Stocks, Bonds, & Cash (OH MY!) My PERSONAL Portfolio Allocation

I share my personal retirement portfolio allocation. I share exactly how much of my portfolio is in stocks, bonds, and cash. You may want to shift toward more conservative investments once you retire, but you can’t completely abandon risk and potential growth. What percentage would you suggest for stocks, bonds, and cash? If you want to plan for early retirement, this video is for you!
**I am NOT a financial planner! This is just the story of my personal financial planning for retirement. You should do your own research and talk with your financial planner before investing.
#assetallocation #aggressive #moderate #conservative #stocks #bonds #cash #personal #buckets #risk #growth #investments #financialfreedom #financialplanning

[garethwalters]

Maybe think about it terms of years of expenses Julie rather than getting too hung up on percentages. This is effectively what your bucket strategy is trying to do but consider what you would feel comfortable with. For example, if your annual exps are $25k, then you might want 2 years in cash, so $50k, 5 years in bonds, so $125k (that's 7 years of more conservative assets), leaving the rest in 100% equities in bucket 3. The percentage for these will be very different for someone with $500k vs someone with $2m, so its not about the percentage necessarily but more about how many safer years coverage do you want.

[billjoyce]

My wife and I are around 10% cash, 20% bonds and 70% stocks and we are retired. We are comfortable with this since we can live many years on the cash and bonds along with Social Security.

[jamesflick]

We have SS and two pensions. We use a 60/40 allocation using Vanguard for low expenses. VPCCX, VTI, VUG, VXF, VXUS, VYM, BND, BNDX, BSV and BIV. This gives us growth, added income and downside protection. It is very diversified. I enjoy your videos! Good luck with your decisions. Two things to control, taxes and expenses.

[roblowry]

Like you, I'm 58 and a part-time teacher looking to fully retire at 59. I'm in the UK, been teaching 34 years so get a pension that will cover our basic needs. This will be topped up at 67 when I get a state pension too. So for me, it was a case of bridging the gap between 59 to 67 to do more than just the basic survival things. I've got 3 years in cash and the rest 100% in passive global equity index tracker. I've stress tested this plan and am hopeful it will be sufficient.

[Mekias]

My allocation would seem very aggressive to most (85% stocks, 10% bonds, 5% cash). However, since I'll have a decent pension that can take care of the majority of my needs, I feel like I can really cut back on pulling from my investments if a market downturn happens. It's "personal" finance for a reason. Everyone's situation is different.

[VTLovesSF]

I'm the opposite of you, I'm not afraid of risk, I'm slowly trying to increase my bond level but I'm scared of my portfolio not growing enough. Probably 5 years from retirement.

[AJESB]

Your an inspiration digging into these numbers as I am soon approaching retirement

[fazalrahaman]

Julie, equity securities (stocks) usually experience longer-term growth much more than bonds. You should have a larger portion of your holdings in stocks, say maybe 60% to 70%. I have been investing since I was much younger than I am now and that has been my experience. They should be held in your retiremwnt account so that the growth is tax free. Hope this helps.

[marksweather]

I'm six years from retirement, right now I have most my stock in FXAIX. Year to date it has made 23.33% and tracks to the S&P 500. I'm about 70% stocks, 20% bonds, and 10% cash right now. Expense ratio is a crazy low 0.015%.

[dgs]

Thinking of the cash bucket in terms of years helps me be less risk averse. I've got 5 years' worth of expenses in cash right now and the rest of my money is in stocks. When I start taking SS, that same cash bucket will be around 15 years in cash, so I'll move 5 years to stocks. I don't think stocks will stay down for 10 years, though anything is possible. For now I've got 5 years in cash, and the rest in low-cost index funds (an all-US, all-world other than US, and a little bit in another etf with a little higher expense ratio that's done real well for me)

[enonknives]

80% stock index, 20% cash, no bonds. Draw annual income from cash, and then rebalance the portfolio once a year back to 80/20. This forces you to buy low/sell high, which is what you want to do with stocks. Social Security and other pensions count as fixed income, so you don't need any bonds. Draw from your 80/20 portfolio whatever isn't covered by Social Security/pensions. You don't need any buckets, but you could consider the 80/20 portfolio sort of like two buckets. If the approach is too scary, then do 70% stock index and 30% cash.

