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

[@garethwalters2909]

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.

[@HappyonMonday]

I love that! I use the bucket strategy. I need to rebalance and redo my buckets. Thanks! ☺

[@Greg_7878_2]

That's great advice @garethwalters2909! I'm nearing retirement and in the process of setting up my buckets now and this is how I'm conceptualizing mine in terms of years of expenses. Julie, @joekuhnlovesretirement has some great videos on the bucket strategy and how he manages his in retirement. If you've not had a chance to yet, you might want to check out his channel.

[@tammy9964]

I like your thinking.

[@Mightyluna]

Oh, I like this strategy! Thanks for sharing!

[@lisagardner9798]

Thank you for the info.

[@jamesflick9850]

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.

[@HappyonMonday]

Awesome - thanks for sharing!! That sounds like a smart allocation! 😀

[@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.

[@HappyonMonday]

That's great!! I need to get more comfortable with risk! 😁

[@VTLovesSF]

@billijoyce that's probably where I'll set my portfolio once I retire. Having too many bonds makes me nervous.

[@roblowry9457]

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.

[@HappyonMonday]

That sounds like a good plan!! 😊

[@AJESB]

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

[@HappyonMonday]

I'm glad! ☺

[@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.

[@HappyonMonday]

You can afford to be more aggressive since you're not retired yet! 😁

[@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.

[@HappyonMonday]

Absolutely! Everyone's risk tolerance is different! Good for you! 😃

[@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

[@HappyonMonday]

Thank you! I know my allocation is too conservative and I need to rebalance. It's interesting to read all the different opinions! Your plan sounds solid. Thanks for sharing!! 😁

[@davidnprogress]

@@HappyonMonday first, you have to do what best fits your goals. You know you best.

[@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%.

[@HappyonMonday]

Wow that's fantastic! 😃

[@fazalrahaman5910]

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.

[@HappyonMonday]

Yes I agree! That's why I will rebalance to something more aggressive soon. Thanks! ☺

[@tammy9964]

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

[@HappyonMonday]

Thank you! Oh I definitely will! ☺

[@dgs8011]

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)

[@HappyonMonday]

That sounds like a really solid plan! I like it - thanks for sharing!! ☺

[@ournextseason69]

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

[@HappyonMonday]

That sounds like a great plan! 16.4% is great!! ☺

[@jimmy7376]

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!

[@HappyonMonday]

It is! Nice - thanks for sharing!! ☺

[@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!

[@HappyonMonday]

You have to have the allocation that feels right to you. It's been a struggle for me as well! Congrats on deciding to retire! That's so exciting! 😃

[@Mightyluna]

@@HappyonMonday Thanks! I'm excited too. Also a little scared but at the same time it feels like a huge weight has been lifted.

[@HappyonMonday]

@@Mightyluna I remember that feeling well!

[@mikemiller3428]

I'm in your boat. Wanting to go this year asap. Those team meetings do sometimes do it.

[@howardabe9256]

Hi-best of luck with your retirement in 2025! 80-100% invested in stocks seems rather risky, but, and it's a big but, it depends on what the stocks are. If these are all techy and your are looking for maximum gains to pad your portfolio, the risk of a downturn is very high. If they are dividend payers and are more conservative and you can get your income target from the dividends without having to sell any shares for your income them it makes sense. As a newly retired person myself, my concern is that a down turn at the wrong time can be catastrophic. For instance if there is a 20% downturn in 2025, your hypothetical $1M portfolio becomes $800K and that might be a problem for your cash flow. If this happens when you are 85 and in the no-go phase of your retirement, it may have less impact.

[@enonknives5449]

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.

[@HappyonMonday]

That's an interesting strategy! I have heard of 2 buckets instead of 3. I'll consider this - thanks! 😀

[@bunnobear]

love this answer, this is very similar to our strategy, instead of looking at %'s I would look at how many years cash you have to ride out a storm. My goal is to have 5 years living expenses, which includes low cost travel, in the high years we will draw down "fun money" for bigger trips and house renos.

[@69RTR]

Yes to the two bucket system. 3 is too complicated and higher risk on deciding what to move and when

[@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!

