After investing retirement savings for many years in target date index funds, I'm beginning to think about draw down strategies. A financial guy on YouTube mentioned the strategy of keeping some of your money in a separate stock fund, and some in a separate bond fund. History shows that when stocks are struggling in a bear market, bonds are doing better. Conversely, in a bull market, stocks perform well and bonds perform less well. The idea is then to draw down specifically from the bucket that is "doing well", giving the other bucket time to recover without being depleted when it is "down".
A target date fund may be be diversified, but it's all in one bucket. Sounds like a good place to build wealth, but not the best place to draw it down - at least using the above strategy.
My question is, Is this separate stock-bucket / bond-bucket strategy common for drawing down in retirement years? Or is it more common for people to just draw down from the target date fund? Thanks in advance.
A target date fund may be be diversified, but it's all in one bucket. Sounds like a good place to build wealth, but not the best place to draw it down - at least using the above strategy.
My question is, Is this separate stock-bucket / bond-bucket strategy common for drawing down in retirement years? Or is it more common for people to just draw down from the target date fund? Thanks in advance.
Statistics: Posted by cruisecontrol — Tue Nov 12, 2024 10:55 pm — Replies 3 — Views 330