That allocation for people in your (guesstimated) age group, is certainly within the realm of normal, if that helps.
There isn’t one right answer. Things such as risk tolerance and whether or not you have pensions or other assets, such as rental properties, are part of the “equation.” Some people who are retired like to put all of their funds in very low risk investments, and some would say keep a couple of years worth of money in low risk investments and put all of the rest in stocks.
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Gosh, I feel like there are too many variables that we don’t know.
What’s your age? How much of your retirement is pretax? Do you have pensions? Are you going to use your retirement for living expenses or is it a legacy account? How much money do you need to draw down from this IRA to meet your expenses?
Assets that are managed are 65/35. We are more heavily stocks in accounts not under mgmt. Their algorithm puts us at 65/35 because we are early 60s even though my risk profile is higher and I wish it was more stocks.
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I would not own bond mutual funds due to the valuation swings.
If you own actual bonds, yes the margins swing but always pay off at 100. Bond funds are not the same.
But yes you’d need to know how to pick bonds.
But you have securities paying more than 1% in interest and so the loss was value of the bonds the fund holds.
No one can tell you if it’s appropriate. We don’t know your age, risk tolerance, how much $$ you have and your income needs.
It may be appropriate but it might not be.
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Predictions are fool’s work. If people knew the stock market trajectory, they’d be billionaires and not prognosticators.
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You are smart to be asking questions.
When it comes to investing there are a lot of people who lack knowledge, but the truly dumb ones are the ones who don’t acknowledge what they don’t know.
I would suggest if possible you find a trained professional with whom you can share your personal risk profile, ambitions, timelines etc. Perhaps after that meeting it will make sense to work with someone or perhaps you come away comfortable going it alone. One way or another you will come away better informed.
I have had a brokerage license and been in the business for decades but still seek out independent and informed professional advice that I pay for. For me failing to do this falls under the expression of potentially being “penny wise pound foolish” in not fully realizing the art of the possible.
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That all sounds logical, however, you can talk to someone who seems oh so educated and even comes highly recommended, but then you realize that they don’t have your financial interests as top priority. Even if they are a “fiduciary”. People need to make their money and sell products where they get paid, and it is most definitely is a trade off between what is right for you and what is right for them.
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Our CFP doesn’t sell products…at least not to us.
He doesn’t have a crystal ball to know what will happen next, but he DOES have a great handle on trends…much moreso than we do. So we value his advice, and so far, he has not done us wrong.
YMMV, of course.
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I think you’re going to get a different answer no matter whom you talk to, professional or just us folk on here. I would have no problem with the allocation, but my problem is with the bond funds. I don’t care how many professionals tell me it’s the right split, I think there is zero reason to have your money in bond funds paying jack when you can put it in high paying money market funds earning close to 5%.
I am very irritated with the Vanguard advisors investing much of my mother’s retirement money in these pathetic bond funds, because that’s their formula. Their own settlement fund (where they stick your money in when it’s in”cash” is paying over 4%, so why have it in these awful bond funds? But I don’t want her to feel uncomfortable, so I say nothing.
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Which is why you listen and learn before ever fully engaging a financial advisor. Trust takes time and professionals will give you that time.
When I get on an airplane fortunately I can rely on the government and airline to ensure the training of the pilot and of course we will have a mutual interest in safety.
I agree this isn’t as assured or transparent in financial advisory.
That said I would not walk into the cockpit and try and fly if I couldn’t be assured of the pilots qualifications. Finding the right professional and benefiting from the right professional’s support are entirely different issues. I would take my time and seek out someone I could trust in either scenario.
Good financial advice is worth not just $ but the time it takes to identify the right advisor.
Once again in my experience the people who do the most self harm are the ones that think they know it all in high risk/reward areas outside of their training or expertise. They don’t know what they don’t know, and tend to reinforce poor decisions by repeating behaviors in the absence of independent voices.
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This topic is interesting to me. I manage my elderly mother’s (small) portfolio. I only use money market funds, CDs, and individual bonds for her bond-type investments. It requires more active management from me, but bond index funds seemed like a stupid idea for her situation.
However, I have decent chunk of my own portfolio in bond index funds for simplicity’s sake. Because I’m 46 and I don’t want to pay attention to that many individual bond-type dealios for myself right now. I’m guessing I’ll transition myself away from bond index funds in the next few years.
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With your IRA, are you selecting the investments or is the investment choice with a mix? Sounds like separate since you indicate the rate for bonds and the rate for stocks.
It depends on how big the IRA in comparison to your total retirement portfolio, if you have the right allocations based on your overall portfolio and your personal risk profile.
