Is a 100% Stock Portfolio in Retirement Best? (FQF)

[@PJBHolden]

I just retired and I’m about 80% equities and 20% cash. I just can’t get myself to buy bonds when my MM account pays 4.6 %

[@---capybara---]

Just curious - then why not buy TIPS? Ti my brain locking in 1.8% after inflation doesn’t sound too bad, might be close to cash

[@lg7728]

Very good mix! I have added 10% in T-Bills, 4.35% for six months with Fidelity. I paid GA state taxes for the first time in seven years. Hopefully, T-Bills will avoid this problem.

[@halbbd02]

Exactly how I feel. I’m 70% stocks 30% cash. Not retired yet. Working to get to 80/20

[@x-in_my_mind-x]

As a Boglehead: MM instead of bonds is only a short view. In the long run bonds will outperform MM.

[@murraypassarieu9115]

I'm 5 years from retirement and have been 50/50 as long as I can remember. I know I miss out on some upside but I also sleep better this way. I wish I had the temperament for a larger stock portion but I just don't.

[@johnbeeck2540]

Love this program Rob! Happy Holidays!

[@mingyutang549]

This really depends on how much money you have. It is totally fine, maybe even optimal, for rich folks. It is a bad idea for people have just enough.

[@Fred2-123]

Agreed. It is problematic to retire on a shoestring.

[@uwerathsack]

Many people are choosing AMZN as their "stock of the year." I agree it has a chance to be. But my question is, what stocks can be the next AAPL in terms of growth for the next decade? I've set aside $250,000 to invest for a long-term goal in order to retire comfortably.

[@JacobGeorge436]

It is dumb to put all your eggs in a single basket. I'd suggest you buy ETFs or, better still, seek guidance from a well-qualified advisor. My investment portfolio is made up of 15% PLTR, 15% TSLA, 25% NVDA, 15% VOO, and 30% in digital assets, credits to my advisor. I've made over 60% capital growth this year.

[@JosephZerafa-l3g]

Could you possibly recommend a CFA you've consulted with?

[@JacobGeorge436]

Caroline Suzan Olson is the licensed advisor I use. Just google the name and you'd find basic info. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.

[@uwerathsack]

Thank you for this pointer. It was easy to find her handler. She seems very proficient and flexible. I booked a session with her.

[@SergioMartinez-i4n]

Why I like investing through an advisor is that I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.

[@miatafunrun3078]

The ERN spreadsheet is great. Don't let initial looks confuse you. All you need are some basic inputs. There is a video on channel "Two Sides of FI" that walks you through it.

[@MichaelToub]

Now that I know when you live stream, I will put it on my calendar and ask a lot of questions in that forum!

[@TedWesterfield]

I’ve now watched the video and my opinion hasn’t changed. A 100% stock portfolio in retirement is a bad idea. Also agree that the study’s methodology is highly flawed. As for holiday books, I agree that the JL Collins’ book, The Simple Path to Wealth, is an excellent read and a great general rule for investing. It proves the adage: All things in life should be made as simple as possible but no simpler.

[@carlyndolphin]

100% stocks is the best.

[@JamesBondEsq.]

@@carlyndolphin Agreed! Retirees should consider their Social Security (SS) payment as a "bond." Both Michael Kitces and the late Jack Bogle are/were in agreement that retirees should make the aforementioned mental accounting relative to their SS benefit payments.

[@shrunkenheadfilms]

Rob, really enjoying Five Question Fridays. Also, another vote for Karsten's sheet. It's a really terrific tool.

[@BuckeyeFan9591]

Excellent Rob! 33 year old been loving the channel, even looking forward to eventual retirement! You’ve helped with savings mindset and capabilities of personal money management

[@dansenergy461]

My largest equity holding is VT, and 35% of that fund is international. I wouldn’t go more than that but I appreciate having the diversity of 9755 stocks from across the world. Like Bogle said, but paraphrasing; “I am not trying to find and buy the needle in the haystack, I am buying the haystack”. VT. VTI, and VOO all have 9 or 10 of the 10 largest cap stocks that are in the S&P 500. The only difference in those top 10 is that VT has Taiwan Semi-Conductor. My equity/fixed ratio is 65/35.

[@mt2766]

I love this format and thank you, thank you, thank you!

[@CaptainBenjamins]

Been doing this for the last 15 years 60% VTI 20% VXUS 20% BND

[@TonyCox1351]

This is exactly my portfolio. I won’t outperform the market, but it darn near guarantees I’ll have a successful retirement, and that’s the goal.

