Retirement savings portfolio stock vs bonds recommendation
First of all Terry I listen to you every chance I get when your on WGN thankyou for all that you do for your listeners. So I’m 65y/o and still working and taking your advice not to apply for social security til I’m 70 to get the max. My house and auto’s are all payed off no credit card debt. My question is I currently have 1,000,000 total in 60% bonds and 40% stocks would you recommend reducing the percentage of stocks and increasing the percentage of bonds if so what percentage? I’m a little concerned being about 4.5 years from turning age 70 not a lot of time if there’s a major down turn in the market and not a lot of time for recovery til 70y/o
Terry Says
This is a tough one — and not a question of economic theory, but rather one of personal peace of mind. Teh very fact that you are questioning this allocation shows that you are missing one vital ingredient –CHICKEN MONEY! I’ve written many times about the need to have a significant amount of chicken money — money in bank CDs, money market accounts or short-term Treasury bills — set aside. Search my columns using the term chicken money.
You don’t get rich with chicken money — but you don’t get poor, either! And you do sleep well at night. And at age 70 sleeping well is important. You may get up to go to the bathroom — but you don’t want to wake up worrying about the market.
My personal take is that at this stage you would want 20-25% in chicken money, which allows you the peace of mind to let the rest of your portfolio remain invested.
But perhaps you should use this moment to meet with a fee-only FIDUCIARY advisor who is not trying to sell you something, not trying to charge you management fees on chicken money. Read this: https://www.terrysavage.com/pam-krueger-wealthramp/
