So one school of thought out there is that you consider income from pensions, SS, annuities, etc., as a fixed income/bond portion of your overall allocation. Theoretically, this allows one to be more aggressive in the equity allocation of their invested portfolio. I will receive @41% of my gross salary in the form of a pension when I retire (@5 years from now), and figure to need only 57% of my current gross salary to cover all expenses in retirement, so I only need my investment portfolio to replace 16% of my current gross salary. I can likely achieve this with a mere 1.7% - 2% withdrawal rate from my expected 401k balance.
My question is -- if you were me, would this incline you to be MORE or LESS aggressive in your investment portfolio?
FYI, my current allocation is 60/40, with the equity portion being 30% S&P 500 index fund, 20% Wilshire 4500 Index Fund (essentially comprising a Total Stock Market index fund) and 10% in an international (EAFE) index fund, with 40% in U.S. Treasuries. I started out way back when 100% in equities, then as time when on I dialed back to 90%, then 80%, 70% and now 60% for the last 1-2 years. It's worked fine for me and I'm pretty comfortable with the mix, though I have considered going as high as 75% equities.
Interested in your thoughts.
