In this Mailbag, Jean talks to Cecilia, a 58-year-old listener, about asset allocation and portfolio management as she approaches retirement. She has a defined benefit pension and government benefits, but also wants to draw down on her portfolio for the first few years of retirement. 

They explore the need to adjust asset allocation, the role of fixed income in your portfolio, and the importance of building a cash cushion for the initial years of retirement. 

Have a question for us or want to jump on a call with Jean? Write in at mailbag@hermoney.com.

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Takeaways:

• Consider adjusting asset allocation as you approach retirement, taking into account fixed income sources such as pensions.


• Build a cash cushion to cover the initial years of retirement, reducing the need to sell investments at a loss during market downturns.


• Consult with a financial advisor to create a comprehensive retirement plan, including strategies for cash flow management and mortgage payoff.


• Evaluate the benefits of individual bonds versus bond funds, considering the potential volatility of bond funds and the security of principal with individual bonds.

Chapters:

0:00 Introduction

2:11 Asset Allocation and Retirement Planning

5:13 Cash Cushion for the Initial Years of Retirement

8:02 Consulting with a Financial Advisor

11:00 Mortgage Payoff Strategies in Retirement

12:57 Individual Bonds vs. Bond Funds

15:00 Conclusion

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