks, 60% fixed come. We will not touch the investment portfolio until RMD's kick in.

2. The cash bucket (cd's, MM, savings account) is about 35 % of the total portfolio. This money is slated for emergencies, other expenses like new cars and to bridge the gap until we go to SS at age 66.

[Danmar]

Quote:

Originally Posted by Corporateburnout I'm surprised to see people with pensions and SS covering all their expenses with 50% or less in equities. We're 50/40/10 Stocks/Bonds/Cash with no pension and SS in a couple of years. For the OP do you have a pension?

Agree. Seems overly conservative to me. I am at the other end of the risk spectrum. 100% equities but my pension covers most of our fixed expenses. If I capitalize the pension I am at 60:40 E to FI. Also keep a large cash cushion and all equities are large cap div payers. Works for me but don't recommend for others with a lower risk tolerance.

[DEC-1982]

Target Allocation Stock/Bond/Cash - 65/30/5

Two pensions, both are small.

[UpAnchor]

Quote:

Originally Posted by marko 50% equities, 40% bonds 10% cash-ish Age 64 (today!) SS No pension

Ditto all. (Except the 64 was a few months back and holding off on SS.)

[W2R]

Quote:

Originally Posted by Corporateburnout I'm surprised to see people with pensions and SS covering all their expenses with 50% or less in equities.

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.