Author Topic: Rebalancing Question  (Read 3222 times)

Pooplips

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Rebalancing Question
« on: January 08, 2015, 05:58:11 AM »
I'm in the process of rebalancing my portfolio and I would like some feedback on how everyone would consider a pension in that equation.

Currently I just ignore the pension $$ amount when I rebalance. Should I be considering it "cash" in my asset allocation, continue to just ignore it or be calling it something else?

Any advice would be great.

wtjbatman

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Re: Rebalancing Question
« Reply #1 on: January 08, 2015, 07:22:41 AM »
Look at it as the Bonds/Fixed Income part of your portfolio. Based on its real value (if you retired NOW), not possible future value if you stick with your employer until you're 62.

GoldenStache

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Re: Rebalancing Question
« Reply #2 on: January 08, 2015, 07:26:16 AM »
Are you getting the pension now?  If so I would count it as cash
If you are not getting it, I would count it as bonds.

Pooplips

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Re: Rebalancing Question
« Reply #3 on: January 08, 2015, 09:00:45 AM »
No I am not receiving it now, many more years for that. The cash value of the pension is higher than my other accounts so all of those are very heavy stocks.

Considering the pension value as cash puts me at 50% cash. Need to step up the savings in my other tax deferred accounts.

Thanks guys.

Louisville

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Re: Rebalancing Question
« Reply #4 on: January 08, 2015, 01:44:44 PM »
I take a different approach to the value of a pension in my asset allocation: I ignore it.
Since I have no control whatsoever over what sorts of investments are inside the pension, I treat it like social security in my overall retirement planning. Whatever I get from it is gravy.

BarkyardBQ

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Re: Rebalancing Question
« Reply #5 on: January 08, 2015, 02:03:54 PM »
I take a different approach to the value of a pension in my asset allocation: I ignore it.
Since I have no control whatsoever over what sorts of investments are inside the pension, I treat it like social security in my overall retirement planning. Whatever I get from it is gravy.

+1

If it's there my pension will heavily subsidize my retirement by about half of our expenses, inflation included, at age 60. If it's not there, oh well, our plan doesn't require it.

Kaspian

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Re: Rebalancing Question
« Reply #6 on: January 08, 2015, 02:33:27 PM »
I take a different approach to the value of a pension in my asset allocation: I ignore it.
Since I have no control whatsoever over what sorts of investments are inside the pension, I treat it like social security in my overall retirement planning. Whatever I get from it is gravy.

+1

If it's there my pension will heavily subsidize my retirement by about half of our expenses, inflation included, at age 60. If it's not there, oh well, our plan doesn't require it.

+2

I have a pension coming to me eventually. I don't include it in either my allocation strategy or in my net worth statements.

wtjbatman

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Re: Rebalancing Question
« Reply #7 on: January 09, 2015, 03:54:26 PM »
I take a different approach to the value of a pension in my asset allocation: I ignore it.
Since I have no control whatsoever over what sorts of investments are inside the pension, I treat it like social security in my overall retirement planning. Whatever I get from it is gravy.

+1

If it's there my pension will heavily subsidize my retirement by about half of our expenses, inflation included, at age 60. If it's not there, oh well, our plan doesn't require it.

+2

I have a pension coming to me eventually. I don't include it in either my allocation strategy or in my net worth statements.

You will eventually.

I mean seriously. Say you estimate your retirement expenses at 50k a year. You calculate SS will give you 20k a year. You need to make up 30k. What if you have a 20k a year pension? That means you only need a stash that generates 10k a year, rather than one that generates 30k. That's quite a difference in amount of $$ you will have to save and length of time it will take to save it. I know that if I knew I had a pension coming that would cover X amount of my expenses, I wouldn't spend an extra 5 or 10 years working just because I don't feel like including my future pension.