Mutual Funds


I Don’t Want to Outlive My Money

Ted Jones intended to retire two years ago. But after the markets tanked, he decided to keep working to defer tapping his investments. Jones, 63, a former Army major who lives in Lorton, Va., retired from military life in 1992 but has stayed on with the Army as a civilian.

Now Jones is getting ready to retire again. To maintain the lifestyle that he and his wife, Chong, 64, are used to, he figures they need to draw 4% of their investments annually. He also hopes to be able to leave something to the couple’s two sons and four grandchildren.

The Joneses should take a “bucket” approach to assembling an investing plan. This portfolio stashes two years of expenses in a cash bucket, invests the next eight years’ worth of expenses in bonds, and puts the rest in stocks. Retirees need stocks to keep up with inflation. But if they run into another bear market, the Joneses know that they won’t be tapping their stock bucket for another decade. This portfolio would have lost 32% over the bear market but gained 65% from the bottom.

See the portfolio that seeks to tamp down risk.

See all 22 of our recommended portfolios.

Editor's Picks From Kiplinger


You can get valuable updates from Kiplinger sent directly to your email. Simply enter your e-mail address and click "sign up".

More Sponsored Links


DISCUSS

Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy


Advertisement
Get valuable updates from Kiplinger directly to your e-mail

Market Update

Advertisement

Featured Videos From Kiplinger