[@HappyonMonday]

Thank you and you're welcome! There is such a wide range in allocations in the comments. I guess it comes down to how much risk each person can tolerate. Thanks for sharing! 😊

[@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.

[@HappyonMonday]

Thank you! 😁

[@ibenglish]

It’s funny you mentioned gold as not being something you are interested in because I was actually thinking of buying some of those gold or platinum bars from Costco once I pay the final 30,016. Off on the mortgage. At worst they would make fine decorations to look at from time to time. Pumping the 401k, IRA and stock options the last 3 years would probably preclude such an action but maybe one platinum bar could be in the offing?, just because. I have a 650 sq ft tack room I plan on converting to a livable property once my house is down to zero and this would most likely the best investment I can make. I am a measure 3 times and cut 3 times type of guy as the first 2 cuts are always bad but this could work 🤷‍♂😳😂. You are well positioned Julie and your channel is awesome so keep up the good work. You are appreciated. 🌹👍🏻

[@HappyonMonday]

Gold is a good investment, it just seems complicated to me. 😁Thank you for sharing! Great ideas! 😃

[@evasanz3466]

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!

[@HappyonMonday]

Thank you! I love seeing everyone's ideas!! ☺

[@evasanz3466]

@@HappyonMonday there is a strategy called the core-satellite strategy. Basically you construct a "solar system" with you investments. The core could be a fund you are happy with, or 2, or3 funds (like one, two and 3 suns) with a higher percentage of your portfolio. Around this fund, or these funds, you choose other funds with lower percentages, (like planets), and lastly, you choose moons (the satellites) formed with riskier funds/or single investments with lower ratios (less than 5% of your portfolio). I hope I have explain it well.

[@HappyonMonday]

@@evasanz3466 That's cool - I haven't heard of that before! ☺

[@nubicep65]

I had to medically retire at 56. Blessed to be debt /mortgage free at the time and still am. Dec I’ll be 59.5. My Ssdi payment covers all my expenses with extra left over each month. and I had about 365-75k that was 401k , investments and emergency fund. Mid 2021. Last month I finally rolled my 401k into 1/2 schd and 1/2 FXAIX. I’m staying as aggressive as possible. I don’t want my money so, spread out either. My fidelity account , a hysa, regular checking and a savings account. I may access for my fun money. I reinvest my dividends. In the 3 yrs since retirement my accounts are up to about 450k. and I hope they keep growing. I’m planning on taking a small withdrawal in Dec about 12k.

[@HappyonMonday]

@@nubicep65 Wow that's great that your SSdi covers everything! I'm sorry you had to retire for medical reasons. I hope you are able to use some of that fun money! ☺

[@LasVegasStateOfMind]

Hi Julie, thank you for your videos. Great channel. Do you plan to generate a further video in the future breaking down your stocks that you hold and possibly why for each? Thanks !

[@HappyonMonday]

Thank you! Yes, I was thinking about that the other day. I'll probably wait until I rebalance and then do it. Thanks!! 😁

[@LasVegasStateOfMind]

@@HappyonMonday Sounds great !

[@mickster1780]

Hi Julie - it does seem like you're pretty heavy on the bond side of the equation. although i don't consider CD's to be bonds. one thing you can do is take a portion of your bonds and invest in lower beta dividend paying stocks/ETFs. there's a ton of those to choose from so you can do a search and go to town researching to find out what is comfortable for you. appreciate all the information. i think it helps people to see real world examples. good luck!

[@HappyonMonday]

Yeah CDs aren't bonds, but I didn't know what category to put them in! I will look into that - thank you!! 😁

[@joemarc62]

@@HappyonMonday CDs are cash, just a little less liquid.

[@jackdguida]

I wanted to say the same thing. CDs are not bonds, they are cash. Bonds in this context are assets that go up when interest rates go down (and vice-versa). This gives you the ability to rebalance when the markets shift. During a recession, stocks go down and generally (but not always) bonds go up. You can sell some of your bonds high and buy stocks low when you rebalance. This smooths out the volatility. With CDs, that money is locked away and doesn't go up or down except for the interest they earn. It's not available for rebalancing.

[@HappyonMonday]

@@jackdguida That's true! Because they're in an IRA and not available until I'm 59 1/2 they just didn't seem like cash to me. Thanks! 😁

[@myengs6937]

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.

