Ask Terry Questions Rebellion of the bond market article.

Rebellion of the bond market article.

By Terry Savage on March 02, 2021 | Financial Planning / Retirement

Currently I am debt free and retired. I have about 13% of my portfolio in bonds. My pension and Social Security easily pay my basic expenses and then some. I am beefing up my savings at my local bank accounts. When I reach about half of what I have in bond funds I am thinking about converting about half of my bond fund (Vanguard Total Bond Market Index Fund Admiral Shares) into VANGUARD HIGH DIVIDEND YIELD ETF. Yield is about 3 %. I think like you rising interest rates are not going to be good for bonds. One way for government to reduce debt is to inflate it away. Something I went through in the mid seventies to early eighties. That set me back a decade financially. Stocks represent actual assets that will keep up with inflation.

Terry Says

You assessed my position correctly in my latest free newsletter. (sign up at TerrySavage.com) Stocks have beaten inflation over the long run — every 20 year period. But they can give you a heart attach in the short run, if you don’t understand your plan and have a long-term perspective. It’s great to be debt-free and retired. And have some “chicken money” on the side, allowing you to sleep through stock market upheavals. Also, have you considered a long term care insurance policy — a hybrid plan for both life insurance and care benefits? the one huge cost that could devastate your retirement savings is the cost of long term care for something like Alzheimers.

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