Author Topic: Help me with asset allocation for my folks  (Read 1291 times)


  • Stubble
  • **
  • Posts: 166
Help me with asset allocation for my folks
« on: September 15, 2016, 09:16:49 AM »
So both of my parents  finally call it quits and retired.
My father has been retired since he was 62 and my mom retired this summer.
My mom has asked me to help her to invest her assets from 401K and I was happy to do it by setting up IRA account with Vanguard and investing in some index funds and bonds.
She has been always aggressive investor and most of her assets have always been in stocks, but now that she is retired I felt that she needed more bonds in her portfolio so I invested 70% index funds and 30% bonds.
Do you think it's still too aggressive and risky for her age and I should maybe do 60/40 or even 50/50?
I spoke to her on numerous occasions and she understands risks involved, but like many retired people she is scared running out of money and does not want to invest too conservative. Their combined assets are at least 1 mill(investments, cash, real state etc.) so I don't know what she is worried about.


  • Walrus Stache
  • *******
  • Posts: 8534
  • Location: Bay Area at heart living in the PNW
    • The Best Is Yet To Come
Re: Help me with asset allocation for my folks
« Reply #1 on: September 15, 2016, 11:05:00 AM »
I think we need some more info here. What are their total assets and in what forms? What are their expenses? Do they get pensions? Social security? How long are they likely to live? What is their current withdrawal rate?

Personally I think your mother has a point, but for someone already in their 60s this is less of a concern than for an early retiree. If they have a good portion of their expenses covered by something like pension and social security (effectively annuities, or something like bonds) then they can afford to take more risk with the rest of their assets. You can run various scenarios with cFIREsim to see how different allocations fare over time. I suspect they will all be fine and if her preference is to have more stocks, then let her sleep peacefully at night.


  • Walrus Stache
  • *******
  • Posts: 5626
Re: Help me with asset allocation for my folks
« Reply #2 on: September 15, 2016, 01:27:41 PM »
Would need to know withdrawal rate - the percentage of retirement assets being spent each year.

A withdrawal rate of 5% or so could be trouble, but if it drops when social security kicks in that can help.  Generally 30-50% bonds is reasonable.  Too few bonds and expenses during a stock crash harm your retirement... too few stocks and it doesn't keep pace enough with expenses.


Wow, a phone plan for fifteen bucks!