Some would say that corporates are unnecessary, but I keep 10% to 15% in my portfolio, which is in line with the aggregate bond market, assuming a 50/50 portfolio. If 14.5% of those are exposed to AI and they take a 50% hit in a downturn, the total impact to my portfolio might be 1%. I figure the impact of AI on my bonds will likely be small. So, whatever you decide about your allocation, the effects of an AI meltdown on your bonds will probably be minimal.
And furthermore, why does every account type have a different contribution limit? A SEP may be up to $70K, 401(k) is $23.5K and a SIMPLE is $16K. If I don't have access to any of those through an employer or self-employment, I can make a maximum contribution of only $7K!? Creating one account type for all would be an obvious solution.
I agree Mark. I don't know if I deserve to receive any social program money, e.g. social security, but I have paid the required taxes and expect to receive the legislatively established payments. I'm not sure how being more in need of the money makes you more "deserving" of it. If congress wants to change the payouts or make the system more progressive, they can change the laws and probably will (eventually). For the record, I believe I have already received more from this life than I deserve.
William, I appreciate you running through the actual numbers. Though not 8%, a guaranteed 5% is pretty good! I personally prefer to look at delayed claiming as longevity insurance (an annuity), particularly for the higher earning spouse. In your example, I can "buy" an annual inflation adjusted payout of $2,880 for $36,000 (8% payout ratio). Commercially available joint life annuities for two 70-year-olds currently payout about 7.2%, without inflation adjustments as they aren't offered. So, if you frame it as an annuity/ insurance, delayed claiming appears to be a good deal. Wade Pfau has done some good work in this area. His "Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success" is an excellence reference.
Ed, from an actuarial standpoint, I believe you are correct. Assuming an average lifespan, you should receive the same benefit whether you begin collecting social security at 62 or 70. However, for those in good health and who can afford to wait, there may be benefit delaying and collecting a larger guaranteed lifetime income with inflation adjustments.
Does the government direct the investments, and if so, are there concerns about corruption and other mischief with workers' funds? When similar plans are discussed every few years in the US, my first thought is usually, what could go wrong with having government officials directing our investments...?
Greg, will you have any form of guaranteed income when you retire (e.g. social security (in the US), pensions and/or annuities)? If you have enough steady income to cover the basics, 100% equities could work out well. However, if you will be using those funds for living expenses in retirement, some cash and short-term bonds could save you from selling stocks in a down market. We were pretty aggressive with our investments until about five years prior to retirement, when I started to add some fixed income (now about 45%). But in our case, we will be living off the portfolio exclusively until we collect social security. I plan to ramp up our equity holdings once we begin social security. Ken
We handle our finances as a household and I manage them. When I retired about a year ago, we consolidated all of our investment accounts at Fidelity. I keep a financial spreadsheet that makes quarterly rebalancing to 55% stock/ 40% bond/ 5% cash very easy. We keep slower growth bonds and cash in the pre-tax accounts. Ken
I am about five years behind you and also following the "wait until we turn 70" plan for my social security benefits (67 for my wife). My thinking is that foregoing eight years of payments purchases me an inexpensive annuity with COLA. I built a TIPS ladder to replace the "missing" social security payments until I claim. Have you done anything to bucket, or separate, those funds from your retirement accounts? I realize that this amounts to mental accounting, but removing the TIPS ladder from the total helps me more freely spend from the balance of my accounts. I agree with the others. Build the porch!
Comments
Some would say that corporates are unnecessary, but I keep 10% to 15% in my portfolio, which is in line with the aggregate bond market, assuming a 50/50 portfolio. If 14.5% of those are exposed to AI and they take a 50% hit in a downturn, the total impact to my portfolio might be 1%. I figure the impact of AI on my bonds will likely be small. So, whatever you decide about your allocation, the effects of an AI meltdown on your bonds will probably be minimal.
Post: Which bond fund?
Link to comment from December 6, 2025
And furthermore, why does every account type have a different contribution limit? A SEP may be up to $70K, 401(k) is $23.5K and a SIMPLE is $16K. If I don't have access to any of those through an employer or self-employment, I can make a maximum contribution of only $7K!? Creating one account type for all would be an obvious solution.
Post: IRS Notice 2025-68 – I’m trying to understand an aspect of the new tax law
Link to comment from December 5, 2025
I agree Mark. I don't know if I deserve to receive any social program money, e.g. social security, but I have paid the required taxes and expect to receive the legislatively established payments. I'm not sure how being more in need of the money makes you more "deserving" of it. If congress wants to change the payouts or make the system more progressive, they can change the laws and probably will (eventually). For the record, I believe I have already received more from this life than I deserve.
Post: What do you DESERVE?
Link to comment from December 2, 2025
William, I appreciate you running through the actual numbers. Though not 8%, a guaranteed 5% is pretty good! I personally prefer to look at delayed claiming as longevity insurance (an annuity), particularly for the higher earning spouse. In your example, I can "buy" an annual inflation adjusted payout of $2,880 for $36,000 (8% payout ratio). Commercially available joint life annuities for two 70-year-olds currently payout about 7.2%, without inflation adjustments as they aren't offered. So, if you frame it as an annuity/ insurance, delayed claiming appears to be a good deal. Wade Pfau has done some good work in this area. His "Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success" is an excellence reference.
Post: THE REAL RETURN ON DELAYING SOCIAL SECURITY
Link to comment from November 13, 2025
Ed, from an actuarial standpoint, I believe you are correct. Assuming an average lifespan, you should receive the same benefit whether you begin collecting social security at 62 or 70. However, for those in good health and who can afford to wait, there may be benefit delaying and collecting a larger guaranteed lifetime income with inflation adjustments.
Post: THE REAL RETURN ON DELAYING SOCIAL SECURITY
Link to comment from November 13, 2025
Does the government direct the investments, and if so, are there concerns about corruption and other mischief with workers' funds? When similar plans are discussed every few years in the US, my first thought is usually, what could go wrong with having government officials directing our investments...?
Post: The rules we didn’t follow
Link to comment from October 31, 2025
Love it!
Post: A Nightmare on Destitution Street
Link to comment from October 31, 2025
Greg, will you have any form of guaranteed income when you retire (e.g. social security (in the US), pensions and/or annuities)? If you have enough steady income to cover the basics, 100% equities could work out well. However, if you will be using those funds for living expenses in retirement, some cash and short-term bonds could save you from selling stocks in a down market. We were pretty aggressive with our investments until about five years prior to retirement, when I started to add some fixed income (now about 45%). But in our case, we will be living off the portfolio exclusively until we collect social security. I plan to ramp up our equity holdings once we begin social security. Ken
Post: The rules we didn’t follow
Link to comment from October 29, 2025
We handle our finances as a household and I manage them. When I retired about a year ago, we consolidated all of our investment accounts at Fidelity. I keep a financial spreadsheet that makes quarterly rebalancing to 55% stock/ 40% bond/ 5% cash very easy. We keep slower growth bonds and cash in the pre-tax accounts. Ken
Post: How do Couples Rebalance with Multiple Accounts
Link to comment from October 29, 2025
I am about five years behind you and also following the "wait until we turn 70" plan for my social security benefits (67 for my wife). My thinking is that foregoing eight years of payments purchases me an inexpensive annuity with COLA. I built a TIPS ladder to replace the "missing" social security payments until I claim. Have you done anything to bucket, or separate, those funds from your retirement accounts? I realize that this amounts to mental accounting, but removing the TIPS ladder from the total helps me more freely spend from the balance of my accounts. I agree with the others. Build the porch!
Post: Waiting Until We Turn 70
Link to comment from October 22, 2025