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https://www.wsj.com/finance/investing/yale-james-choi-portfolio-formula-stocks-02a96afb?st=z9cUhj&reflink=desktopwebshare_permalink
(From the WSJ a few days ago (HT Barry Ritholz))
“Yale University finance professor James Choi recently developed a formula that recommends an asset allocation based in part on your age, income, savings and risk tolerance. The formula is drawn from a paper he co-authored last year and was adapted for The Wall Street Journal.
In many scenarios, the formula recommends a more aggressive, stock-heavy portfolio than other popular guidelines.”
It includes a spreadsheet – and for me (66 and retiring soon) and my wife it recommended a 75% equity portfolio share. The WSJ article (I used one of my free share links above – not sure how that will work here) compares his results to the Vanguard Target and age-minus-100 formulae.
A Morningstar’s article a while ago argued that with bonds projected to pay more you going forward you could significantly decrease your equities allocation I believe to as low as 40% with minimal loss of returns.
https://www.morningstar.com/retirement/whats-safe-retirement-withdrawal-rate-2026
Interesting. I had seen this article but still had to look pretty hard just now to find what led you to that conclusion, as it’s not really stated in the article. For anyone else looking, it’s in the chart labeled Starting Safe Withdrawal Rate %, by Asset Allocation and Time Horizon.
I had posted earlier that I would try to find the specific article, but that chart was the closest I could find.
Great timing. I feel this is a case in point of the rule of thumb. If you have a proper plan your asset allocation will naturally flow from that plan, no guessing or heuristics required.