What is your Asset Allocation if you have no pension?

[Katsmeow]

About 55/45, can go down to 50/50

 

[rrppve]

I’m 55/45 with a large chunk of CDs in the 45
FIREd 6 years ago at 53
Life is good

 

[DrRoy]

I have a pension covering 20% of spending and 58/42 on the rest.

 

[mrfeh]

60/40

 

[sadie1958]

75/20/5

I have a long retirement ahead of me and need to stay mostly in equities to keep up with inflation but have a cash buffer to help avoid selling stocks in a big downturn.

Same.

 

[levindb]

72/25/3 ages 69 and 67
Our age 70 SSA and rental income (2 properties) will meet our basic spending needs...and we travel 8-9 months per year with earnings from our assets.

 

[LRDave]

We will have my micro-pension and DW's modest COLA'd pension. My asset allocation is about 50/42/8.

The question I wonder is: Would my asset allocation be any different if we did not have the pensions?

 

[cooch96]

83/1/16. My plan is to go 100% equities plus 3years of cash once I leave megacorp. I don’t like bonds, but will start trading into them if they start yielding high single digits.

 

[eytonxav]

40/57/3

 

[Ed_The_Gypsy]

We live off our SS (family maximum). I get about $480/mo in pensions. Our Roths are about 60/40. We draw a little from them.
P.S., we pay no income taxes.

 

[street]

I would love to know since I am in the same boat.

No. I wouldn't change my AA of 75/15/10. No pension.

 

[gamboolman]

Not retired yet, but planning to go in 2020.

We are planning to take the Lump Sum and decline the pension, as pension is non-COLA. We are scared of inflation.

Current AA is 40/47/13, equities, bonds, cash

Aiming to have the AA to ~45/45/10 ish...by the time we pull the plug and move monies from megaoil savings to our Vanguard account.

 

[pb4uski]

I would love to know since I am in the same boat.

I have a small pension but target 65/35... if I didn't have a pension I'm not sure if it would be any different.

However, I was curious about what FIRECalc says. I created a scenario where a 65 yo retiree had $1m and a 30 year time horizon and I solved for safe spending at a 95.8% success rate with a 60/40 portfolio of $40,249.

Now, the retiree decides to use $200k to buy a SPIA, leaving $800k invested.

The SPIA for a 65 yo male in FL would pay $1,050/month or $12,600/year. If spending were the same, then only $27,649 would need to come from the portfolio. In order to generate $27,649 from the portfolio, then only between 16-17% needs to be in equities.

Now, instead of a SPIA, let's say that the retiree has $800k and a choice between a $200k lump sum or $12,600/year pension benefit. The pension allows the retiree to have a much lower equity allocation with the same degree of success and annual spending.

I was surprised that the equity allocation with the same degree of success and spending was so different... 60% with no pension and 17-18% with a pension (SPIA).

Now that said, most lump sums are much lower than a SPIA equivalent so that may be twisting the result to some degree.

 

[Mo Money]

80/20, age 58, retired almost 5 years.

 

[finster869]

25% stocks; 25% gold; 25% bonds; 25% cash

 

[tdv2]

58/42

 

[jkern]

40/40/20

Age 62, no pension, just started SS.

 

[Which Roger]

The "right" answer can vary a lot, depending upon (among other things) the extent to which one's pension and SS will cover expenses. If they cover all or nearly all expenses, asset allocation isn't nearly as important as it is for someone will require a high withdrawal rate to meet expenses

 

[CountryBoy]

70/20/10 with the 10 equal to 3-4 years of expenses... ER'd 4 years ago, another 4 years before I plan to take SS.



And the more posts I read on this thread, the more I worry that 70% in equities is too high. Ulp...

 

[enjoyinglife102]

30/69/1. Missing potential equity returns that wouldn't significantly make my life better is fine with me. Missing or delaying a fun, active life waiting for a stock market recovery is not.

 

[aja8888]

30/69/1. Missing potential equity returns that wouldn't significantly make my life better is fine with me. Missing or delaying a fun, active life waiting for a stock market recovery is not.

That's about where I am but with more cash and CD's than bonds. But I am going on 77 with a disabled DW. No debt, no pension, but a good amount of SS. SS covers about 2/3 of annual spending.

 

[jebmke]

We started retirement 12 years ago at 40/60 facing 10 years with no pension and no SS. I have never paid CG tax since I harvested massive losses in 2008-09. Those are gone and my pension and SS have started. So I plan to not re-balance on the upside until I get to at least 70/30.

 

[unclemick]

Up to ER pretty much 60/40. Early ER, 1993 to 2006 still pretty much 60/40. After age 62 (2006) went close to full auto Target Retirement. Let The computers re balance. Ballpark at age 76 going on 77 about 40/60.

heh heh heh - thoughts of buying 'a few good stocks' with excess RMD money but I haven't picked winners in the playoffs/wildcard rounds yet so my confidence level is down. Sooo - ? maybe index on and 'blow that dough' while above ground.

P.S. Non - cola 11k pension at 55 (1998) and SS at 62 (2006).

 

[24601NoMore]

That's about where I am but with more cash and CD's than bonds. But I am going on 77 with a disabled DW. No debt, no pension, but a good amount of SS. SS covers about 2/3 of annual spending.

Same here, also - but significantly younger @ mid 50s.

I also am more than happy to trade potentially higher equity returns that I don't "need" to be able to sleep better at night. But to determine that, I had to project out income and expense year by year through age 95, also (with a good buffer)..that's the only way IMHO to determine what one truly "needs"..and of course, any assumptions can and will go out the window at any time, so contingencies are also important.

Was very confident in the "high cash (CDs)" approach a year and a half ago when CD rates were higher, but with rates dropping and bond funds likely under pressure going forward due to the current very low yield environment, it does make it a bit tougher for sure. That said, I don't have a lot of confidence in equities over the next 10 years or so, either, given the extremely high stock valuations (eg: CAPE 10, forward P/E, etc). So there's very few good options at this point, and it's pretty much a "pick your poison" time..maybe increasing international equities or dividend-paying Value stocks over the next few years is a good option..hmmm..

 

[Skyward1]

50/25/25 and plan to ER in 2 years. Bought my first bonds last year from equities and plan to stay in this range for the foreseeable future unless there is a significant market drop and then I will up the equities moderately.