[@russrichards6685]

3 Fund portfolio - Jack Bogle would approve.

[@DK-pr9ny]

40% wasted..

[@educatedwanderer9293]

I'm at 65% equities, and 35% fixed; 70% USA and 30% international at age 56, with a plan to retire with $3M at age 60 to 63 depending on conditions.

[@stephenholcomb9278]

Just outstanding Rob! This may be the best overall/most informative video you've put out. Just a rapid fire of QUALITY....with links! I've loaded up my Kindle and I've got this nice spreadsheet to worry over like a tooth :)

[@dabdias]

There was nothing wrong with the methodology used in the paper discussed at the beginning. The crucial point is that investing in stocks generates the highest return over long periods of time, despite higher volatility. It’s better to ensure a 40% crash when you have 1000, then no crash when you have 400. The equity premium has been so high that bonds just don’t pay enough. 100% stocks should be the goal for everyone if equity premium continues as high as it has been. It is key however to have a buffer in consumption. Bonds are also not that great, when interest rates raise rapidly, bond prices drop quite a bit and there can be periods of very low interest rates which are a huge drag on savings. Just because you don’t understand the research, it doesn’t mean it’s wrong!

[@youarehere1251]

If you have pension and SS or other passive income to support your lifestyle, yes, all in stock.

[@char23c]

I agree, i have two pensions, plus, SS, and a small VA disability, all these has a cost of living feature, and almost all of my investments are in the Vanguard total index stock fund or VTI or cash, No bonds or international stuff for me. Jack Bogle is the greatest financial friend I have every had. Don't look for the needle when you can buy to whole hay stack. 😀👍

[@lg7728]

​@char23c I agree also. I have military retirement, VA disability, SS, and Federal Civil Service (FCS) retirement. My wife has her FCS retirement and SS. We don't need to withdraw from our investments. We could be 100% in stocks.

[@lg7728]

​@@char23c I love Vanguard also, VTI and their MM. I started with them in the early 90s and I have one of Jack Bogle's books. I was blessed to have worked for a financial planner in 1977 in beautiful Athens, Greece 🇬🇷. He encouraged all of his employees to invest.

[@aaront936]

Gripped it a ripped it 100% stocks through 2008 2018 2020 and 2022. Bond yields dont offer enough to keep them in your portfolio.

[@valleyofiron125]

With s&p500 overweight with mag 7 and the crazy washington admin, inflation stickyness, and crypto lunacy, it feels like timing an exit from stocks is required. I went safer 5 days ago and already missed out on gains. The nutty exuberation and over valuations feels like a drug that could kill me.

[@keithfrasier]

Great video Rob, Merry Christmas!

[@cynthiaowens9107]

Love the FQF platform!

[@lindalealphamale]

If you know you need only 50 or 60 % of your portfolio before you die, then you are actually investing your kid’s money, in which case history clearly shows 100% stock portfolio is a good strategy

[@Zorlig]

Depends on your priorities. There are certainly a set of preferences that are answered with 100% equities

[@Toomanydays]

You are correct. In my case, I don’t need the money and most likely will never spend it. Why would I want my heir to inherit bonds? My wife and I come from lower/middle class working families. This is the first chance our small family has for generational wealth. It’s go big or go home. I’m 67, I’ve got $2.5M invested in SP500 index funds my daughter will inherit. I don’t own any bonds.

[@Zorlig]

@@Toomanydays I'm 100% with you, going to leave behind a huge trust

[@alex182618]

Absolutely yes. What are bonds? Their ability to pay coupon depends on the ability of corporations to generate cash.

[@Johnwestly-l6n]

I have an Investment portfolio that's worth $1million, I don't think that'll be enough for retirement. I need an average risk investment strategy in stocks that'll give me more yield. Is buying stocks now a goods idea?

[@Fred-w7t]

As they say, time IN the market is better than trying to time the market. I think you should seek advice from a licensed financial advisor. They’ll give you guide on high risk and low risk investment strategies for your portfolio

[@raymond-i2v]

Working with a financial advisor has been a game-changer for me. They provided invaluable insights and tailored strategies that aligned perfectly with my risk tolerance and financial objectives. With their support, I've seen significant growth in my investments and gained confidence in my financial future.

[@Jordan8568-l4u]

I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.

[@raymond-i2v]

Stacy Lynn Staples is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

[@kw7292]

5 question Friday is the best!