Our FA has our Roth IRAs in their highest risk fund group, but we don’t get as good of returns in all but one year from DH’s 401k (which we have in 3 different stock groups). But our overall risk is good. The gains we have on the 401k are taxable, but the Roth IRA funds are our ‘last use’ and most likely will be part of our estate at our deaths. We do like the idea of having funds go to our DDs/families at our deaths - we are not in the camp of spending down totally in retirement.
Based on your additional comments, I would schedule a meeting with your FA. Indicate you want to learn more about investments and your risk profile - and see projectiles he/she can present. They should totally answer all your questions - that is what you pay for. Learn what you can also before and after your FA appointment.
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That is why there are ‘trust’ issues with FA. Our fiduciary FA is a long-term relationship. We believe what they manage for us is right for us, and is a win-win.
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We like our fee-only and fiduciary financial advisors. He is our second FA, after the first one retired and recommended him. He works for us/our best interest and is transparent. Like our first FA, when he buys any fund that has a commission, he deducts the amount from the fees he charges us. No need to worry about a FA buying funds for commissions.
Besides investment advice, he also assists us with retirement planning, tax strategies, estate planning/wealth transfer strategies, etc. That would be a lot for us to think about and plan for if we did it ourselves. Having a FA we can trust is very helpful. To us, it is a good investment and so worth it.
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To me, if someone asks a question here, they are seeking an answer.
So if someone does their best to answer, that’s why OP came.
So to tell people that you shouldn’t listen defeats the purpose of the board.
OPs can decide what is right for them.
Having a CFA or CFP does not necessarily make anyone better than another.
Markets are unpredictable. There are no assurances.
CFAs raise stocks from neutral to buy after they go up 400% or downgrade to sell after they go down 80%. They miss all the time.
If someone thinks someone should hire a paid professional, I have zero issue.
But they can do so without denigrating the non paid people OP has asked for advice.
After all, the OP asked a question of presumably non paid people and deserves an answer - whether they choose to utilize it or not.
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Statements like “Predictions are fools work” are “denigrating” to people that do such things for a living.
To be clear people aren’t coming here for an answer they are coming for an opinion. My opinion is that educated and experienced experts provide the best and most informed answers.
There is an old expression attributed to Abe Lincoln that a lawyer who represents himself has a fool for a client. At least the fool in that case has a law degree. Diminishing those with a CFA, MBA in finance or other formal investment training is both denigrating and insulting.
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I’m sorry about that. Unplanned retirement or furlough is very unpleasant. Both me and my husband were furloughed at the same time, and it was terrifying. We thought we had finally gotten our dream job, and bam, furloughed with two little kids and only expensive health insurance and little savings. I hope it works out that your husband doesn’t lose his job. It has to be a scary time for many people, not knowing their future.
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That must have been scary! Our retirement has worked out fine, but the bumps in the road were no fun, And that was without ever being down to no paychecks.
We had a point where I was put on the layoff list. My husband had gotten a tech support phone job (overqualified, but we were glad to have it!) after a year of unemployment). He was 1.5yr into the 3 year supplemental contact when my bad news came. It was one of the most stressful times of my life. At one point, we were considering a job offer for me in another state if his interviews also yielded an offer. PHEW - I found a local job at my company by changing division / career path.
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Serious question, financial, not political: who here believes they can afford to pay for medical care later in life when Medicare is abolished? Probably just a small fraction of the posters here.
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I think we should not be talking about Medicare being abolished on this thread - over time there may be changes. Perhaps one can plan for more health care cost participation. Some people already do so if they do not have a comprehensive health care insurance plan at a reasonable rate through their employer.
Kiplinger March 2025 (issue is out now) has a 6-page article on setting a course for early retirement. A big section has a larger red type stating “Health insurance premiums are often a significant barrier to retiring before age 65, when Medicare kicks in.”
“Some enhanced subsidies on individual health insurance are scheduled to expire at the end of 2025. If they’re not extended, premiums will increase significantly for many policyholders in 2026.”
It also has a section “When to claim social security”.
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Depends on high it wound up being. I expect costs for everyone will increase, and the brackets for IRMAA to either drop in ranges or increase significantly per range in price. Likely both. I mean, could dh and I each afford to pay, say, $25-30k each per year for health care? I suppose so, but we’re gonna need to die sooner than I’d like.
Medicare was the single thing I was counting on. We could make it without SS (have never counted on it in our planning), but without lower cost healthcare, it will likely be a pretty dull retirement reading borrowed books from the library and watching a lot of TV.
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