What percentage of your wealth is in a safe fund such as bonds or cash?

This thread made me look. Fixed income and cash sit at 49.54%

We originally aimed for a 40/60 allocation. That was based on having a set $$ amount in fixed income that let DW sleep at night.

We still have that same $$ amount in fixed income but since I still work part time, the EQ portion has grown. I'm comfortable with 50/50 and DW says as long as we still have that amount in FI, she is happy with it.
 
Unless the bonds are short duration I don't know that I would count them as "safe" funds.

JMHO
 
About 35% between bonds and cash. Virtually all is now in Tbilis for taxable accounts and 5 year laddered CDs in IRAs. Negligible bonds.

The yield pickup on longer term bonds doesn’t seem worth the risk to me. Although I’ve thought of putting 5%-10% into long term zeros in the IRA in case we really have a meltdown and rates go negative.
 
I’m about 35% bonds, with enough cash to last perhaps 2 years. I’m wondering if this might be a bit too conservative.
 
If your AA feels too conservative, it seems like a dangerous time to make large increases in your equity position.....at least that’s how I feel.
 
I keep 1.5 yrs expenses in savings. Dividends provide the other 0.5 yr of expense annually. Then I keep the lesser of 40% or 11x expenses in fixed income, so a minimum of 13 yrs expenses in cash and fixed income. Right now 11x expenses is less than 40% of my investable assets.
 
50% stock index funds (15% of that Intl)
10% bond index
15% TIAA Real Estate
25% TIAA Traditional (stable value returning 3.25%)

I consider the last two as 'non-market' and they would cover 12-14 years of RMDs.

No debt.
 
Mostly Dividend Stocks

3% cash, 97% high quality dividend stocks produce 25% more than my annual expenses. SSA provides another 35% on top of that, so I’m comfortable about getting through any market downturn.
 
Depends what you call “safe”....


We “oversaved” to minimize risk, so we have 35% in laddered CDs, 30% in paid-off rental properties, 10% in bonds , 5% in international index, and the rest in S&P index.

Rentals produced $34k in cash flow in 2019. I also work about 200 hours per year as a handyman at $40/hour...mainly for “blow that dough” money.
 
Currently, I have a little less than 30% of my retirement portfolio in cash or fixed income. I have 3 years of withdrawals for income covered by cash, CDs, and ultra short term bond funds.

Overall, my dividends and interest more than covers my withdrawals. I have never had to sell anything to cover a withdrawal in retirement. This will change when I have to start withdrawals to cover my RMD. Until about a year and a half ago I was 100% in equities.
 
I'm retired and 50/50. The '08-'09 financial crisis taught me that this is my comfort level. I had more stocks prior to that time and although all turned out well (because I stayed the course and rebalanced as equities fell) it was a bit too nerve wracking for me with a higher equity level. I hold between one and two years in money market funds which I've included in my 50% bond portion.
 
Milkman said:
Currently, I have a little less than 30% of my retirement portfolio in cash or fixed income. I have 3 years of withdrawals for income covered by cash, CDs, and ultra short term bond funds.

Overall, my dividends and interest more than covers my withdrawals. I have never had to sell anything to cover a withdrawal in retirement. This will change when I have to start withdrawals to cover my RMD. Until about a year and a half ago I was 100% in equities.
Click to expand...

You have certainly won the race my friend. To never draw down principle until RMD to me is probably best case scenario for any young dreamer!

Everytime another fixed income stream comes online, technically one could INCREASE equity exposure... Not only do you get a raise...you get more risk tolerance with the additional guaranteed income. With a married couple who has pension(s) this could happen 2x or more!

So if I have $60k of SS coming online next year, I could technically expose myself to 60k more of equities... IF you never needed the RMD to begin with.
 
When I retired at 57 I aimed at 50:50. Now at almost 72 I'm letting the equities drift up. Started SS at 70, between that and RMDs we are at about 150-200% of are cash flow needs. House is paid off and we are in a low cost of living area. After 2 years of RMDs we have more net assets than when we started.

Life is good.
 
We keep more than 10 years of expenses in cash/CDs. I truly want to weather any significant economic downturns with as little pain as possible. I'm happy to forego possibly higher earnings on these funds in exchange for the peace of mind cash/CDs provide us.
 
Last edited:
It is at the point of not being an important issue for us anymore. But a quick eyeball at the spreadsheet says somewhere well in excess of 50% cash or equivalent. I figure that anything that happens financially which would affect our ability to survive would also be the financial ruin of the country. We have prepared as best as we possibly can. So all we can do now is :popcorn:



Cheers!
 
6 months of cash and 5 years of bonds at current spending levels, which could be trimmed.
 
Interesting how different the responses were pre COVID19 DOW and post.
 
You must log in or register to reply here.

Similar threads

T
All Your Worth (Book Review)
Replies
5
Views
673
walkinwood
walkinwood
R
Seeking Advice - for retiring at 52.5
2
Replies
44
Views
5K
LateToFIRE
L
B
Early-30s couple just beginning our FIRE journey...looking for basic advice!
Replies
5
Views
728
beef_stroganoff
B
R
What percent of net worth is ideal for home?
2 3 4
Replies
91
Views
10K
REWahoo
REWahoo
S
32YO, and I'm so close I can taste it.
Replies
19
Views
2K
Badger
Badger

Latest posts

Back
Top Bottom