Ask Terry Questions Asset Allocation

Asset Allocation

By Terry Savage on December 23, 2019 | Financial Planning / Retirement


I am 55 and plan to retire in 2 1/2 years. I will have a pension through TRS for about 80,000 per year. Currently, I have approximately $640,000 invested in 403b/IRA in S&P 500. What is the appropriate asset allocation for me? Also, how do I actually start drawing on the money in my 403b and IRA?

Thanks and Merry Christmas

Terry Says

This is the tough question of the century! You really need to do some serious financial planning if you think you can retire at age 58. It all depends on how you plan to live, whether you get your FULL pension at that age (vs getting only a portion) and how long you think you’ll live! To get some rough answers on that, go to and click on calculators and then do the “Ballpark Estimate.” I think you’ll be surprised to see how much money it will cost you if you live to your actuarial age of about 87.

Then don’t forget the impact of inflation. If we have only 3% inflation –the historical long term rate — the spending power of your $80,000/year pension will be cut in HALF in 25 years — at age 84! And what about healthcare expenses. That could become a huge drain on your fixed income. So use that online calculator. And then go to and seek out a FEE-ONLY FIDUCIARY FINACIAL PLANNER for a more specific planning session.

PS Don’t forget the impact of a bear market on your stock portfolio. Eventually, there will be one!

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