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What percentage of your wealth is in a safe fund such as bonds or cash?
Old 02-10-2020, 04:39 PM   #1
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What percentage of your wealth is in a safe fund such as bonds or cash?

For retirees only?
Just wondering......Right now I keep about 25% or 3 years worth of retirement income in safe funds because I figure that's what I would need to ride out a market downturn. I then have another 20% in a 2025 target date fund which, as you know is diversified. The rest (55%) I keep in an SP500 index fund.

FYI....I have a considerable amount of my wealth is in my home (paid for and worth about $800K). In a horrible situation (a LONG market downturn) I could access the equity on my home if I absolutely had to.

What say you guys?
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Old 02-10-2020, 04:54 PM   #2
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I go with a 50/50 ratio altho in the past I have let it drift higher and lower. Part of the 50% fixed is the cash I keep in a local bank that has all the bills on automatic payment.
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Old 02-10-2020, 04:56 PM   #3
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Quote:
Originally Posted by Olderschool View Post
For retirees only?


What say you guys?
Just FYI, lots of ladies here as well.

We keep about 2 years in CD's and another ~2 in TIPS. That's our ride out the storm stash. We also have an agreed to list of discretionary stuff that goes on the chopping block should we experience a lost decade, etc.
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Old 02-10-2020, 05:01 PM   #4
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OK I'll bite. 25 years in safe funds to cover essentially expenses at a 3-4% inflation rate. The rest is in broad index equity funds. The percentages don't matter to me. But the placement does. I live on the tIRA's (income)and let the Roth's (growth equity) ride.

To me homes don't count. I live in one and the other is a lakefront vacation. Both are lifestyle choices that provide no income.

Best wishes. Also I make old school look like rocket science.
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Old 02-10-2020, 05:04 PM   #5
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Were about 50-50 not counting real estate holdings. We have 7-8 years in easily accessible bond funds and flexible income annuities that are past any penalty date. We also have CDs that mature over the next couple of years. Dividends, interest and a small non cola pension pay most of the bills. Life is good.
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Old 02-10-2020, 05:13 PM   #6
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35% bonds. I'm going to take another look at that, since I've heard a number of people talk about how 60/40 (or in my case 65/35) might not be optimal. There's a thread on here somewhere that I need to read...
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Old 02-10-2020, 05:15 PM   #7
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Old 02-10-2020, 05:17 PM   #8
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Twenty percent for me also
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Old 02-10-2020, 05:18 PM   #9
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So my stocks pay dividends as a group, which adds a chunk of money every year.
This means that my stash of cash which would last 4 years is stretched out to 5 years.

Any Recession/Depression longer than that, and I'll to cut back...
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Old 02-10-2020, 05:31 PM   #10
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Old 02-10-2020, 05:48 PM   #11
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50/50 with enough cash equivalents to cover seven years of expenses. That happens to line up with my 70th birthday when the plan says my SS starts. At that point I'll cut out a couple years of cash and probably up my allocation to 70/30.
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Old 02-10-2020, 05:48 PM   #12
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42% equities, everything else is pretty safe. I don't base it on years, only percentage. I can also cut way back on spending if needed due to over half of my yearly spending being discretionary.
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Old 02-10-2020, 06:01 PM   #13
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1% in my checking account. The rest is 95% in equities and 4% in tax free munis.
My main cushion is 2 SS and 2 pensions.
This does not count DW's separate stash. For many reasons, especially in a community property state, we have kept our stuff separate.
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Old 02-10-2020, 06:08 PM   #14
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About 30 pct
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Old 02-10-2020, 06:16 PM   #15
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I have set up the taxable part of my portfolio to generate enough dividends to pay my expenses. Starting this year, however, I will no longer rely on the stock fund within the taxable account to supplement the bond fund's income. I did this because the stock fund was generating way too much in cap gain distributions and denying me an ACA subsidy. So, I moved it to a stock index fund which invests in the same general stocks (large cap). I won't have as much in dividends but in return I have significantly lowered my expenses via a nice, juicy ACA subsidy.


The taxable part still has about 65% bonds. I also have a rollover tIRA which has about 56% bonds. The bond side has grown mostly through rebalancing - taking some of the gains on the stock side and moving them to the bond side.
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Old 02-10-2020, 06:26 PM   #16
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We are still working, but currently have about two months of expenses in our checking accounts, and about two years of expenses in our savings account (estimates are after a pension once we retire).

My investments are roughly 47% stocks (VTSAX in my Roth) and 53% bonds (VBTLX in our traditional IRA's, and VWITX in my taxable account).

I had been 60/40 for many years, but recently reorganized my investments for less of a wild ride now that we are nearing retirement. At this point I'm more concerned about not losing money than I am about large gains.
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Old 02-10-2020, 06:30 PM   #17
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We have 27.1% in 5-year CDs... which we view as a bond-substitute.. in tIRAs, 1.3% in a whole-life CSV and 10.5% in an investment-grade preferred stock portfolio that pays about 5.6%.

So that 39% is my safe money ballast.... the other 61% is in equities... 42% in domestic equities and 19% in foreign equities.
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Old 02-10-2020, 07:17 PM   #18
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We have about 15% in cash/ money market. 40% in equities

45% in real estate - LLC commercial /residential real estate

Monthly Pension in place.....SS to start later in 2020 at FRA
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Old 02-10-2020, 07:38 PM   #19
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3% in Vanguard Short-term Treasury (VSBSX)
22% in Vanguard Short-term Tax Exempt Muni (VWSUX)
total
25% in cash-like assets covers 9 years of spending our full budget with all vacations included.

75% in equity, split 75/25 into Total US and Total International.
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Old 02-10-2020, 07:53 PM   #20
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At age 70 now, I have sufficient income from annuities and SS to more than cover my monthly expenses.
Nonetheless, I have 20% of my investment portfolio in TIAA Traditional, 65% in stock funds and 15% in TIAA Real Estate Account.
Cheers...
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