I have been retired for 2 1/2 years. I have about 1.5M with most being in stocks and mutual funds. I have a 200K in liquid assets. Do I have too much in stocks. If so, what would recommend as a good split between stocks and bonds.
Certainly that depends on what you need monthly/yearly...in former posts you might see ,that here people talk about having an amount of 1-3years in cash-similar assets....rest in stocks.Best discussions you should find in theFoolish-4 post.Being nearly 47 I retired 7 years ago...andfeel much safer having about 6 years always"away from the market"...but that is questionof mentality.Greetings from Spain!
>> I have about 1.5M with most being in stocks and mutual funds. I have a 200K in liquid assets. Do I have too much in stocks. If so, what would recommend as a good split between stocks and bonds. <<The "rule-of-thumb" had been (for a long time) that one should subtract one's age from 100, and that's how much one should have in stocks with the remainder in bonds. However, people are living longer and longer these days. So, the consensus seems to be shifting slightly towards having more stocks in one's portfolio, and for a longer period of time into retirement. IMHO, a sensible strategy might include a "reverse DRIP"- as I like to call it- get out the same way you got in; a little at a time. This may be good particularly with mutual funds. This way, the remaining money has a chance to continue to grow. I hope this helps.Eddie
JBVB: "I have been retired for 2 1/2 years. I have about 1.5M with most being in stocks and mutual funds. I have a 200K in liquid assets. Do I have too much in stocks. If so, what would recommend as a good split between stocks and bonds." I suggest that you visit The Retire Early board here at TMF, any pay special attention to posts by "intercst" and check out his Retire Early Home Page on geocities for lots of detail on this subject, especially articles related to the Efficient Frontier and Safe Withdrawal Rates.http://www.geocities.com/WallStreet/8257/reindex.html4% of 1.5MM is 60k, so your 200k is roughly 3.3x the safe withdrawal amount.Just my $0.02. Regards, JAFO
Our situations are very similar in terms of age and portfolio size, although I've been "retired" since 1987 (went back to school for my Ph.D and now teach and manage non-profits). I have most of my portfolio in stocks and little in bonds (although I cheat with investments in REITs for income). Simply, stocks have, over the long term, greatly outperfomed bonds. This has been especially true in the 90's. Instead of receiving interest payments from the bonds, "take some $$ off the table" when you periodically rebalance/sell some of your stocks.Check into REIT's -- great value and good income, IMO.Bill
Here's how I'm looking at things, for myself and for managing my mother's retirement. I'll have 5 years of living expenses in cash equivilants. The rest in stocks. I avoid bonds because if you have to sell them early, you could loose money just like stocks. Bonds aren't the safe haven they've historically been made out to be. Besides, a good money market fund can give an excellent return and the 1% point you give up is well worth the liquidity.JLC
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