In this episode, Wade and Alex answer listener questions about portfolio allocation in retirement. They discuss the impact of low yields on TIPS and how it affects a retiree’s portfolio. They also explore the optimal allocation of assets in taxable, tax-deferred, and tax-avoided accounts. Additionally, they address the role of annuities in retirement income and how they can replace the bond portion of a portfolio. They emphasize the importance of tax diversification and asset location. Finally, they provide insights on investing in stocks and the different factors to consider, such as value, small-cap, and REITs.
Takeaways
- Low yields on TIPS impact a retiree’s portfolio and may require a reassessment of risk and allocation.
- Tax diversification is important, but the exact percentages in each type of account are not as crucial as asset allocation and asset location.
- Annuities can play a significant role in retirement income by providing protected lifetime income and reducing reliance on other investments.
- When investing in stocks, it is important to capture market risk and consider factors such as value, small-cap, and REITs.
- Growth indices may not necessarily provide a premium over value stocks in the long term.
Chapters
00:00 Introduction and Small Talk
02:45 Navigating Low Yields and Portfolio Allocation in Retirement
09:15 Optimal Allocation of Assets in Taxable, Tax-Deferred, and Tax-Avoided Accounts
25:58 The Importance of Tax Diversification and Asset Location
26:41 Investing in Stocks: Capturing Market Risk and Considering Factors
Links
Watch this episode on YouTube: https://youtu.be/oBu_XEyTavU?si=mGfltg99KNkvPXqd
The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/
This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips
