Am I doing this correctly?

[Debinnov a]

I've entered my total portfolio, and I add the expected social security and then under "Your Portfolio" under "Total Market" I change the 75% in the "equities" box to 20%. Would that be the best option for someone who wants to get the most conservative results?

Or would I go into another option under portfolio and put a flat percentage of interest expected?

I want to get the most conservative results, as I will probably keep a large portion in safe/guaranteed investments and maybe a third in the market in bond/stock index funds.

Can someone assist me?

Thanks!
Deb

 

[clifp]

If you are going to be sticking most of it in CD's I'd put in what ever percentage you have in stocks say 20%. Then change the fixed income portion form long interest rates to 5 Year Treasury notes. Currently 5 year T-bills are yielding about 1.36% or about the same as you get in a 3 to 5 year CD.

Be warned that your spending will be reduced by about 15% from a more conventional approach

 

[REWahoo]

So the more conventional approach would be more like 20% cash, 20% equities and the rest bonds or bond funds? I apologize, I am just trying to sort all of this out.

I'm not sure how to define the conventional approach, but I can tell you FIRECalc (ie, history) says you'll hurt the chances of your portfolio lasting 30 years if you have less than 35% or so in equities.

This chart shows FIRECalc 30 year survival rates for equity allocations. 20% in equities results in survival rates of only 70% or so, while 35% or more moves that survival number to 90% or more.

Having too low an equity allocation increases risk, it doesn't decrease it.

 

[Debinnov a]

That makes sense! Thanks