Vanguard target retirement funds

jamesd

ex-pat_scot wrote: »

there does seem a certain default position of either 50:50 or 60:40 equities: bonds in the retirement modelling plans for the Wade-Pfau modelling.

That's because that's what has traditionally been recommended, not because it's best.

More recent research found that 100% equities produced the highest success rates/incomes but then along came Guyton's work on sequence of return risk taming that varies the equity allocation and produces better results than a normal mix. So I'd suggest what Guyton found or higher equities but still adding bonds with the same sort of trigger rules he uses or that are used in the other research he mentioned.

ex-pat_scot

jamesd wrote: »

That's because that's what has traditionally been recommended, not because it's best.

More recent research found that 100% equities produced the highest success rates/incomes but then along came Guyton's work on sequence of return risk taming that varies the equity allocation and produces better results than a normal mix. So I'd suggest what Guyton found or higher equities but still adding bonds with the same sort of trigger rules he uses or that are used in the other research he mentioned.

I'm with you there - there's no bonds in my accumulation pot, and lots in the "adventurous" side of the risk appetite.


My planning is that I expect to be rather flexible around both the timing of my withdrawal from paid work, and that it can be a gradual rather than abrupt stop (in my company, and in my general line of business, there are lots of experienced semi-retired people, working as contractors and picking & choosing short pieces of work.)
I thus have the luxury of stopping or slowing when the time feels right - a combination of pot value, personal circumstances (family illness/ caring duties?), economic outlook etc. This means I can be quite aggressive in my investment strategy.


I'm also expecting to go into drawdown rather than annuity, which means that some of my investments won't be crystallised for another 30 to 40 years.


For others, I would expect a rather more cautious approach. If the pot is of modest value, then I would expect that volatility / losses be hugely detrimental and thus a more balanced portfolio be appropriate. Similarly if circumstances dictate a fixed end date or annuity then I'd also expect a markedly different approach than mine.