Investment allocation between stocks and bonds

My husband and I are both 55 and looking over our retirement investments. What balance of stocks/bonds do you recommend for our Vanguard IRA/SEP investments? They recommend 70/30 but wanted to see if you thought different and if there is anything else to consider here.

Terry Says:  It’s not a fixed percentage that matters — and it all depends on your risk tolerance as well as your retirement plans.  Yes, you need a good percentage in equities, because over the long run stocks always beat inflation (and that may lurk around the corner).   But there are ways — and there are ways to get stock market exposure.  An equity-income fund might give you more peace of mind than a S&P 500 stock fund.  The equity-income fund will invest in some short-term debt, as well as dividend paying stocks, and some short term bonds.  But you still get stock exposure.   And maybe you need some international stock exposure.  And I personally think it is a bit risky to invest in bonds right now, so my “fixed income” portion would lean heavily to a money market fund — even though they earn absolutely nothing in the way of interest!!

So the thing to do is ask whoever “they” is about the specifics of the investments they recommend for each category.  Then think how you would feel if the market goes against you in any category.  Think about whether you’ll have the discipline to stick to this allocation.