Equity to Fixed Income Ratio
Hi Terry. My husband and I are 69 and 68. Our current equity to fixed income ratio is around 52% equity and 48% fixed income. Is it correct that it should be around 30% equity and 70% fixed based on our ages?
We have asked our financial adviser to make recommendations on lowering our equity %, but he feels we are very well balanced. My husband is hesitant to reduce our stocks because of the capital gains tax we would incur and thinks we should leave our ratio as is. I’m nervous about the markets but am not sure how much to encourage lowering our stock %. If we do reduce our stocks, should we do it very gradually?
Thank you for any help you can give us.
Terry Says
This is a tough one for me to answer without knowing how much you have in assets, how dependent you are on them for the rest of your life (vs planning to leave an estate to your children) and your own risk tolerance. And, by the way, you could each have a separate level of risk tolerance as you age. (Remember, you’re likely to outlive your spouse — just by statistics –so you have more reason to be concerned!)
My suggestion right now is a meeting with a fee-only FIDUCIARY Advisor who could review your entire situation with a new set of eyes — and perhaps make some adjustments. Here’s how to quickly find someone you can trust — even if you just have one or two meetings:
https://www.terrysavage.com/pam-krueger-wealthramp/
You can start by filling out the forms tonight! The first meeting is always free with all of Pam’s well-vetted fiduciary advisors.
