I drafted the below revision to my IPS AA glide path as I never liked my age based one as it didn’t fit with my FIRE goal and the projected timing of that.
Questions:
- Any reason my proposed IPS glide path doesn’t make sense?
- Have other Bogleheads have adopted glide paths based on expense multiples vs age? If yes feel free to share your IPS glide path.
- Glide based on multiple of expenses to match my “need” to take risk.
- No change in AA at target retirement portfolio multiple of 30x.
- No change in AA past age 67 to keep portfolio management simple and clear if I am unable to manage the accounts.
- Current AA 90/10% fits my risk tolerance, AA has been 90/10% since 2018, currently portfolio is around 10x projected expenses.
- Terminal AA is 55/45% at SS FRA, I feel this fits my risk tolerance from 67 to death.
- Plan to FIRE with 30 times expenses (projecting this to happen between age of 45-50)
- US/International stock ratio fixed at 60/40% through the complete glide path.
Glide path of the total retirement portfolio was developed with respect to a multiple of retirement expenses and social security FRA (full retirement age). At FRA the AA is fixed for simplicity.
- 0-15 times projected retirement expenses & <67 yrs. old: Stock/Fixed Income Ratio: 90/10%.
- 15-25 times projected retirement expenses & <67 yrs. old: Stock/Fixed Income Ratio: 85/15%.
- 25-35 times projected or current retirement expenses & <67 yrs. old: Stock/Fixed Income Ratio: 75/25%.
- 35-50 times current retirement expenses & <67 yrs. old: Stock/Fixed Income Ratio: 65/35%.
- 50+ times current retirement expenses or >67 yrs. old: Stock/Fixed Income Ratio: 55/45%.