My Investment Portfolio: 2015

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What makes a successful investor? Is it getting double-digit returns? Beating a certain stock index? Outperforming the market for years, and making millions? Or is it just growing and protecting your wealth well enough to achieve your lifetime goals?

If you came here looking for sophisticated investing strategies from a self-assured financial wizard, you’ll probably be disappointed. But, if you want to hear from a financially conservative guy who is careful with his hard-earned money, transparent about his actual investment performance, and open about the reality of early retirement living, then you may find some wisdom.

As I’ve confessed before, I don’t have a strict retirement withdrawal strategy. In the long run, I plan to annuitize enough of our assets that, along with Social Security, we will lock in a guaranteed income floor to cover our essential living expenses. But I suspect that move is a decade off. Meanwhile, we live off interest, dividends, growth, and some part-time work, all with an eye to preserving assets in early retirement. It’s a dynamic process, not a static plan. So, right now, rather than offer an ideal solution to the retirement income problem, the best I can do is report on our progress….

In late 2012, I disclosed my investment portfolio. The response was so positive that I vowed to keep writing on the topic. Early in 2014, I posted an update on my portfolio. That post has been one of the most popular on this site. So here is an update on the state of my portfolio for 2015. Below I’ll review my holdings, outline my asset allocation, and discuss the investment moves I made during the past year. Finally, I’ll reveal my portfolio’s overall performance, and discuss the implications for me, and for you.


Before we start, let me get a few of the usual caveats out of the way:

I’m not recommending specific investments here, much less an entire portfolio.

Portions of my portfolio stretch back almost two decades and aren’t exactly how I’d build one today. For example, I would not use any actively managed funds if starting from scratch.

Even though my portfolio hasn’t changed much in recent years, I can’t promise that I won’t change it in the future, or that I’ll necessarily post my changes to this blog in any kind of timely manner.

That said, let’s look at the numbers for the past year….

Current Holdings

Those who understand my investing philosophy shouldn’t be surprised to hear that my portfolio has changed very little since my last article on the topic. The allocations are a bit different, because I’m processing a modest inheritance, and I sold completely out of one long-held actively managed fund, moving the proceeds to existing, lower-cost funds. But, otherwise, it’s a familiar picture:

FundSymbol(s)Expense Ratio% of Portfolio2014 Return
Vanguard Wellesley IncomeVWINX/VWIAX0.25%/0.18%35.4%8.15%
Vanguard LifeStrategy Moderate GrowthVSMGX0.16%14.5%7.07%
Vanguard Total International Stock IndexVGTSX/VTIAX/VXUS0.22%/0.14%8.3%-4.17%
Vanguard Total Stock Market IndexVTSMX/VTSAX/VTI0.17%/0.05%7.0%12.56%
Vanguard Inflation-Protected SecuritiesVIPSX/VAIPX0.20%/0.10%4.4%3.97%
Vanguard Intermediate-Term TreasuryVFITX/VFIUX0.20%/0.10%3.7%4.42%
Vanguard Short-Term Investment-GradeVFSTX/VFSUX0.20%/0.10%3.5%1.76%
Third Avenue Real Estate ValueTVRVX/TAREX1.30%/1.05%5.5%13.12%
SPDR Gold SharesGLD0.40%5.6%-2.23%
(Note: Multiple symbols are for investor/institutional/ETF shares. Portfolio percentages are as of 1/6/2015. Annual returns are for my shares -- generally the less-expensive admiral or institutional class. Overall return is not a composite of individual returns, because assets fluctuated during the year, but is close.)

Overall, our current asset allocation is similar to last year, though our stock allocation has drifted lower, from about 49% in early 2014 to 42% now, while bonds have remained nearly the same, just a percent higher at 40%.

Last year I wrote “if and when I need to raise cash for living expenses this year, I’ll most likely be selling stocks.” And I did some of that, early in the year. Those moves, coupled with the arrival of the aforementioned inheritance in cash, drove down my stock allocation.

