Yoheadden
Recycles dryer sheets
- Joined
- Jul 27, 2019
- Messages
- 419
So traditional thinking, (depending on RT), is that you have an 80/20 AA until you get closer to retirement, than shift gradually into an AA of more bonds and less stocks for a less volatile portfolio.
Recently, I was reading how ideally you want your portfolio to create an income that will cover, or at least come close to, your expenses for the year. This way you are not drawing down on your principal.
Are these two different types of strategies or is the second, just a continuation of the change in AA? If so, what types of investments make up a good income stream that would cover your annual expenses?
Also, does ERing (55 & under) change this whole way of thinking, since your funds will have to last potentially 40+ years. In which case you should keep more stocks in your AA than traditional thinking says?
I would love to hear the theories, thoughts and strategies of those that have been there and doing this. Thank you for your insight and experience.
Recently, I was reading how ideally you want your portfolio to create an income that will cover, or at least come close to, your expenses for the year. This way you are not drawing down on your principal.
Are these two different types of strategies or is the second, just a continuation of the change in AA? If so, what types of investments make up a good income stream that would cover your annual expenses?
Also, does ERing (55 & under) change this whole way of thinking, since your funds will have to last potentially 40+ years. In which case you should keep more stocks in your AA than traditional thinking says?
I would love to hear the theories, thoughts and strategies of those that have been there and doing this. Thank you for your insight and experience.