Next year at 56 I'll retire with about $80,000 to rollover into an IRA. I'm 80% invested into stock funds now (zero in bonds) and would prefer not to move that money. I get the idea that about a 30% position in bonds would be a good idea from what I read. Q? Does this general idea make sense and if it does, what bonds would be a good idea. I like funds but bond funds don't seem to be doing well. I don't want to risk the principal.
Hope you can get more detail from other posts, but I've read just last week, I think in Forbes, that it is worth it to own individual bonds vs. a fund if the amount is $50k or above. You can then control timings much better, etc. Good luck.....
Rather than fool with bonds or bond funds, why not just put together a ladder of FDIC-insured CDs.intercst
Money not needed for >5 years need to be in stocks. Money less than 5 years need to be in cash equivalants. In your situation, money that you'd be spending in retirement over the next 5 years should be in a money market fund, or if you want an extra 1/2 to 1% yield, ladder some CDs (which would be FDIC insured through your bank).Definitely against bond funds (or any fund). Good quality bonds might get you an extra 1-2% points above a CD, but there not FDIC insured. Considering this would be money needed within a few years, the chance of loosing it is not worth it.JLC
Definitely against bond funds (or any fund). Good quality bonds might get you an extra 1-2% points above a CD, but there not FDIC insured. Considering this would be money needed within a few years, the chance of loosing it is not worth it.I have to agree. If you feel it is necessary, go with the cd. IMHO, you are good staying in stocks, however at your age.
Current best CD rates at bankrate.com are 7.60%APY for 5-yr CD. 7.35%APY for 1-yr CD.http://www.bankrate.com/brm/rate/high_ratehome.aspCorrect me if I'm wrong, anybody, but this is significantly higher than current return on comparable-length treasury notes.Tom
You should always get a higher rate on any type of bond vs. the risk-free T-bill rate. Non-treasury bonds must pay more for issuer and inflation risk.
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