Ask Terry Questions Asset Allocation While In Retirement

Asset Allocation While In Retirement

By Terry Savage on March 11, 2020 | Financial Planning / Retirement

I listen to you on WGN and always appreciate your advice. I am 72, retired and my funds are in a Target Date fund which is invested in VITRX. The mix is 30% stocks and 70% bonds. You recently suggested 50% equity income stocks and 50% money market for someone in my situation. Do you know if the stocks in this investment are equity income? Should I replace the bonds with money market? The advisory fee is .00 and the expense ratio .09% for my current investment. Thanks so much for your help.

Terry Says

You’re in the low-cost Vanguard Target Retirement fund. It has a yield of 2.5% and a very conservative asset allocation. And that’s right where you should be — IF you understand that the price of the shares could go down if the market declines further.

But you don’t have to have ALL your money in this fund. Assuming this is inside a retirement account, you can switch 20 percent to their money market mutual fund — so that you have liquidity for those Required Minimum Distributions!

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