If there was a theme for the year, it was positioning ourselves a bit more conservatively, in the face of an aging bull market. My rebalancing moves, described below, plus the appearance of the inheritance late in the year, left us heavy in cash and bonds. That hurt performance. But, when analyzing investment moves, I often use the principle of least regret: If the market zooms up from here, our allocation to stocks will increase soon enough. And if the market craters, I’ll be feeling smart and safe for having harvested some gains nearer the top.

An Aside on Gold

I don’t write much about gold (GLD) because, even though I’ve held it for many years, I don’t necessarily think it’s right for most people. Gold did very well for me in the 2000’s, so I have some sentimental attachment, but I don’t expect those conditions to repeat any time soon.

I don’t hold gold as an “investment” that I expect to grow, or produce income, or even necessarily keep pace with inflation. Rather, I hold it as “panic insurance.” When there are steep sell-offs in the market, gold often moves up. For example, gold had a bad year overall in 2014, losing more than 2%. But, between October 3 and October 16, when the Dow dropped almost 1,000 points (losing more than 5%), gold spiked upwards by 4%. That’s low correlation in action, and it’s hard to find in today’s world.

Should I ever need to raise cash during a global crisis, gold is an asset that will likely be highly valued. When times are good, gold will probably underperform. But that’s why I hold asset classes like stocks, bonds, and cash. Perhaps there are superior ways to hedge, in theory, but gold is dead simple and I value that.

Activity Last Year

2014 was a typical slow year in my investment accounts. In essence, I made only four trades, though a few of these were split into multiple transactions. The most important moves were to generate cash for living expenses, and exchange some more aggressive positions for more conservative ones — rebalancing in the face of strong stock market performance.

I started the year knowing that we would probably receive a modest inheritance at some point. That inevitably influenced my investment decisions. This money wouldn’t materially change our financial picture — we would just hold it as cash to cover a few years of living expenses. But the timing and exact amount where in question, until the lawyers had finished their work. That meant I still needed to tap some cash for living expenses early in the year, while maintaining a cushion in case the inheritance did not materialize as expected. It also meant I risked ending the year with a lot of poor-performing cash on hand. But I decided that too much cash was a better problem than too little.

Given all that, here is what I did and why I did it:

  • Sold about 10% of our taxable Vanguard LifeStrategy Moderate Growth (VSMGX) holding, after strong gains over the past year. (Concern over the rising market prompted me to sell in the short-term gain window: a small blunder, for which I’ll pay taxes.)
  • Bought a little more than 1% of our total portfolio in SPDR Gold Shares (GLD), as it had come down considerably, and I was not excited about putting our excess cash into possibly overvalued stocks or bonds.
  • Exchanged a little over 1% of our total portfolio from Vanguard Total International Stock Index (VTIAX) and Vanguard Total Stock Market Index (VTSAX) into Vanguard Wellesley Income (VWIAX), in the name of rebalancing.
  • Exchanged all of our T. Rowe Price New Era (PRNEX), about 4% of our total portfolio, into Vanguard Wellesley Income (VWINX). PRNEX is a relatively expensive, actively managed natural resources fund that I’ve held for years. But I’ve become increasingly pessimistic about actively managed funds in general, and the energy sector in particular. And in our 15% tax bracket there will be no long-term capital gains tax.

2014 Return

So, let me talk about overall investment returns. This is always an interesting exercise, but not always that useful in the context of a single calendar year. When it comes to retirement, short-term returns don’t matter much: It’s how your portfolio performs over the decades that really counts. Nevertheless, I do compute my overall investment return every year.

Again this past year, my conservative portfolio lagged behind other benchmarks. My portfolio returned about 5.1% in 2014, compared to 9.9% for the Dow Jones Industrial Average (including dividends) and 7.1% for the Vanguard LifeStrategy Moderate Growth Fund (VSMGX) — a more reasonable benchmark for my balanced portfolio than the all-stock Dow.

