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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75776  
Subject: Re: opinions on this allocation strategy Date: 2/25/2008 11:41 AM
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Your other post mentioned you are 56. Typically it is recommended that you make your investment plans as if you or your spouse will live to be 90 or more often 95. This gives you an investment time frame as long as 35 to 40 years.

You might try doing a reality check on your asset allocation by making a spreadsheet breaking your retirement dollars out by when they will be spent and what asset allocation makes sense for that timeframe.

For example numbers your portfolio might look something like;

(I just quickly made up these numbers, they may not be realistic.)

a) Early retirement, age 60 to 64
$50,000 (plus ongoing savings)
Time frame 4 to 9 years;
80% bonds/20% stocks

b) normal active retirement, age 65 to 70
$150,000:
Time frame 9 to 14 years;
60% stocks/40% bonds

c) Mid-retirement, age 71 to 80
$250,000;
Time frame 15 to 24 years;
80%stocks/20% bonds

d) Late retirement, over age 80
$100:000;
Time frame 25 years or more.
100% stocks

Once you have made an intelligent estimate of how many dollars to put in each asset class for each date range, you need to then add them back up to see if it matches your current asset allocation. If not then either the spreadsheet is incorrect or your current asset allocation is incorrect.

Greg
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