Talk:Asset allocation over the lifecycle
Aim of the new article
The contents of the draft User page could potentially fit in the main AA article. However it (the main article) is already relatively long, and the new content would distract from the main messages there (AA is important; stay the course; and the need, willingness and ability framework). So I suggest a separate page about AA over the lifecycle. Some of the "rules of tumb" content in the main article could be deleted, with a mention of the current page instead. Quebec 15:57, 23 March 2025 (EDT)
A different perspective
Consider the Bogleheads wiki Life-cycle finance article. A counterpoint to your approach is addressed in the "Why the life-cycle finance approach gives a higher probability of reaching the retirement goal" section.
Now we could adjust the asset allocation over time in line with changing financial conditions, increase saving, postpone retirement, or plan to increase annuitization using the Mean / Variance approach. But these options are typically not explicitly in the Mean / Variance approach. They are instead added in an ad hoc fashion, once the plan is far off course. Using goal focused Life-Cycle Finance, these options are baked into the plan in order to stay on course to meeting the goal over time as we approach retirement.
--LadyGeek 08:02, 2 April 2025 (EDT)
- Good morning. In the lead section, I already had included the warning "This article best fits with total return decumulation strategies in which the retiree wants to continue to manage a portfolio and be exposed to stock markets after retirement, as opposed to other Retirement income strategies and styles". To further emphasize that this ("total return") is the framework in which the current article fits, I have added an "Alternative approaches" section at the end, which mentions "safety-first" planning and the related articles. That corresponds to the general idea of the Bogleheads "Life-cycle finance" article (annuities, dual-budget models, ...). In terms of the specific section you quote, which promotes rebalancing to 62/38 instead of 60/40 and so on, that sounds like dynamic asset allocation. It is not clear in the Bogleheads article how to do that specifically: how is the 62/38 split arrived at following a bad year for stocks? What is the formula? Or is it a subjective judgment call? Regards, Quebec 09:26, 2 April 2025 (EDT)
- Good morning. In terms of the specific section, I think the allocations described in that section are hypothetical to show the concept. It is not a precise calculation and is more of a subjective judgment call.
- The "Alternative approaches" sections is helpful. I can now see how this page fits in context with the alternative approaches. Thank you. LadyGeek 08:14, 11 April 2025 (EDT)
Ready for main space?
I'm done with development. Is this article ready for main space? Quebec 07:47, 11 April 2025 (EDT)
- The article is ready for the main space. LadyGeek 11:55, 14 April 2025 (EDT)