This post caught my attention as it’s taken me a while just to get the nerve to get to to my current 60/40 (VT and rest half TIPS half Tbills/nominals) and realizing I probably ought to be even more aggressive at 47. I also noticed you have a way of presenting the math in a clear way and was hoping you didn’t mind offering any suggestions for me.
The best odds tend to be stock heavy accumulation and risk reduction for decumulation. You simply don't know ahead of time if you are a good or bad accumulation sequence so taking the 3.6% chance of outperformance with 60/40 and 96.4% chance of underperformance is typically an increase in your personal risk.
When you include accumulation and decumulation there is not a great risk based argument for something like 60/40 in accumulation. Of course we can take on more risk for behavioral reasons but the 60/40 crowd may be taking more risk than the 80/20 crowd.
Wife and I are at about 12x (plus paid off house and equity in firm) but saving 2x the last couple of years which I expect to continue until 60 and then maybe 1x for another 15 years working part time. I suspect I’m being way too conservative but also wary of the current market. Thanks!
Statistics: Posted by Joey Jo Jo Jr — Mon Jul 08, 2024 2:30 am — Replies 73 — Views 7093