[@HappyonMonday]

I keep thinking about simplifying too. I know diversification is important, but it's harder to manage! 👍

[@joemarc62]

@@HappyonMonday Diversification does not require so many accounts each with their own expenses, but a split between stock, bonds and cash. One account for each; excepting of course tax sheltered or not.

[@beautyandplay]

I’m risk adverse too. I’m now looking to learn about covered calls and selling Puts. They seem like a lower risk way to get income. But, as I said, I’m just starting to look into it.

[@HappyonMonday]

Interesting. I've not heard of those! 🙂

[@beautyandplay]

@@HappyonMonday When you start watching those videos is like you are tryin to understand Chinese.

[@HappyonMonday]

@@beautyandplay 😂

[@AverageJoeDividends]

There is definitely risk with covered calls. A lower risk for income would be an ETF like SCHD. You get close to S&P 500 gains and over twice the dividends of the S&P 500 (~1.5%) with SCHD (~3.5% yield).

[@missouri6014]

Very well illustrated like always thank you😊

[@HappyonMonday]

Thank you! ☺

[@sixstringsdaddy2477]

Vanilla investor? What a great idea, I hear the market for prime Madagascar vanilla beans is up! 😂

[@HappyonMonday]

@@sixstringsdaddy2477 😆

[@SherryA65]

Thank you for doing this!!! I recently converted my workplace accounts into an IRA. Since I was on disability all year, had no income so put a large chunk into a Roth IRA. I’m not really sure how to invest the IRA yet since market is so overpriced right now. So it’s all in a money market account at 4.55%. Did do some dividend harvesting this month which paid very well. Hoping I catch the market on a downswing when I eventually decide to invest. My Roth is long term so 33% in SCHD, QQQM and VOO for growth. IRA will be 50% bonds, 40% dividend stocks and 10% cash. I have a huge savings account with 3 years of expenses in betterment which was the bank you told me about but when interest rates go down next year will have to rethink that one☺️

[@HappyonMonday]

You're welcome! Thank you for sharing your investments! Yes, I'm hoping HYSA rates won't keep going down but they might. 😬

[@7SideWays]

It was market dependent for me. Equities right now seem frothy, debt/bonds/savings rates are high so we reallocated recently. In '22 when I retired Equities were down so we went heavy then into SPY and QQQ.

[@HappyonMonday]

Awesome - thanks for the feedback! 🙂

[@NicE-jq3wv]

You should look at your pension as your bonds and go all stocks. You’re missing out on substantial growth and those bonds are dragging your portfolio to a point that you are at great risk of running out of money.

[@HappyonMonday]

Yes, I am planning on reallocating soon. Thanks! 😁

[@tammy9964]

I, personally have an annuity. I invested $100,000 a quite a while back. I decided this year to turn on the income. I receive around $830 a month before taxes. It’s a fixed annuity, no risk in the stock market. Downside is once you give the money, you no longer really have that lump sum, so to speak. What I really like about this, I have this stream of income for life. Most insurance companies sell them and there is different varieties of them. Something to think about.

[@HappyonMonday]

Good for you! Yes, I looked into annuities a couple years ago. They work well for some people! ☺

[@jonscrivner9087]

That's almost 10% annualized. So if you died in the first 10 years, your beneficiary would continue to receive payments until the 100k was exhausted. Living longer than 10 years and you will be handsomely rewarded.

[@bunnobear]

One tip when rolling over, not sure if it is the same is the US, is not to move large sums of money in case there is a huge drop in the market after you have submitted to move money, This happened to someone I know but may be different with electronic but I still know it takes days for things to transfer :) We are 4 years from retiring, thanks to your bridging to a retirement fund, and I am saving cash. When we can access retirement accounts at 60 will be in cash and stocks only. If I have my cash pot (in bank account) for 5 I sleep well.

[@HappyonMonday]

It does take a long time to transfer funds here as well! That is a good idea! Thanks for sharing! ☺

[@tddstl3166]

I recommend that you should own some physical silver as another hedge. Gold is flying now so I would wait for a pullback on that metal.

