# What are you going to do with your portfolio after you retire?



## archanfel (Apr 7, 2009)

Let's say you got enough saved and you are ready to retire. Would you:

A) Convert everything to fixed income even if you would not need all of it. 
B) Keep the 100 - age, asset allocation ratio (or whatever ratio you use).
C) Convert enough to fixed income to generate retirement income, leave the rest in equity.
D) Move everything to equity


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## FrugalTrader (Oct 13, 2008)

archanfel said:


> Let's say you got enough saved and you are ready to retire. Would you:
> 
> A) Convert everything to fixed income even if you would not need all of it.
> B) Keep the 100 - age, asset allocation ratio (or whatever ratio you use).
> ...


In "The New Retirement", Dr. Sherry Cooper endorses a 50/50 bond/equity allocation during retirement based on a 4-5% withdrawal rate for approximately 30 years.


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## CanadianCapitalist (Mar 31, 2009)

archanfel said:


> Let's say you got enough saved and you are ready to retire. Would you:
> 
> A) Convert everything to fixed income even if you would not need all of it.
> B) Keep the 100 - age, asset allocation ratio (or whatever ratio you use).
> ...


I haven't thought this through yet, but my answer would probably be C. I'm hoping for an early retirement with a 60/40 stock/bond split throwing off enough income to support us.


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## archanfel (Apr 7, 2009)

CanadianCapitalist said:


> I haven't thought this through yet, but my answer would probably be C. I'm hoping for an early retirement with a 60/40 stock/bond split throwing off enough income to support us.


Does that mean that the 40% would be enough to generate enough income for you?


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## CanadianCapitalist (Mar 31, 2009)

archanfel said:


> Does that mean that the 40% would be enough to generate enough income for you?


Plus the dividend income thrown out by the stock portion. I am hoping the entire portfolio will provide a yield of around 3%. That's my thinking now anyway but our retirement is more than 20 years away.


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## Rickson9 (Apr 9, 2009)

Although my wife and I are in our 30s we could probably retire. If we did, we would keep everything (outside our RE properties) in equities (ie individual stocks).

For us, we've been conditioned through positive reinforcement that nothing beats the ease and wealth-generation ability of direct stock investment.


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## mfd (Apr 3, 2009)

I'm hoping to convert the the TFSA portion to fixed income. At the same time I'll start tearing down the RRSP (which will be all equities) portion to continue contributing to the TFSA and increase my fixed income portion so that its large enough to sustain me. From there I'll continue to tear down the RRSP and move the money into the TFSA to purchase equities.


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## Maple_Leaf (Apr 20, 2009)

*My Retirement Budget to Guide Investment Strategy*

I'm not there yet, so I may change my mind. I'll probably budget for my first one or more retirement year(s) into two expense categories, controllable and uncontrollable. Things like property taxes, provision for income tax, shelter expenses, etc. would go into uncontrollable. Things like travel, entertainment, etc. go into controllable.

I would forecast my annual uncontrollable expenses and annuitize an amount to cover them. The annuity would include CPP, OAS and a private life annuity, if required.

I would use a diversified portfolio of CDN dividend stocks to cover the expected controllable expenses.

Finally, any remaining funds would go into a diversified global stock portfolio as contingency or mad money.

There are many ways to do this but the basic strategy is to annuitize the funding for your fixed expenses.


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## Mike H. (Apr 15, 2009)

I would look at my spending, both required and reasonable discretionary, and figure out what I will need to withdraw from my savings over a five year period. I would keep this amount in pretty darn risk free investments - T-bills and short term Gov't bonds. The remainder would go into cheap passive equity funds. 

Then I would review and possibly re-balance annually. If equities have outperformed their long term average, say above 10%, I would re-stoke my cash reserves, selling equities and buying T-bills. If they haven't; I'd leave them alone. I would never re-balance back the other way - selling T-bills to buy equities.

Depending on the asset allocation, and whether the portfolio is currency hedged, a person using this "portfolio immunization" strategy would have been selling equities annually from 2003-2006. They would have been living on their cash reserves in 2007 and 2008; and would have about 26 months remaining now for markets to recover before they may be forced to sell equities at a loss.

Back testing this strategy shows it isn't perfect, but it's pretty darn good. I've been doing this with my retired clients for about 10 years, and they seem generally pleased. As an advisor, it's good to be able to tell clients that the market losses are only paper losses until you are forced to sell; and you won't be forced to sell for X number of years.


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## ethos1 (Apr 4, 2009)

archanfel said:


> Let's say you got enough saved and you are ready to retire. Would you:
> 
> A) Convert everything to fixed income even if you would not need all of it.
> B) Keep the 100 - age, asset allocation ratio (or whatever ratio you use).
> ...


What portfolio 

For a moment though, supposing it was $1,000,000 in todays money, I'd keep it in cash and draw what I (we) need over & above government OAS benefits - that should last us till we're 80+

With interest rates the way they are today & knowing my luck it will be to liquidate everything to cash & stash it under the mattress, maybe an offshore account or a big hole in the wall safe


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