Hey All,
I've been helping the 'rents plan their retirement portfolio, and, after going through the historical analysis, I don't see why having a high bond proportion makes much logical sense. In fact, if you make the following assumptions, a 80%-100% stock portfolio is quite reasonable.
Assumptions:
1. The bond and stock market from 1926-2015 will repeat itself.
2. The retiree is interested in withdrawing a fixed amount yearly (inflation adjusted) from their original investment.
3. The retiree is not scared of dips in the market and is only interested in maximizing #2 over their lifespan.
4. The retiree does not need emergency funds (isn't this what insurance is for???)
I've made an interactive chart to illustrate the scenarios.
It can be accessed here. As you can see, 30-year failure rates are minimal (and actually optimized) with a mostly stock portfolio. Furthermore, by going mostly stocks, you have the chance of being able to spend a bit more money (and leaving more money) as you approach the end years. (The analysis uses historical data of total returns of the S&P 500 and 5-Year Treasuries)
Would love to hear any comments!