What hurt this year? Notably the allocations to cash and international. As mentioned previously, external events led me to hold more cash than usual, and cash earns next to nothing these days. Then my international stocks had a bad year, ending with a more than 4% loss. Thanks to diversification and strong returns elsewhere, my portfolio eked out a positive return for the year. But it’s not one I’ll be bragging about at parties.

Yet, I’ve watched essentially this same portfolio of mine for almost a decade, including around the punishing 2008/2009 downturn, and I’m comfortable with how it performs. The geometric mean (which reflects the impact of sequence of returns) of my 10-year returns is 6.4%. When I input that kind of return, along with our other variables, into a high-fidelity retirement calculator, the results generally show us maintaining our lifestyle well into our 90’s and most likely much further.

So back to the question that started this post: What makes a successful investor? It’s great to outperform the market or some index in a given year. But long-term returns are much more important. I’d love to beat the market again, as my bond-heavy portfolio did during much of the 2000’s. But I know the odds are against that in the long run. Instead, I may have to settle for simply meeting our lifetime goals. And, since I’m content with my life, that will be good enough!


  1. LarryMelman says

    I am a new reader of your site. So I don’t know the history of why you hold 11% cash. It is almost 3 years of expenses if you are following the 4% Rule. You don’t invest in individual stocks so you don’t need dry powder for investment opportunities. So could you explain your cash management approach, please.

    • Hi Larry, welcome. My target is generally to hold 2 years of cash, because that is enough time to span across most potential market dips. But this year, as I explained in the post, we received a modest inheritance to deal with. I decided to hold most of that cash for future living expenses, rather than putting it into what looks like an overvalued market at this point.

      • Thanks for posting this portfolio. I am curious, what percentage of assets do you hold in taxable vs tax-deferred accounts?

        In addition, do you plan on reducing fees you pay on investments by switching out to other cheaper alternatives ( like the real estate fund mentioned below)?

        I will be honest with you – i do funds in my 401K. However, for taxable accounts, I have done mostly individual dividend paying stocks (ok I own a few shares of Berkshire B, but mostly for the bragging rights that Buffett now works for me). Hence, my annual investment expenses are really low, and I am in the accumulation phase – it is likely less than 0.05%. If your portfolio is say $1M ( I made that number up), you are essentially paying $2K/year for the privilege of someone picking the largest companies for you and holding them for you in a fund. With $1 million, you can essentially purchase shares in 2000 companies using some brokers like Interactive Brokers, and pay $2000. Or you can buy individual Treasury Bonds ( TIPS, or regular ones) by building your own ladder, and skip paying 0.10% – 0.20%/year. I see no point to pay someone to pick and hold 0.10% – 0.20% or more per year to simply pick US Treasury/TIPS bonds for you. But of course that’s me. I am not criticizing you, just thinking out loud. If you spent $30K/year, and save on $2K in annual expenses, that’s like giving you a 6.66% raise.

        Best Regards,

        Dividend Growth Investor

        • Thanks for the feedback DGI. Currently we’re about 55% in taxable accounts, 45% in tax-deferred accounts. I’ve been describing my long-term process of moving toward more passive, less expensive investments. I target this blog at people like me who want to manage their own money, but without the process consuming their lives. My overall expense ratio right now of 0.21% is quite low and I may have reached a point of diminishing returns, trying to lower it further. To each his own, but it is easily worth a couple thousand $/year to me not to have to run my own index funds: selecting individual stocks, tracking them, rebalancing to the index. The argument for do-it-yourself security management is stronger when it comes to bonds, especially government bonds. But I don’t own that much, about 8% of my portfolio, and I expect they’ll get folded into a larger bond index or balanced fund at some point. Still, for somebody who wants every last dollar on the table, and is willing to do the legwork, your numbers are a useful perspective. Thanks.

