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I am getting ready to turn 50 and I would like to know what…

second opinion] I am getting...
second opinion] I am getting ready to turn 50 and I would like to know what my stock / bond mix should be for my retirement account.
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Answered in 26 minutes by:
3/14/2018
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,628
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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What you're talking about is the new life model (subtracting your age by 120 to figure out how much of your portfolio should be allocated towards stocks)

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Again FAR to simple AND assumes that bond prices are always safe ... I could get there a little more quickly, if you're talking about holding bonds to maturity, where the inverse relationship between bonds and rates doesn't apply - becasue you will always get your $1000 back (face value of the bond).

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And you've still left your risk tolerance out of the mix and NO ONE should answer that question without factoring the resulting answer with your tolerance for risk.

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But see the attached for the resulting allocation (based on modern portfolio theory) when I make the assumption that your risk tolerance is the same as other 50 year olds.

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See the attached ... Now, I'll move you up a notch in risk tolerance

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Now, a little higher than average risk (note how, in both, short term and intermediate term bonds are the bond proxy)

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You may want to substitute that with other more fixed instruments OR actually hold those bonds rather than using bond funds

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Finally, a little higher level of risk, but still within a couple of standard deviation on the bell curve of risk for 50 year old's nationally

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Spend some time with these ... hope that gets you closer to what you were looking for.

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But again, recommending a mix simply based on age is really doing the individual a disservice.

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As an example, I have some clients that know that they'll likely only use growth ( and not even all of it) in the portfolio and are simply leaving a legacy ... In that situation I'd recommend something more like this.

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(understanding that the portfolio will change as we get closer TO retirement, pulling the equity into cash buckets as we move closer, at points where return on those dollars is solid, so that the actual income is being pulled from cash rather from equities at a time when equities might be down)

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Customer reply replied 4 months ago
My plan is to live off the income from the rental properties while still growing my real estate portfolio. I expect to be using the stocks and bonds as a place to reinvest rental income UNTIL there is enough and I can buy another property.I own my entire rental real estate portfolio without any mortgages.

Then quite honestly I'd err toward that last allocation I showed you.

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Customer reply replied 4 months ago
Betterment Portfolio
Customer reply replied 4 months ago
Stocks / Bonds Position
Customer reply replied 4 months ago
Stock ETF Portfolio
Customer reply replied 4 months ago
Bond Portfolio
Customer reply replied 4 months ago
Looks like I am in line with your recommendation

Yep you're right there! 90/10

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Customer reply replied 4 months ago
Do you know Betterment? They primarily us Vanguard ETS and they maintain the 90/10 automatically and they keep the fees low.

I do ... they're fees are OK, wouldn't call them low

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Customer reply replied 4 months ago
I had been paying 1% a year to my advisor
Customer reply replied 4 months ago
Are you just against Robo Investing?
It’s ok for many ... I think that an adviser who brings more to the table than an algorithm, and understands taxes, estate law, contracts, business owner issues, risk management & retirement planning can provide value. Depends on the individual. 1% is too much for investment advice alone in my opinion
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Customer reply replied 4 months ago
I completely agree with you. I am a salesman by trade and I say it this way... “In the absence of VALUE ... the only differentiator is PRICE”. I guess I just had the wrong advisor which drove me to Robo Investing

Sorry ... just got back from picking up my wife at the airport .. and in Atlanta (especially with a 6:00 arrival) that's an endeavor.

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Yes, very well put.

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If you'd like to talk further, I can one of the additional services offers for a small amount and that will give us a way to share contact info confidentially.

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Otherwise, would appreciate a positive rating here ... that's the only way they'll credit me for the work

Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,628
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane
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