Daily Money - The Case Against the 60/40 Portfolio

The 60/40 portfolio has been the default for decades, but some experts recommend rethinking the rule. After all, times have changed. We have Bitcoin now! Even if you’re not buying cryptocurrency — I sure as heck am not — there are other alternative assets these days. Plus, the 60% stock and 40% bond allocation might not represent the ideal balance of risk and reward that it once did. That said, the 60/40 portfolio has its defenders. Learn about the debate in today’s edition.

Best wishes,
Elizabeth

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I retired in 2019 at age 62. Once retired, I played tennis on three different teams but then a knee injury forced me to take up pickleball instead, and I am enjoying this new sport very much. 

I have been taking French (for free) at Georgia State University. I have taken drawing and watercolor classes at the local Osher Lifelong Learning Institute. I also have a piano and like to play and practice for relaxation. 

My unrealized goal, which I assume is the same for many other retirees right now, is to travel extensively. I feel cheated out of a year because I am in good health and mobile and, as we know, that only lasts for so long. 

Very true. Do you have any advice for people as they prepare for retirement?

I maxed out on the 401(k) contributions every year for 27 years. My employer only contributed up to $900 every year to the 401(k) because they offered the pension to us. I have not started taking Social Security yet and plan to wait until age 70.

I discovered a blog called "How much Can I Afford to Spend in Retirement," which I highly recommend because they have great Excel spreadsheets that help you make the critical decision of how much to take out of your 401(k) each year.
 
In retirement, I found that I returned to those things I enjoyed as a kid: tennis, piano, learning, and art. I recommend that folks getting ready for retirement think back to what they loved doing as a kid because when you are retired, it is like you are a kid again with all that wonderful free time you enjoyed in those lazy days of summer.

That’s a lovely and helpful thought. Anything else you wanted to say?
 
I wish I had allocated more into the Roth vehicle inside my 401(k). It was all allocated into the traditional 401(k); this means when I have to take RMDs along with Social Security and the pension, I will be paying quite a bit in federal taxes and Medicare premiums once I turn 71 ½. For those not yet retired, think carefully about where to put your 401(k) savings for tax purposes.

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