[@NiranjanBendre]

OMG you are the author of doughroller! I used to read the RSS on Google reader. The product got discontinued. I moved to other products but I stopped using them. Now I stumbled upon your video from somewhere else (recommendation in another video). And then liked what you said. Then you recommended some books and your book also. Got your book and on that book you said he authored doughroller! This is a small world or just a huge coincidence! 😅

[@michaelbakhtiar9256]

Awesome awesome video!!, I’d like to learn more about backdoor Roth conversion please.

[@keitha.9788]

100% in stocks? Generally no. In retirement, always have at least 9 months cash available. But if you must have a large portion in stocks, use an S&P 500 ETF (like SPY, VOO, and RSP). Your risk is divided among the 500 largest U.S. companies (many of which are multi-national companies). You are diversified...

[@carlyndolphin]

Global stock market is safer (3,600 equities).

[@chatgpt-n8r]

as long as the Fed put is alive 100% is a good idea in fact a 200% stock portfolio would be better since you can go long on margin account. As long as Powell is in charge Stocks can't go down.

[@oahuguy3918]

Yes. In those rare cases where you don’t need it for income.

[@rickyaz8640]

It resolves the behavioral issue of trying to time the market. If you have enough you’ll be fine. Simplicity is a virtue and the cost can’t be beat. Social Security and your cash holdings (you need to pay bills, after all) are your bond component

[@BadPhD777]

Just finished The Psychology of Money a few days ago. My daughter bought it to read for her college personal finance class. We both thoroughly enjoyed it, and she did a lot of underlining! 🙂

[@michaeltyl7697]

Nice job Rob. Thanks.

[@terryadams1830]

Great video Rob! Thanks!

[@hanwagu9967]

I imagine if you are say a retired federali couple with over $200k pensions, $60k taxable dividend/interest income, over $70k social security, income tax free state, with non-tax expenses of $70k, like my friends, then 100% equities doesn't seem like a negative. Although you'd expect that maybe you'd still have 1% in cash/cash equivalent at any given time. I suppose if you also had non-investment income that covers your expenses that would also bias toward a heavier equities argument, too.

[@oceansunsetak]

I have always kept 25%. In money markets or cds. Looking back, it did not make any sense when the interest rates, we're very low. When I was fifty, i was advised to sell my stocks and put everything in a balanced fund. That was not the best move, either. Today, I m in twenty-five percent money markets, seventy five percent stocks. The only other income I have it is from social security. That's not much. I can live off. Interest from money markets and the principle if needed. The stocks i will leave to my kids. After a couple of years of easy stock money. There's something to putting hundred percent in equities. " The greater the risk, the greater the reward. But remember? " The higher stocks climb, the harder they fall" ( it's not my quote but makes sense)

[@MrKlawUK]

If you had a baseline of other income (eg early defined benefits pension access) and also have future state pension/social security- can that free things up to make 100% equities doable as the baseline is effectively covering a larger part of your drawdown requirements so allowing reduction in discretionary withdrawals in a poor market year?

[@steveno7058]

Yes. As long you go 100% stocks your entire life. If you chicken out and sell out after a crash you will lose

[@dnah02]

And even more so if you have a pension to replace the bond element

[@normswan5806]

At least something to protect against sequence of returns risk

[@Eric-wc7lx]

Not sure of that - look at retiring in 1999 or 2000 with 100% stock portfolio and having to withdraw under 4% rule. Not a good outcome

[@steveno7058]

@@Eric-wc7lx you would still be fine if you are 100% stock before 1999. Its not like you are selling your entire portfolio. Only a small portion of it. You would also need to be flexible that you can withdraw 3-3.5% during market crashes or do a side hustle

[@jjred233]

@@Eric-wc7lx I know of 2 people with 100 stock retired in 2000 and 2001. Good outcome. A couple with 250,000 and another with 150,000. Its all about staying in budget. If getting social security that amount is nearly the same in bonds.

[@djpuplex]

85% stocks 15% cash (18-36 of expense)

