Ask Terry Questions Retirement portfolio

Retirement portfolio

By Terry Savage on August 28, 2018 | Financial Planning / Retirement

Hi Terry,
My wife and I just retired. We have a pension that should cover our expenses and about 200k liquid money in a savings account. My question is what should we do with our 50-50 stock/bond vanguard portfolio in light of the run up in the markets. Should we take it and ladder cds or let it ride?

Terry Says

Of course, this is the toughest question of all. What you’re basically asking is whether the stock market will continue to make new highs! I don’t have the answer to that –but I do know that one day — from some level, likely higher — there will be a spectacular crash! (There always is!) And by crash, I mean a decline of nearly 50 percent. It won’t be the end of America — but it may take 20 years to break even on the averages,and some stocks will never come back. You can ride that out when you’re still working and contributing more. But it will cause a heart attack, literally, if you’re retired and watching your money melt away.

On the other hand, bonds are equally risky. When interest rates rise, bond prices fall. So there could be a bear market it bond values (though good bonds will keep paying interest) if rising rates trigger a bear market in stocks. That would be the worst of all worlds!

It’s hard to figure out your “risk tolerance” which definitely changes in retirement. That’s why you might benefit from the services of a FEE-ONLY financial planner (

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