[@HappyonMonday]

That is an option - thanks! ☺

[@travelspot06]

I agree with Gareth that you should base it on your expenses. For example are your living expenses going to be paid from your cash account, your Roth, or maybe from dividends (or interest)? If the latter, you should have ETFs or stocks that produce dividends or bonds that produce interest. If you won't need to use the dividends/interest for several years, you can either reinvest them or purchase more growth oriented stocks instead. Over a ten year period, the stock markets generally go up, so if you won't need the money for that long, you can afford to be a little more risky.

[@HappyonMonday]

Great advice - thanks! 😁

[@ThomasReedy-j6u]

In addition to asset allocation and time, you need to consider how much you are spending. They have tables developed from the trinity study that allows people to compare opinions. If you have such a low asset allocation, you are not being conservative, you’re being risky. Also, do yourself a favor and consider combining accounts via roll overs if it doesn’t impact your ability to withdraw the funds pre-59.5.

[@HappyonMonday]

Thanks for sharing! I feel that I have enough money. I live very frugally!

[@johnc4789]

I'm very conservatively all in US treasuries and foreign government debts. Long term treasury bond ETFs vary in price but have relatively stable monthly payouts. Pays my bills and covers inflation. Sleeping good without having to worry about running out of monies. Would like to put some into equities but holding off until risk is smaller, like from a significant correction.

[@HappyonMonday]

Nice! Yes I will hold off to make changes for a bit too. ☺

[@user-rc4zk1zs7g]

I would definitely be in the more "aggressive" category when I retire. I'm hoping to live a long time.

[@HappyonMonday]

Nice!! 😁

[@spencerdavies2530]

Goodness, American retirement platforms seem complicated, so much to consider. Your allocation does seem very conservative but, as you suggest, with S & P at or near all time high and an election looming, I think you'll do well to wait a while before rebalancing into more stocks. But honestly, who knows. Instead of the FOMO (fear of missing out) syndrome, if you're income from current allocation meets your requirements maybe just stick with that so you can sleep at night 😊

[@HappyonMonday]

Thanks for your input! Yes, I think America is complicated. 😆

[@robertyoung2318]

Thank you. 60/30/10 for me.

[@HappyonMonday]

That sounds like a good allocation! 😁

[@daveschmarder-US1950]

My asset allocation is set so that no matter what the market does at any one time I won't be frightened and sell or have to sell. I'm 74 with a 70/30 ceiling. Since most of my stash is in a regular brokerage account, I am sensitive to capital gains increasing my taxes. I'm still doing small Roth conversions on my smallish IRA. I started investing in 1987. Before that I had my money in CDs.

[@HappyonMonday]

Thanks for sharing!! That sounds like a well thought out plan! 😃

[@daveschmarder-US1950]

@@HappyonMonday Even with my mistakes, it all turned out well. I"m more careful now.

[@HappyonMonday]

@@daveschmarder-US1950 Yes, I want to be careful too!!

[@rmsilva1191]

60/40 seems to be a popular allocation for those on the conservative side. You're definitely not going to get the growth you need from your current allocation, especially if you want to leave your children a portion of your nest egg. Trena, from "Retire this way " is in your age group with similar expenses and portfolio size . she's approx 55% stock.

[@HappyonMonday]

Yes exactly! I'm definitely going to reallocate. It's just hard to find that perfect balance! Thank you! 😊

[@shawn4692]

60/40 stocks bonds is a wildly good for long term returns. The tough part about rebalancing right now is it feels so much like 1998 prices but what do I know (no one knows what will happen with returns) as long as you rebalance each year you would take good prices. I'm at 78% stocks but 5 years from retirement and hoping to rebalance down to 60/40 in 5 years slowly I think the key to any portfolio is determining what you can deal with in terms of holding and sleeping well at night no matter what happens but wow stocks have been crazy good since 2009 which always happens after the worst time in the market. Maybe the next 10 years international stocks will do good since international has done so poorly for the last 10 years. But clearly I don't know and no one really does. Personally I just find it good to diversify and be good to be in it all

[@HappyonMonday]

Thanks! I will definirtely rebalance to include more stocks soon. 🙂

[@bantizzle79]

Im more aggressive but still have 12 years until retirement. In your situation I would invest in a way in which you can still sleep at night and not be worried about a huge market downfall.

