San Diego Housing Market News and Analysis
Bond/Equity Mix During Retirement
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Submitted by svelte on January 19, 2018 - 1:51pm
Starting to lay plans for my distant retirement so I've been doing a lot of reading.
I've noticed most advisors recommend somewhere between a 40/60 to 60/40 mix bond/equity after one retires.
The bond portion, from what I've read, is to give a retiree a stable base in case the equities fall sharply during a downturn.
The equities portion is to allow a retiree to keep pace with inflation, in case s/he lives 20-30 or more years.
OK, makes sense so far.
Here is what confuses me: for the 401K portion of my retirement, the govt has a required minimum withdrawal (RMD) somewhere in the 4% range, dependent on the outcome of running an equation.
If I plan on only withdrawing the minimum each year, that means a 40% bond mix would get me through roughly a 10 year downturn.
That sounds excessive....am I looking at it right?
If not, what is the thinking of keeping 40-60% of one's portfolio in bonds?
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