I picked Vanguard Intermediate-term Bond Index Fund (VBILX) because it is 1/2 government bonds, and 1/2 corporate bonds, with no Mortgage Backed Securities (MBS).Kayaking wrote: ↑Sun Sep 20, 2020 8:00 pmThank you. I am so glad (and relieved) I posted my question here.ruralavalon wrote: ↑Sat Sep 19, 2020 12:21 pm Welcome to the forum .
What is your percentage annual withdrawal rate?
You need to pick an asset allocation that you can stick with no matter what the stock market does in the future. Asset allocation is a very personal decision which must be based on your own personal ability, willingness and need to take risk.
For what its worth we are both age 75, we have no pension or annuity, our annual withdrawal rate is about 3%, our asset allocation is currently 50/50 and has been since 2008. Our only bond fund is Vanguard Intermediate-term Bond Index Fund (VBILX). We do not have a cash allocation.
Once you have decided on an asset allocation you think you can stick with through thick and thin, and the funds you want to use, just go ahead and make the switch all at once. I see no benefit to making the change in stages.
I personally do not use or suggest international bonds, short-term bonds, or a cash allocation. In my opinion four bond funds is needlessly complex.
I withdraw 3.5 - 4% annually, although this year I will end up withdrawing only 3.2% because I didn't want to hire anyone to work inside my house during the pandemic. I had some re-pointing done and a fence installed, but those were inexpensive projects.
After reading your suggestions and seeing similar comments from other people on this forum, I have decided to eliminate some of the funds I have.
Would you tell me your thinking on your choice of the Intermediate Term Bond Fund?
The article by Rick Ferri was very interesting and supports many of the comments by others here. I was very surprised he suggested a 30/70 allocation when one stopped being in the accumulation phase. That was a startling idea.
Since your it has more corporate bonds, and fewer Treasury bonds, than a total bond market index fund it has a little better returns with a little higher risk. Mr.Bogle was recommending a higher allocation to corporate bonds, and used this fund. Larry Swedroe was recommending against MBS.