[@HappyonMonday]

Thank you. That's kind of what I've been thinking. It's a tough balance! 😄

[@evebenoit6368]

Dear Julie, I follow your very nice and informative channel and while I admire your candor on financial matters, I cannot help to be a little worried at the level of disclosure of your finances. I would hate for you to attract ill-intentioned people (known to you or scammers). Several channels that I follow also do this. Am I being paranoid ?

[@HappyonMonday]

Thank you! I don't disclose where my accounts are held or account numbers or anything like that, so I think I'm good. But thank you!!

[@rickybreaux2607]

I’m about 85% stocks 15% cash. Sometimes 20% cash. Just depends on how I feel the markets are doing. Retired Jan 2022.

[@HappyonMonday]

Wow - good for you! I bet you do well! 😃

[@AverageJoeDividends]

I am approximately 90% stocks and 10% cash. No bonds. I don't think I will change this allocation as I plan to live on dividends alone.

[@HappyonMonday]

Awesome! Thanks for sharing! 😁

[@mikecarlton6297]

My goal is to retire early. ASAP would be my target. 😂 But I do worry about the “conventional wisdom” of the personal finance industry. I’m not convinced that what has worked over the past 30 years will continue unabated for the next 30. This caught my eye yesterday…”We estimate the S&P 500 will deliver an annualized nominal total return of 3% during the next 10 years (7th percentile since 1930) and roughly 1% on a real basis."

[@HappyonMonday]

Right? That's the kind of stuff I keep reading too. It's scary. I wish I had a crystal ball and could see what was going to happen in the market! 😄

[@jonathanfoster2263]

what I am doing, I keep 4-6 months expenses in cash. I have all my portfolio in dividend/income paying equities at %11.5 yield. Instead of drip'ing my dividends back into the equities I am routing them to a SPAXX money market account that is liquid and pays currently %4.9 interest. As that money market position grows I will let it hit a certain amount then I will take a portion that I don't spend to by more income generating equities. My reasoning is even in a market downturn the equities I own will continue to pay dividends. This will prevent me from having to sell in a down market. IT will also allow me to purchase equities in a down market at a discount. The down side of this plan is it doesn't generate a huge amount of capital growth though there has been some growth. On the plus side the %11.5+ yield more than compensates for that. My 620K IRA generates around $72500 per year. My Roth sounds like yours, its $28000 and is %100 in the S&P500

[@Greg_7878_2]

Are you invested in individual dividend stocks or dividend funds? I'm looking to add some dividend/income paying equities to my portfolio for some downside protection but am more comfortable with the diversification of funds vs. individual stocks.

[@HappyonMonday]

That's awesome! I've heard a lot about dividend/income paying equities, I just haven't used them myself yet. Thanks for sharing! 😁

[@iczemi]

Currently I have 90% CDs 10% cash, until next summer.

[@HappyonMonday]

That's even more conservative than mine! What happens next summer? ☺

[@iczemi]

A big chunk matures. CD rates will go down (now they are locked), I have to see what happens to the markets. My risk tolerance is very very low. At the moment the markets are at all times high and over evaluated. I cannot take a 30% market drop.

[@HappyonMonday]

@@iczemi I see. Yes my CDs will mature in February. I'm hoping the market is stable at that time! ☺

[@iczemi]

❤

[@AverageJoeDividends]

I hope you did not miss out on the 38% gain the market (VTI) had over the last 365 days. It is not wise to try to time the markets. Time in the market always wins.

[@bonitahill5239]

Funny I was dealing with this question all last weekend and plan to this weekend....lol... I think I am going to lean more towards Jack Bogle 50/50 (Index/Bonds) right now I am S&P500... Bonds to me are hard to understand the best option cause my 401k does not always offer the best selections /low fees ....of course. I also do Bond Index style....You mention stocks how do you select your stock choices? Am not good with that so S&P has worked best for me... but like your quote states... I guess I will find out soon LOL!!!

[@HappyonMonday]

I currently have target funds which have both stocks and bonds. I do not pick individual stocks. But I am going to rebalance and change things up! ☺

[@bonitahill5239]

@@HappyonMonday Thank you!!! Good to know 🙂. You are so kind to reply to all your comments. Also I always Love your quotes. They really hit home each time. Thank you !!!!!

