Daily FI discussion thread - November 11, 2018

Have you looked into Vanguard life strategy funds for your IRA holdings? Similar to target date but they do not change in allocation. Unless you are planning to stay with your company until you are in your 50s, I would focus less on the 401k funds and just ensure what you are currently investing in is matching your desired asset allocation while you are accumulating.

The trinity study is a nice starting point, but it should not be taken as an absolute. One the study only focuses on US assets, thus holding international (which most TDFs hold) throws those numbers out the window or at best throws them into question. The SWR to the study is not flexible and assumes a success is also having less than $1 dollar in your account at the end of 30 years.

Other studies show for those holding international, or are not US based and or looking to live past 30 years in retirement, ~3-3.5% is where you want to target. Anything extra is a bonus on top.

My own take: 30/70 is pretty high in bonds, at that point you become at the mercy of inflation risk and duration/credit risk. Personally, I find the 'glidepaths' for virtually all target date funds to be overly conservative. A 25-30 year old isn't likely to benefit from having 10% in bonds, for instance; there will not be a significant decrease in fund drawdowns, and this will merely serve as a drag on portfolio returns for 40 years. Further, most of these target date funds as you noticed ends at 30/70, which is outside the recommended ranges suggested by various safe withdrawal rate research.

I think that a good argument can be made to be 100% equities until you're 10-15 years from retirement (assuming you can tolerate the volatility), then begin moving to something like a 60/40 portfolio and staying there indefinitely or perhaps even increasing your stock allocation after the first decade of retirement. If you just can't deal with the volatility of an all stock portfolio during your accumulating years, then I think that a 60/40 AA for life is likely to be fine. No muss, no fuss, no glidepath, and no need to ever change are definitely appealing.

Vanguard life strategy funds would then come into play here.

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