That's mixing two time frames: being near retirement and being young. As a young investor starting to accumulate, you don't need much bonds for the very reason you stated: you make up for losses by purchasing more each year. But I would even advise a person in their first year of working to have some bonds (even 5%) to get into the habit of having bonds in your portfolio.
One problem with the 100% stocks retirement is that you can't count on your retirement assets. If the stock market plunges 20%, do you have to delay retirement and keep working? If you just retired, a stock correction also means your spending eats away at your portfolio faster than you expected.A 20%+ drop would make me want to keep working a bit longer even if I didn't need to but I'm still pretty young so OMY isn't much of a sacrifice. Basically, if you can keep buying after a large dip, you've eliminated a lot of the early retirement sequence of returns risk and I can't pass up a good sale.
Unlike you, OP is closing in on retirement. For those wanting to fix their date of retirement and avoid delaying it, bonds can help soften the impact of market corrections. That's why Vanguard holds 28% bonds in a target date fund aimed for those retiring in 13 years.
Not really, can be both young and near retirement (planning on FI in 2022 at age 37 but will likely work part time at current job a few years after that because I like it and pays well).
The point is that if someone is retiring even a bit early that a 20% drop in stocks is a pretty good excuse to keep working another year or two. There are situations where this wouldn't work (e.g., health issue forcing early retirement) where having more bonds would be smart.
Now, if like you said, they have significant bonds then they could just rebalance into stocks at that time but then they would lose some protection against any further drops in the near future until stocks recovered enough to rebalance or they have another source of income to buy more bonds.
As I've said earlier, bonds are necessary and useful, especially if your intention is to never work again or if you're retiring closer to traditional age. However, if you are willing and able to work a bit then their utility drops for someone retiring at an earlier than normal age.As an early retiree, we're in a weird position where age wise we are still in the accumulation phase but we also need to preserve. How one chooses to do that (e.g., bonds, buying rentals, or working a side hustle) has a lot of flexibility. Key thing is diversifying but it doesn't have to be low return bonds.
Edited: Mustacheandahalf, I read one of your other posts and I really think we're saying the same thing in general. I think the difference is how we define retirement (shocking, right?). In the case of this OP, your view of never having to work again might be more right since they are aiming for retirement at 58. I view retirement as not having to work for money but will likely make as much or more after I retire than before. For people like me, we don't actually enter the preservation phase for several years after we no longer need to work. Also, the extra money has value to me because I would like to endow a scholarship fund of some sort and selfishly buy a new Tesla every few years. I think this is the key difference.
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