[@HappyonMonday]

@@bonitahill5239 You're welcome and thank you! ☺

[@user-rc4zk1zs7g]

You have a pension from teaching in addition to the $500K accounted for here, right? I think I'd lean heavily on the guaranteed monthly income from that and try to rebalance to a more aggressive portfolio and then avoid touching that as long as possible. If you make additional income from KZbin, etc., maybe some of that could also be invested in more aggressive assets.

[@HappyonMonday]

Yes, but my pension is only $800 per month. But, I do wnat to rebalance to be more aggressive! Thanks! 🙂

[@VTLovesSF]

@@HappyonMonday I agree with shifting to a bit more aggressive

[@HappyonMonday]

@@VTLovesSF That's my plan! 🙂

[@jmac03191961]

Interesting timing for this video - I looked at my own situation last night. I have had 4 different mutual funds with Schwab since I retired 7 months ago. Their performance has been amazing. But I had the feeling I had too much in stocks. The market has been so good for the past year, but I want to be in a good position when it inevitably crashes again. To my surprise I had 93% stocks and 7 percent cash in those mutual funds! LOL. I immediately rebalanced my portfolio, and now I am at 74 percent stocks and the rest is in fixed rate CD's earning 4+ percent depending on the longevity (3 months, 6 mos., 9 mos, 1 year)

[@HappyonMonday]

Good move! Mine were in target funds which become more conservative over time. I think that's how they ended up so conservative. 🙂

[@Greg_7878_2]

You might consider a balanced fund or blended fund of stocks and bonds instead of a target fund, something like Vanguard's Wellington or Wellesley funds. These keep a consistent percentage of stocks and bonds (one is around 65/35 and one is around 40/60) instead of adjusting the percentage over time.

[@HappyonMonday]

@@Greg_7878_2 Thank you! I will look into those! 😁

[@TheahLil]

@@HappyonMonday yes, Target date funds take the control out of your hands. I'd consider getting out of those and managing your own bonds/stocks !

[@HappyonMonday]

@@TheahLil Thank you!! ☺

[@Scott-xf5xb]

I'm thinking 50/25/25. 50% equities, 25% Bonds, 25% MM/HYSA/Cash. 5 years expenses in cash. Will sleep tight this way.

[@HappyonMonday]

Yes, that would help with sleeping at night!! Love it! 😁

[@rc2276]

One size does not fit all. Do what suits you best. Although people want conservative you need a fair amount of growth if you intend to have your portfolio to last a long while.

[@HappyonMonday]

I agree!! It's that balance between conservtive and growth. ☺

[@MJL-3093]

It may help you to research types of stocks and stock ETFs. I think dividend/value/stalwart stocks would be less scary for you than growth/risky/volatile stocks. SCHD ETF should not cause your blood pressure to elevate the way URAX ETF would. Coke or Pepsi is less scary than a new tech company that may go out of business next week. You may enjoy getting dividends from stocks! I think if you could feel more comfortable with stocks, you could go 50/50 or even 60 stocks/40 bonds. I agree with other commenters who suggest thinking of your cash/bond amounts in years. If you have cash/bonds to cover 10 years of bear markets/drawdowns you could put the rest in stocks for growth. You may live to be 99 like my aunt who just passed away. We want future Julie to have all her financial needs covered. If you leave a legacy, that's awesome! You would bless your family, charity, whoever you choose! You've got this! xoxo

[@HappyonMonday]

Great ideas - thank you!! ☺

[@macclennyh63]

Learn Rule one investing from Phil Town

[@HappyonMonday]

I'll look that up - thanks! 😀

[@FIRE_DrNinjaTurtle]

Hi Julie, I love your quote and I am putting out my retirement account numbers today. I am going to steal your quote for my Facebook page. I put out positive quotes like that over there. I am more aggressive as I have a pension and I intend to live on my pension plus maybe 1000.00 a month. I thought that you would have a pension as a teacher. How much more do you need to generate beyond your pension, if you have one. Based on your risk tolerance, I would do small ROTH conversions when you hit 59.5. You may have a retirement account that allows withdrawals before 59.5. As young as you are, ROTH is your friend. You will see in my video today that I am all about the ROTH in the future. I am 100% stocks (S&P 500) in my retirement. I am now filling ROTH buckets until 66.5 years old and I hit social security

[@HappyonMonday]

That's awesome - I love quotes too! My pension is very small - $800 a month. I have a pretty aggressive Roth and I do plan to do Roth conversions! Thanks! 😁

[@joeriveracomedy]

I take care of a handicap mom so I am getting cash dividends monthly or once every 3 months. Mutual funds are voodoo if you aren't all in.

