Ask Terry Questions Is Our Asset Allocation Correct for Our Situation?

Is Our Asset Allocation Correct for Our Situation?

By Terry Savage on January 04, 2019 | Financial Planning / Retirement

Hi Terry, I am 69 years old and retiring in 2019. My 401k/IRA (TTL $600,000) allocation is roughly 40% Equities and 60% Fixed. My wife is 57 years old and she is at 58% Equities/42% Fixed in her 401k ($400,000). I have a pension and Social Security accounting for $50,000 per annum. We can live on $75,000 annually. My wife will work for 2 more years. I figure our total allocation is set correctly because 1) my allocation is fairly conservative with laddered CD’s but with some growth and 2) her allocation leaves room for more growth due to our age difference plus she has long life in her family. I would draw 4% annually from my nest egg and may not need my wife’s $$ for 20 years or so if ever while I’m alive…I think our allocations are fine but would appreciate your thoughts. Thanks, John

Terry Says

This is too serious an issue for me to take a guess.  This is why you might want one visit with a fee-only certified financial planner.  (Find one who is a FIDUCIARY at  He or she might come up with some things you missed.  Immediately, I’m wondering if you’ve considered the cost of Medicare premiums and supplements in your budget.  And whether you have at least a small amount of Long Term Care insurance.  (When you’re over 65, there is a 10x greater chance that you’ll need some form of custodial care than that your house will burn down!)

And I don’t know whether your accounts are titled “correctly” and beneficiaries are named correctly for your retirement accounts.  And whether you have created an estate plan, preferably a revocable living trust.   And if you have made provision for children or grandchildren?  For all those reasons and more, I can’t give you a “pass” on your investment strategy.  A planner needs to know the entire picture.  But at first glance, it looks like you’re on the right track — as long as you promise you wont panic in a full-fledged bear market!

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