[@henry155]

where do people post the questions ? here is a Q I was about to try to simulate in sheets myself but wonder if it was already done, regarding asset location, when you need/want to have 5 years of safe assets (sure, not bucket, part of the 30/70 but still, logically you see it as the "next 5 years or 10 years are in safe/fix assets" ): Taxable vs IRA. Assumption: retire at 52 (meaning, cannot access IRA money for the period of "5-10 year" . we can simplify and assume no roth conversion though that assumption needs to be taken out after we first figure out this simplified case. Known factors: 1/ fixed in taxable account will generate interest is at marginal rate (which may be high if roth conversion, but can also be minimized using muni) (unclear con, since muni solves the yearly tax problem, and if fix is in IRA, we still end up paying the marginal tax anyway we just delayed it) 2/ benefit of equity in taxable is that the growth will be at capital gains tax , while in IRA it will be at marginal tax bracket (con for eq at IRA) it seems the "tax" data weights towards having bond/fix assets in IRA and eq in taxable but here is the part that is hard to simulate: on Year 3 I need to extract the yearly budget to the checking account, at that point we have to sell equities if we kept them in the taxable acc. if they are down I am forced to sell low... I know your answer here will be: just re-balance at the IRA (buy stock) but there are few problems Risk 1/ depleting taxable assets before IRA is available at age 60 Risk 2/ wash sell prevents from doing this buy/sell easily would love to hear how you deal with this and any research/simulations done.

[@pware9643]

The Early Retirement Now site for SWR template : Finally someone addresses the elephant in the room.. How your success chances are when you start with A) Cape above 20..(what is it 33 now?).. and B) the SP500 at all time high... and boy does it paint a riskier picture for a heavy stock portfolio and drawing down on during retirement. By the way.. the SWR loads up initially at a timeframe of 600 months.. or 50 year retirement... might want to change that parameter first. Devil is in the details of what is stock and what is bonds.. I own preferreds with a fixed maturity.. ie a baby bond, and MYGA's that pay more than 10 yr treas.., and High yield bonds.. and Tips.. So how you going to forecast my return on a bundle..?

[@Austin-fc5gs]

I love ERN and that google sheet

[@erniekeller1093]

This is my 100% stock portfolio. Others are like it, but this one is mine. 🙂

[@helloharry1418]

Military lol

[@TedWesterfield]

Even before watching-No.

[@kckuc310]

Exactly

[@Frank-nh9fe]

The longer the bull market goes on, in financial circles, the more aggressive the recommendations. I wonder if a lot of these recommendations would be made if we had a large correction and/or the market was flat for a few years. People get overly brave during goo times and overly pessimistic after bad times……

[@lg7728]

I agree. Warren Buffett and Jim Rogers say the market is overvalued. Buffett has billions in cash.

[@georgewyse8378]

Great review on this study.

[@lesbolstad]

Not after the long bull market and virtually every large investment firm projecting stocks returning approx. 5% the next 20 years. If it was 2008 I'd say maybe

[@mikesurel5040]

Look back at the last 20 years of projected returns from Vanguard and Fidelity and the like and you will see lots of instances of "4% returns for the next X years". Nobody knows. Those projections are not worth much of anything.

[@brianmcg321]

Does it bother you that all predictions have been wrong?

[@TonyCox1351]

Goldman Sachs predicted 3% for 2024 and it ended up being closer to 30%. So I wouldn’t put too much stock in those predictions, no pun intended. It has to come down some day but no reason to believe it’s anymore likely now than 2 years from now.

[@Random-ld6wg]

@@mikesurel5040 especially the ones during the onset of the great recession. most were expecting 2-3% annual returns for the next decade. i used to keep financial magazines and reread 2 yr old issues that had market forecasts. majority of the time they were completely off.

[@UTubePhoenix]

Rob do you know of empirical studies done on the 401(k) inflow vs. expected 401(k) outflow for the next 20-25years?

[@garywilliams9810]

Thanks for the videos Rob. Interesting, I’m invested in 100% index funds for growth with 6 years cash on high interest accounts. If the market crashes I’ll live off my cash. What are your thoughts on this?

[@koufax174]

25% BRK, 25% SCHD, VOO 25%, individual Value oriented forever stocks. Stable, consistent, low downside, beats SpY

[@AshiStarshade]

Also look at BFEB.

[@koufax174]

Thank you!🙏🏼

[@clsanchez77]

Now, what if more than half your income is covered by a pension?

[@rick_vv7754]

The question would be best answered by someone who retired in 2000 and began taking withdrawals.

[@davidmcnay]

Rob clearly needs to reread the study or maybe listen to the guy interviewed in the rational reminder podcast. Rob makes several simply incorrect statements about what the study was and shows.

[@koryandmaria3560]

I was about to suggest the same!!!

[@mcdermottjon]

Bonds are spoken about as if they are immune from downturns. Yes, they fluctuate less than stocks, but with bonds there is an opportunity cost of missing out on much better returns from stocks. If a retirees has a 1 or 2 year time horizon, there are no doubt 1 or 2 year periods where a retiree has been glad to be bond heavy. But hopefully retirees are not focused on 1 or 2 years of returns. Where is the 10 year or even 5 year period in the last 50 years that a retiree was glad to be bond heavy?