  2. Darrow – good summary. Quick question – why are you using “Third Avenue Real Estate Value” as you real estate allocation – why not Vanguard REIT ETF? Just curious as the expense burden on the Third Avenue Real Estate Value is quite high.

    • Hi Dave, good question. Third Avenue is one of my oldest holdings, originally recommended by my investing mentor, Dick Young. I keep it because of the capital gains, some international exposure that Vanguard’s REIT offering lacks, and as my final “test case” in active management. Marty Whitman/Third Avenue are legendary value stock pickers. In the long run though, I’ll most likely fold it into my other index holdings…

  3. Mark Schmidt says

    Hello again Darrow,
    Rates will eventually go up, which obviously will effect your bond funds. What, if any, changes will you make when this occurs? Thanks for sharing.

    • Hi Mark, I’m probably going to sit tight with my stock/bond allocations in the 40-50% range each no matter what comes. Most of the analyses I see show that (short/intermediate) bonds recoup their principal losses due to interest rate increases within a few years, thanks to the increased dividend payments.

  4. Mike Dupin says

    Thanks for sharing what works for you. We are not retired yet, but are getting close. We have most of our holdings in a target retirement fund because I like the simple way to get diversification with a glide path as we age. You mention living off of interest, dividends and growth. Can a target retirement fund provide that, or it is necessary to shift into something like the Vanguard Wellesley as an income fund when you retire and start using money rather than accumulating? Thanks.

    • Mike, congrats on your progress. I’m a fan of simplicity too.

      Target retirement funds, LifeStrategy funds, and balanced funds like Vanguard Wellesley/Wellington are very similar in many respects. Each is going to produce some amount of dividends annually, as well as some growth (increase in share price). Normally, you’ll get more dividends and less growth, the more conservatively positioned (higher % of bonds) the fund. Most target retirement funds will be conservatively positioned by the time you retire, and then get even more so.

      In general, you could cover your living expenses with any type of fund. The particulars of whether dividends will be enough or you’ll have to harvest some growth (sell shares), will come down to how high your expenses are in relation to your invested assets. Hope that helps.

  5. I may have missed this from previous posts but are you reinvesting your dividends in any of your funds? And if not what are you putting them into? Thanks, this is a very useful information for hopefully a soon to be early retiree…

    • Hi Rob. Generally my practice has been to reinvest dividends in our retirement accounts but harvest them for living expenses in our taxable accounts. We aren’t old enough yet to pull from our retirement accounts and it doesn’t make sense to have cash sitting idle there. This year, with extra cash already on hand, I went ahead and reinvested most of the dividends in our taxable accounts as well.

  6. I see you hold a number of Vanguard funds as I do. I was wondering what you would think of holding the Vanguard Total Bond Market Index rather then several bond funds? I take it you prefer shorter term holding if interest rates should rise? Just wondering what your thoughts are on this fund?

    • Hi Bruce. If I had it to do over, I would very likely just buy the Vanguard Total Bond Market Index Fund/ETF in lieu of my other Vanguard bond funds. (In fact, that’s exactly what I recommended to my son.) Though, holding the individual bond funds I could theoretically cash out at a more optimal time, assuming I recognize it.

      I actually regret not owning some long-term bonds, since they have done well, despite predictions. This is more evidence — if needed — that it’s usually better to own the entire market (stock or bond) than to try predicting which sector will do better, when.

  7. Hi Darrow,

    Do you plan to live off the dividend and interest income without selling the stocks or you plan to slowly start selling them to fund your retirement expenses?

    • Hi John. Every year has been different since I retired in 2011. A combination of my wife’s work income until she retired, plus the bull market, plus the recent inheritance, makes it hard to answer this question in general. But my best guess, for a “normal” retirement year (once we get one of those), is that we would need to sell a small amount of stocks to fund our expenses. Then I would expect that need to go away once our Social Security starts.

