Quote:
Originally Posted by retiredguy123
40 percent of my portfolio is in stocks, 60 percent in bonds and cash. Are you suggesting that retirees should put all of their retirement funds in stocks to keep up with inflation?
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There is no shortage of not only different OPINIONS but people in different financial situations. Our current situation the CPI consumer price index is now running roughly 10%. We all pay that after taxes.
To be even I need to make roughly 13% on my savings. This year I've done less than half of that. Bonds and cash surely will not yield 13%. Any interest on bonds or cash is taxed at your highest tax rate. Average age in the villages is 70. Assuming some, many people have an IRA, 403B or whatever other codes there are will be forced to take required minimum distributions at 71. That is taxed at your highest tax rate. It is the wrong place to hold dividend paying stocks. As in a taxable account dividends are taxed at a lower rate than your highest tax rate.
The old thought 60% stock 40% bonds or the other way around 60% bonds 40 % stocks were valid in the OLD DAYS. Treasuries now are paying like 2% inflation is now 10%. Long history Treasuries would pay the rate of inflation plus 2% so people would build a bond ladder and be even. Far from what it is today.