[tammy]

Well done video. Just remember, you have to do what you are most comfortable with. Thanks for sharing, it’s informative.

[ournextseason]

Hi Julie, part time teacher here looking to retire this summer aged 56. I’m a very nervous investor and peace of mind is a priority for me.
I’ve gone three years of expenses in cash (fixed rate guarantee d bonds here in the uk and high yield savings). The remainder of my portfolio is split 35% in Vanguard’s 100% equity fund and 65% in Vanguard’s short term global bond fund. Charges are low and there’s no hassle other than check asset allocation quarterly . Bonds currently giving 4.65% and equities 16.4%.
Hope I’ve done the right thing! Everything held up and behaved as it should when the stock market blipped in August so 🤞🤞.
Thank you for being so honest and real x

[jimmy]

It's definitely a personal choice. I could make the argument for more risk or being conservative. I use the bucket approach too with a hard emphasis on dividend growth. With me going back to work, I'm taking this opportunity to focus on our after tax account. Stacking pennies!

[davidnprogress]

Excellent video. That is a very conservative allocation that it going to limit your growth opportunity in the future. Of course, you have some advantages with a pension and being just a few years away from being social security eligible. These two things will help reduce the mental stress of the what ifs. I would certainly rebalance to have more stock. Another thing is that although we have multiple accounts, they are mostly invested in the same funds. This has really helped with the complexity.

Finally, make sure you look closely at the funds you do have to ensure they are simple and low cost as fees can eat through your returns over time. Example, my core S&P Fund is FXAIX which has had a 24.31% YTD return and the cost is only .015%. Core bond fund is FXNAX with a measly 3.09% return and a cost of .025%.

Keep up the good work

[MrRikkiRocket]

You are young - and not taking a risk is also a risk that you will run out of money if it doesn’t grow. That being said you should be fine with 50% stocks/40% bonds/10% cash as you have planned. As far as election concerns keep in mind average stock market returns during an election year is 10% and the year following election is 8% on average. Good luck! With❤ Rikki.

[evasanz]

Hi Julie,

I will invest one part in a dividend growth ETF like SCHD.
And if you do not need those dividends, you reinvest them and will see, when time goes on, an effect called snow ball.
But as SCHD is all shares, and you are quite prudent, I won't put all the money in there, just a percentage you are comfortable with.
These are my 2 cents.

Have a great weekend!

[ProfChris]

I also agree that a 50/40/10 split is good. I have about that - kind of. I have 49% stock, 22% in bonds, and 29% in a "guaranteed' account that I'll rollover to an annuity when I hit 66. It grows daily and will continue to grow slowly for the next 3 years. My account is with TIAA and they do a good job of helping me re-balance yearly. I don't count my ROTH, cash money markets, or emergency fund into the equation. Those are my fun money and I use those to travel, donate, and I'll need a new car in another year or two. Mine's 21 years old now:-) I guess, I only count bucket 2 and 3 in my retirement and bucket 1 is for fun spending. I'm still working very part time so I have a little coming in each month. I appreciate this video Julie cuz it made me take a look at how I had my account is structured. Thanks!

[Mightyluna]

I'm a "vanilla" investor too 😄however, my portfolio is about 90% stock. Yikes! I'm thinking I need to shift some to bonds but when I look at the bond returns, I cringe. Wondering if an 80/20 stock/bond split is good. Still maybe a bit aggressive for retirement but I do know some retirees who are still 100 invested in stocks. If anyone wants to chime in I'm all ears. Especially because I've decided that I'm going to pull the plug and retire end of January 31. I was going to hold off until mid/late next year but after a team meeting at work today, I know I need to get out sooner. Wish me luck. I'm terrified. PS. Thank you for another great video!

[myengs]

We have multiple retirement accounts and I too have to go through each separately to determine how they are balanced. As I get older I have less desire to micromanage all of these accounts and look forward to simplifying.