A.I.M. Users Bulletin Board

[ls7550]

50/50 stock/bonds is a common withdrawal phase blend.

The Trinity study indicated that if you're withdrawing a 4% SWR (safe withdrawal rate) then that has a good chance of surviving 30 years. i.e. 50/50 total return with dividends/interest reinvested, but taking 4% of the original start date value and withdrawing that as income, and then adjusting that amount by inflation each year as later years withdrawal amount.

There are variations of how 50/50 stock/bonds might be held, for instance

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&allocation2_3=30&allocation4_1=33&endDate=05%2F09%2F2016&symbol5=BND&allocation6_3=30&symbol4=GLD&lastMonth=12&allocation4_3=10&symbol6=SSO&symbol1=SPY&endYear=2016&symbol3=SHY&frequency=4&symbol2=TLT&inflationAdjusted=true&annualAdjustment=0&showYield=false&startYear=1985&rebalanceType=1&timePeriod=4&annualPercentage=0.0&allocation1_1=67&allocation3_3=30&allocation1_2=50&allocation5_2=50&annualOperation=0&firstMonth=1&reinvestDividends=true&initialAmount=10000

Of those three I'm fond of the first, 67% stock/33% gold as a proxy for 50/50 stock/bond as that eliminates taxflation risk - where you're taxed on nominal 'gains' where the gain might be no more than a inflation pacing amount. Something like BRK-B/Gold has no periodic income (no dividends nor interest) and as such taxflation risk is eliminated. In the UK we also have options to eliminate capital gains tax risk.

Robert Lichello started with 50/50 being described and ended at 80/20. Both are still as valid today as ever. 50/50 is good for later life/withdrawal, 80/20 is good for during accumulation (younger) years. But not exclusively. If you have "enough" then even during later years you might hold some 50/50 (for income) and some 80/20 (for growth/heirs). Each to their own.