  8. Thanks for sharing Darrow. My investment philosphy has evolved much like yours. I’ve dropped the smaller positions though like you have in gold and real estate given that they really don’t have much of an impact on total returns over the long term to simplify things as much as possible. I’ve advised many people to just choose one of the Vanguard LifeStrategy funds based on the amount of equities they are comfortable holding, be done with it, let it ride for the long term and go focus on living their life. For those funds: Moderate Growth, 60% stocks with 7.07 return last year; Conservative Growth, 40% with 6.95% return; Income, 20% with 6.76%.

    • Thanks Steve, it does indeed sound like we’ve been down similar roads. I expect to continue consolidating my positions over time. Ten years from now we may own just a SPIA and a balanced fund…

  9. Kyle Hendon says

    Hi Darrow,

    When/if are you planning on investing your excess cash position? Do you have a specific market valuation in mind or are you planning to investing it over a period of time with dollar cost averaging or perhaps value averaging? Would you consider putting some of it in international fund which currently have more attractive valuations than US markets?

    I find myself in a similar situation where I have a lump sum which I am not thrilled about investing at current market valuations. With that said, I do not think I can time or value the market either effectively either. Therefore, I am hesitant to act on anything that involves market timing or valuation, both of which I do not believe I do effectively..

    Historically, lump sum investing has done quite a bit better than dollar cost averaging, although as per this link at high market valuations DCA starts to become more attractive from a risk vs return perspective. I have not thought too deeply about this, but since most retirees are having to draw down their capital perhaps the lower return/lower standard deviation is more attractive with DCA since it exposes them to less sequence of returns risk? I would love to hear your thoughts on this subject!

    My current plan is to invest half of lump sum now and perhaps half in 6-8 months. It is not very scientific, but perhaps it will provide me with an emotional hedge of sorts. On the other hand, I may just be shifting some emotional risk and portfolio volatility from now to 6 months from now. I don’t really know.

    • Hey Kyle, this is an interesting question. Like you, I don’t believe in market timing. I have also historically favored some form of DCA, for emotional reasons. Typically I’ve broken a lump sum into a few investments spaced over at least a few months. And intuitively it makes sense that DCA would look more favorable at high market valuations, especially for retirees seeking to avoid volatility and sequence of returns risk.

      However, I also agree with the arguments for investing a lump sum advanced by my buddy Jim Collins (Why I Don’t Like Dollar Cost Averaging) and others. The fundamental principle is that markets tend to go up over time, so delaying your investment is a losing bet.

      Having said all that, my situation in retirement is fundamentally different than it was in accumulation. Back then I could take the bet that the market would increase before I needed the money. But now I can potentially put a lump sum to use for living expenses within a few years. In my view, it just isn’t worth taking on market risk for that short time frame. So I hold some extra cash.

  10. The hero of your portfolio seems to be your holdings in VWINX/VWIAX, and not just for 2014. As you discussed in your article, “In Praise of Balanced Funds”, this has been a “go-to” fund for you for some time. It has rewarded you. For a conservative allocation fund, it has performed well in good markets and bad. I find it a little amusing that your overall portfolio is roughly the same equity allocation as Wellesley, but didn’t perform as well as that holding itself. I’m not saying you should put all of your eggs in that one basket, but it does serve as a good benchmark.
    I am also a fan of balanced funds, and have held OAKBX and FPACX for a long time. As actively managed funds, their expense ratios are higher than I’d like, but they have done well for me. In down markets, they kept my portfolio from losing as much as many did, and have also recovered well. Wellesley is a good fund prospect for me and might force me to open a Vanguard account with an upcoming rollover.

    • Thanks for the observations Tom. I have thought about how my allocation is similar to Wellesley yet underperformed. It’s a blunt reminder that a simple balanced fund can often outperform more exotic investments. Yet, this portfolio of mine cranked out a number of double-digit returns in the 2000’s, so it may just be reversion to the mean/payback time. At any rate, my long term plan is to continue consolidating in the direction of a single balanced fund. Wellesley has indeed rewarded holders well over the years, with reduced volatility, and solid returns.

