Personally, I don't think ANY significant
percentage of my retirement portfolio should be in bonds.
Not exact matches
It seems like much
of the
retirement planning advice out there focuses on distribution rates, the
percentage of income to replace, asset allocation changes or a determination
of how much risk is suitable for a retiree's
portfolio without ever considering actual living expenses or spending needs.
It's typically more important the closer you are to
retirement when you may rebalance to increase the
percentage of fixed - income assets in your
portfolio.
They define initial withdrawal rate as a
percentage of portfolio balance at
retirement, escalated by inflation each year thereafter.
They run 10,000 Monte Carlo simulations for each
of many initial withdrawal rate scenarios, with probability
of success defined as the
percentage of runs not exhausting the
portfolio before the end
of a specified
retirement period.
If you're saving for
retirement and want a quick idea
of what
percentage of your
portfolio should be in stocks, subtract your age from 120.
For people nearing
retirement, the recommended
percentage of bonds in a
portfolio varies widely, ranging from as little as 15 % to as much as 60 %.
One
of the things that we pay a lot
of attention to with our clients at Rebalance IRA is what
percentage in
retirement you need in order to take out
of your
portfolio, in most cases, the
percentage of withdrawal from an account.
While a good rule
of thumb is to subtract your age from 110 to determine the
percentage of your
portfolio to hold in stocks, you can also take a risk tolerance quiz to identify the personalized allocation that will put you on the path toward a comfortable
retirement.
When getting close to
retirement age, I would consider increasing the
percentage of bonds in the
portfolio.
Bengen encourages retirees to keep an eye on their «current withdrawal rate,» which is the annual drawdown as a
percentage of a
portfolio's value today (as opposed to its initial value at the time
of retirement).
For years, investment firms and professionals have advocated the need to include a small
percentage of high risk and potentially high reward assets into your
retirement portfolio.
One issue with the 4 % rule, and variants that use a different
percentage, is that the
retirement payout is specified as a
percentage of the value
of the
portfolio as
of the
retirement date.
If you're close to
retirement or risk averse, simply make sure bonds, cash, and gics comprise a large
percentage of your
portfolio.
A well balanced
retirement portfolio may include some moderate
percentage of bonds as part
of an overall investment strategy to generate income or receive significant tax benefits.
Later, as you move closer to
retirement and the number
of future tosses declines, it's prudent to scale back the short - term risk
of loss by gradually increasing the
percentage of bonds held in the
portfolio.
If you have less time to go until
retirement, your
portfolio will have way less stocks in it, opting instead for a larger
percentage of bonds.