Quote:
Originally Posted by Wallymo
I'm 53, and had all my retirement in Schwab's "retirement 2035" account. My son is a business major and went over the individual investments that make up the retirement 2025 account. Turns out that 18% of my retirement investment was in bonds.
At my son's recommendation, I changed my allocation to 100% in Vanguard Institutional Index I ("VINIX"), which tracks the S&P 500.
It's a few days later, and I'm a bit nervous. I've read this string for years, but don't post on it as I don't have the disposable income to make trades for singular stocks. Any advice from the group here? Do you think it was the correct choice? You guys have such a deeper knowledge base than I do. My goal is to have my current account double twice in the next 15 years (which would be boosted by my yearly contribution of ~$30k). That should hopefully be enough for my and my wife's retirement. Based on family history, I'm likely to die before I hit 75 but my wife will live to be 100.
Thanks in advance!
|
I'm probably not a good person to ask because I have a very high risk tolerance. For my entire working career, I never owned a bond and was 99.99% stocks. It paid off really well, because I think stocks have consistently outperformed bonds for that entire three or four decade run. (Someone might want to check my math on that, but I'm sure overall it's been better.) I always had the philosophy that I had a long enough time Horizon that I could ride out any downturns and would just take the Investments with the better average long-term returns.
2021 was kind of painful, because I was really close to retirement and still in 100% stocks and they tanked. I realized at that point that I probably should become more conservative. I got lucky at that point because CD rates went through the roof, so I just put a bunch of money from stocks into cds. I just don't quite understand bonds enough to figure out why I should have them.
I may start figuring it out and going with more bonds going forward since I'm actually retiring now. But a lot depends on life expectancy. If you're 65 years old and you're planning up to age 90, that's still at 25-year time Horizon for investments. Just have enough in conservative stuff to last you for 2 years of living expenses in a downturn, and keep the rest in stocks. At least that's my philosophy.
So my bottom line is that I would go 100% stocks in your situation, but recognizing that I have a really high risk tolerance for these sorts of things.