[@HappyonMonday]

Thanks for sharing! I've had a lot of people tell me about dividend stocks. 😁

[@susanscheller9570]

I used to pick stocks that I liked. Now that I am older I pick them based on high dividend.

[@tom-ng7ci]

You stated that you are risk averse however with your allocation it seems like you're guaranteeing that you will run out of money when you get old. Just my two cents.

[@HappyonMonday]

Yes, that is my fear! That's why I need to rebalance to something more aggressive! 🙂

[@AverageJoeDividends]

@@HappyonMonday I'd look into the Trinity Study aka the 4% rule. I think they based their study on a 60% equities to 40% bond allocation.

[@HappyonMonday]

@@AverageJoeDividends Yes I'm very familiar with the 4% rule! Thanks! ☺

[@jimrinard1969]

Perhaps you should talk to an advisor just to go over some options.

[@HappyonMonday]

That is an option! Thanks! ☺

[@jimrinard1969]

@@HappyonMonday you wouldn’t have to have an advisor do your investing but just go over your plan and offer suggestions.

[@rubyus7332]

This percentage doesn’t say or do anything. For example look at your bonds. Have they been growing? If they’re just sitting and doing nothing it’s a waste of money and time. Better to buy CDs (can get them at 4% still) if you plan to use this money soon. I would compare my stock portfolio with S&P 500 performance. You’re still young and have more than 40 years to live. Don’t be afraid to be aggressive. Buy low cost ETFs and stocks of good solid companies like Microsoft, Costco, Berkshire etc. for the long hold.

[@HappyonMonday]

Yes I have CDs! Boy I don't know about more than 40 years to live! I'll be 59 in 2 months. That would put me at 99. But I will be rebalancing to a more aggresive portfolio soon. Thanks! 😁

[@williamwatson6676]

You need MSTR

[@HappyonMonday]

I haven't heard of that one. Thanks for sharing! 😀

[@williamwatson6676]

Small % for volatility

[@HappyonMonday]

@@williamwatson6676 Cool - thanks! 😁

[@Saintor1]

No risk in bonds? Everybody seems nostalgic about bonds.... the reality is that they sucked in the last 10 years (except the last year), even less than inflation!... I would hate having them in 30-40% in my portfolio. Most like BND ETF also went -10%+ in 2022.

[@HappyonMonday]

I've heard that too! 😯

[@susanscheller9570]

Why are you not just putting everything in cds and money market that has been at 5% with no risk of volatility right now

[@HappyonMonday]

I do have a lot in CDs and low risk investments. But that 5% interest is starting to drop now. I'm also hoping to make 7% growth each year. The only way to make that is having some risk. 🙂

[@thegrimmperspective]

See Rob Berger channel about buckets. I have to believe you're just fooling yourself about these buckets. You basically had indicated as such when you said, I realize that this really shouldn't be in this bucket. But if it's what makes you sleep at night. But it does essentially come down to the allocation necessary to retire comfortably with no added risk. In a down market, take from bond. In an up market, take from stocks. In either situation, you need to rebalance. You still have all of these accounts. Are they really in a different buckets? "Risk, allocation, rebalance." :)

[@HappyonMonday]

I love Rob Berger! I watch his channel all the time! Thanks! 🙂

[@Jfhelwig]

Zero bonds. Once you start getting social security that counts as fixed income and you need no bonds

[@HappyonMonday]

Yes, once I take SS I will definitely change the allocation! 🙂

[@robp9746]

The market is very overvalued at the moment. That’s why Warren Buffet is hoarding tons of cash today. A major correction will soon come and gravity will pull the market back to earth. If you’re retired and won the game, why continue to risk.? 90% of my money is in fixed income and I sleep very well at night. It took the market 25 years to recover after the 1929 crash and don’t think that can’t happen again.

