Author Topic: Bond funds for IRA  (Read 1467 times)

ObviouslyNotAGolfer

  • Stubble
  • **
  • Posts: 247
Bond funds for IRA
« on: December 13, 2017, 08:21:53 PM »
We need to re-balance my wife's portfolio at Schwab. I read the Bogleheads book a while ago and it said that you should "own your age in bonds"--do people here buy that advice?

In any case, she and I are probably about 15 or so years away from retirement (I actually enjoy my work as a scientist a great deal, if not where I live--I hate and detest SoCal).

What would you recommend for a no-load, index bond fund for someone going to retire in about 15 years? We want something fairly conservative (not up for risking too much principal) with a decent yield.

Thanks!

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1700
  • One Does Not Simply Work Into Mordor
Re: Bond funds for IRA
« Reply #1 on: December 13, 2017, 10:48:56 PM »
Your age in bonds is too conservative. 10%-40% is generally the optimal range. Perhaps start at 10% now and then build to 40% over the next 15 years, then work back to 20% over the 10 years after you retire. Especially in an IRA where you are keeping the money you won't use for a long time, bonds don't seem as useful to me at this point.

SWAGX is Schwab's new generic bond fund. There are more options in ETF's, but not all of them are good, you would need to do some research. CD's are another option, it looks Schwab has brokered CD's at 2.5% which is similar to the bond fund (but Vanguard has CD's at 2.688%).


Laserjet3051

  • Pencil Stache
  • ****
  • Posts: 808
  • Age: 91
Re: Bond funds for IRA
« Reply #2 on: December 14, 2017, 10:07:18 AM »
I'm also a scientist who does not like living in socal currently, hoping to break out some day, and I have ~15 years to retirement. Most of my bond investments are in an intermediate bond fund at VG (VBTLX) but I also have Schwabs intermediate term bond ETF SCHZ, seems like a good choice, and ER is only 4 bp.

Radagast

  • Handlebar Stache
  • *****
  • Posts: 1700
  • One Does Not Simply Work Into Mordor
Re: Bond funds for IRA
« Reply #3 on: December 14, 2017, 08:07:47 PM »
I'm also a scientist who does not like living in socal currently, hoping to break out some day, and I have ~15 years to retirement. Most of my bond investments are in an intermediate bond fund at VG (VBTLX) but I also have Schwabs intermediate term bond ETF SCHZ, seems like a good choice, and ER is only 4 bp.
FYI, SWAGX is Schab's new aggregate bond mutual fund with ER=0.04%. Basically the MF version of SCHZ.