Time To Rebalance?

Last week, Anne Tergerson of The Wall Street Journal penned the article “America’s Retirees Are Investing More Like 30-Year-Olds.” (Subscription might be required).

According to Vanguard, nearly half of 401(k) investors over 55 actively managing their money “held more than 50% of their portfolios in stocks.”

On top of that, “in taxable brokerage accounts at Vanguard, one-fifth of investors 85 or older have nearly all their money in stocks.”

Having all your money in stocks in retirement might not matter if you are a millionaire living on Social Security and a company pension.

Having all your money in stocks but needing periodic portfolio withdrawals to meet your monthly burn rate, carries a big risk.

For most of the past decade, with interest rates so low, investors have been reluctant to rebalance stocks to bonds.  

Now, with interest rates at respectable levels, does common sense (and your financial plan) suggest a rebalance back into bonds?    

Vanguard implicitly suggests it might be time, with its 10-year forecast listed here.

Stay tuned – in the coming weeks we will explore the nuances of bonds, and factors to weigh when deciding to rebalance to an allocation that is right for you.  

Looking for More Guidance?

I've spent my career helping clients determine correct portfolio allocations and rebalancing strategies for their lives. If you have $1 million or more of investible assets and are in or close to retirement, let's connect and strategize your best move forward.