[@hanwagu9967]

Generally, in retirement you are in decumulation and preservation mode, not accumulation mode. So the opportunity cost shouldn't be a priority or goal. For those who aren't in retirement, or have just recently been in retirement with the current zero downside in the market, then everything will be rosy point of view is a convenient luxury. When you are retired, though, and you have seen or see a 30-50% down swing, people's risk tolerance quickly changes.

[@RonAlfonse-t7y]

Do we really need to have a discussion on the stupidity of 100 % risk assets when you are retired.

[@EthanTweedie]

Build a portfolio that pays dividends and live off the dividends in retirement

[@vincentslusser9205]

Warren Buffet, how much stock allocation has he recommended for the average investor?

[@mikesurel5040]

The caveat being this 'recommendation' is for his wife upon his death. My guess is he has never made any such recommendations.

[@Random-ld6wg]

90/10 S&P index fund and US treasuries

[@TonyCox1351]

I don’t think he makes recommendations for the average investor, does he? I know he makes recommendations for his wife, who is worth hundreds of millions of dollars, but I’ve never heard of him giving advice for the average Joe. I could be wrong though

[@Random-ld6wg]

@@TonyCox1351 he mentioned after talking about recommendations for his wife that the average investor will do much better with this compared to an actively managed fund. something along those lines.

[@Random-ld6wg]

@@TonyCox1351 i don't think based on all he's mentioned regarding leaving money that his wife will end up with hundreds of millions. in the years past it was about 5M per child but that was years ago( i think it was in Snowball but i may be mistaken) but most likely that number is higher now but not exorbitant. his current wife was a waitress and as his wife, still shops in thrift stores and does vegetable gardening. she also famously complained about the cost of coffee during the annual sun valley "summer camp for billionaires". it was $4. i am sure this was from her perspective as an ex waitress. she would be an average joe.

[@mplslawnguy3389]

I’m 100% stocks and will be in retirement. My pension will pay 75% of my average highest 5 earning years. I’m 50/50 VTSAX/VTIAX. In other words, I can survive without my investments if I had to. There’s absolutely no reason for bonds in my portfolio.

[@ctrushfan8575]

Great stuff as always, Rob. Thanks and happy holidays!

[@drmitofit2673]

You didn't define "stocks". 100% invested in the S&P 500 would be more diversified and safer than 100% invested in 10 individual stocks. You don't mention bonds not keeping up with high inflation. Also with astronomical national debt, bonds may not be a safe haven in the future.

[@kckuc310]

lol right until u sell in a down market

[@Kingmohit1988]

Does ETF or mutual fund consider stocks?? If not can you do 100% in ETF?

[@hanwagu9967]

if it is a stock etf or a stock mutual fund, then they are considered stocks. There are bond etf's and bond funds, so they can be considered bonds.

[@saurabhkulkarni2177]

I like 60 % VT 40 % BNDW

[@omni1562]

Guys, I've been buying VTI for 3 years now, without selling. I have it invested in a tax free account. Should i sell and rebuy immediately to bank the profit and buy more shares that way? Is there a benefit of doing that over just holding without never banking the gains until retirement?

[@lesbolstad]

How long to retirement? If within 5 years I'd say go to a 60/40 stock/bonds mix

[@omni1562]

I'm still 25. I was just wondering if you should bank the profit every year and buy more shares with the original money plus the gain or just hold

[@brianmcg321]

That’s not how investing works.

[@TonyCox1351]

If you sell a million dollars worth of stock and you buy a million dollars worth of stock then you still have a million dollars worth of stock. In other words, no, what you’re proposing won’t accomplish anything.

[@omni1562]

@TonyCox1351 makes sense, thanks!

[@lindapatrick2676]

Thank you Rob! Merry Christmas to you and your Family🎄. I’m interested in your thought re instead of investing in typical 3 stock portfolio, you use S&P 500 or Total Stock Market fund for bulk of portfolio, then use SCHD instead of Bonds and use a Growth stock instead of International Stocks allocated according to your age?? I’ve seen two different UTubers that cqll this the updated version of the original Bogelhead Portfolio. Your thoughts! Thanks as always!

[@TonyCox1351]

Keep in mind that most of the KZbinrs pushing that kind of portfolio have only ever known a bull market. I see folks giving investment advice who were still in school when the last real recession hit. I’m not saying it’s a bad strategy, but personally I won’t be putting 100% of my retirement in the hands of a single country and single asset class