[@HappyonMonday]

This is one of my biggest fears!! Part of me thinks I should do this too. Thanks for your input! ☺

[@BTCforce]

Replace your bonds w BTC and u have a chance to beat inflation. Cash is trash. Spend n fiat save n BTC

[@HappyonMonday]

Bitcoin is a little too trendy for me personally. Cash is making 5%, so I'm OK with that. 🙂

[@brianmcg321]

Not to burst your bubble, but the markets are never stabilized. There is always something causing volatility.

[@HappyonMonday]

Oh I know! Thanks! 😄

[@RS-lw9cd]

Everyone is different and have different perspectives on which asset allocation is "best" in retirement. It depends on your viewpoint and risk tolerance. You do have to keep in mind that inflation is eating away at the buying power of your money. So, even though you may have around $500k, and plan to draw down on your assets until you start taking S.S., your dwindling retirement funds will be really worth even less than what it is now. Besides inflation, which is a huge factor, especially with the current administration (Biden/Harris), you have to factor in income taxes. If the current administration gets re-elected, income taxes are going to go up (unless you are in the 10% bracket, which is income of less than $11,600 for single filers). The current administration stated that taxes won't be raised, but that is a false narrative. They will let the TCJA expire at the end of 2025. That will mean income taxes will increase for most income tax brackets by 3% to 4%. For instance, the 12% bracket will go to 15%, and the 22% will go to 25%. That is a tax increase, just by letting the TCJA expire, which they stated they will do. You also have to remember that your traditional IRA(s), 401K, 401A, 403B (etc) are dollars that are going to be taxed upon withdrawal. So, you will have tax liability on that money when withdrawn, and those will be taxed as ordinary income. I hope you have planned for this. Since I retired, I have been converting (and paying income taxes) my TIRAs to Roth IRAs, so I will have tax free income on those investments. I don't like paying those income taxes, but it will save me taxes down the road, when the TCJA expires at the end of 2025. So, keep in mind, you may have a significant amount in those plans, but Uncle Sam is going to taking his share out of it when you withdraw. As far as asset allocation, if you think your current allocation will grow enough so that you will not run low on your retirement funds and you are comfortable with that, then good. But it sounds like you are worried that your funds will not last for your lifetime. If so, you will need a higher percentage of stocks, but that means more risk, and your risk tolerance is low. That is a tough call. Only you can answer that. Personally, and this is just my opinion, if I were in your shoes, I would hold more stocks...but, since your risk tolerance is low, it should be in stocks whose companies are larger, more stable companies that pay dividends. If you do this, make sure the dividends paid are qualified dividends. Qualified dividends (and long term capital gains) do NOT have tax liability if your income is $44,625 or less as a single filer...and make sure these are in a taxable account. If they are in a tax deferred account (TIRA, 401K, etc.), the dividends will be taxable whether that are qualified or non-qualified since everything in a tax deferred account is taxable when withdrawn. And remember to keep your expenses low for your retirement assets. Select low cost index ETFs/mutual funds. High expense ratio ETFs/mutual funds really drain your profitability in your investments. Good luck.

[@HappyonMonday]

Thanks for all the information! I have planned for inflation and taxes. I wish we didn't have either, but we do! I will most likely rebalance to have more stocks. I like the idea of larger companies. ☺

[@danncorbit3623]

I am really fussy about investments. I don't want companies that make cigarettes or weapons of war. I don't want crypto because I feel that it is pretty much the currency of criminals. Other people might feel differently, and that does not bother me, as it is none of my business. But I agonize over what to invest in a lot. Sometimes the connections are hidden as to nefarious activities by a given company.

[@HappyonMonday]

I never thought about hidden connections. You must do a lot of research to figure that out! 😃

[@kevinsmith9899]

I'm in a similar boat, although with a different lens. Fundamentally, I view the stock market as a big gambling machine, based on corporations that goose short-term profits. If there were ethical funds that aligned with my views, I would invest in those, but I haven't found any. So I own almost no stocks, with lots of cash, TIPS bonds, and precious metals, plus some real estate. I have a 5-yr return of 45%, so about half of the S&P 500. I can live with that.

[@HappyonMonday]

@@kevinsmith9899 That's great! It's been interesting how different everyone's investing strategies are! ☺