  11. Hi Darrow, as always, thanks for sharing your process – it’s very helpful. You mentioned perhaps annutizing after a decade. A Variable Annuity is being recommendended to me. I’m not convinced it’s the way to go (higher cost, $ locked up). Could you share the pros/cons of buying a VA? Thanks! Marty

  12. Hi Darrow,

    I very much enjoyed your latest article and as usual I found it to be very interesting and illuminating. One item caught my eye and it was your reference to a 10-yr geometric mean return of approximately 6.4%. I am curious; do you directly use this number in your high-fidelity retirement calculator analysis, or do you subtract from it an assumed or calculated inflation amount? For example, based upon several of your previous posts, I recently purchased the Pralana retirement calculator for my own analysis, and this calculator requires an assumed “real” rate of return (RROR) for the various assets one might own. This input for the RROR is kind of tripping me up a little bit in my own analysis, and consequently, I was curious as to how you might treat it in your own analysis.


    • Hi Matt. We can answer this with strict mathematics. No judgment call required. Any given retirement calculation is either going to work with real returns (after inflation) or nominal returns. If it’s working in real returns, you’d need to subtract the inflation rate first. If it’s working in nominal terms, then presumably the calculator is prompting you for the assumed inflation rate somewhere else. (If not, somebody is making a mistake.) In my case, that geometric return is a nominal return, so I need to be certain I’m subtracting inflation, either directly, or elsewhere in the calculation — and I do.

  13. Hi Darrow,
    Thanks for posting you portfolio, it’s very informative. I enjoy your website. I’m 39 y/o man who is aggressively saving for early retirement (my target is age 50). It looks like you’ve developed your own portfolio that you’re comfortable with, I think that’s the most important thing. As you probably know, those who chase the latest “hot fund” are always chasing yesterday’s winners. I believe to be successful in investing you must first be consistent. You clearly are, having held your portfolio for 10 years.

    I’ve done a lot of reading/research on investing on my own, and I developed my own portfolio too, I call it the “Juicy Portfolio” haha. It returned +9.45% in 2014. Here’s my website with details:

    I wish you a prosperous 2015!
    Take care.

    • Thanks Ozzy. I agree on consistency. Most reasonable asset allocations, maintained consistently over time, will do OK. Looks like you have a good formula of your own. I’m a fellow Harry Browne fan. Best wishes on your early retirement!

      • I did well with Permanent Portfolio, PRPFX, in the 2000’s as a significant holding, but sold out a couple years ago when it failed to do well in a good market. It helped moderate the losses of 2008-2009, but I’m at a loss to explain why it has done so poorly recently, whether the asset allocation or the specific investments within the allocations. I counted on it for my gold holdings, which I currently lack. An ETF like GLD or IAU could be a good option for me also.

  14. Tim Jensen says

    Hi Darrow,

    I really appreciate your honest review of your portfolio. My portfolio is very similar, except I use Wellington and have no gold and made 5.7%.

    My question is do you plan to move more of your portfolio into balanced funds as time goes on?

    Thanks again and keep sharing,

    • Hi Tim, thanks for your numbers. Sounds right. I am on a long term project to simplify and consolidate my portfolio. I currently expect that in the very long term we’ll wind up with a single premium immediate annuity (SPIA) plus a balanced fund.

  15. LarryMelman says

    I am curious to know whether early retirees use their tax-deferred accounts during their initial years of retirement. I have about a 50-50 split of assets in taxable and tax-deferred accounts. My taxable accounts could easily support me through early retirement. But if I leave the tax-deferred accounts untouched until MRD time, the tax bill will be huge.

    72(t) is complicated and not very flexible. One strategy I have considered, is to do Roth conversions during early retirement when they would be taxed in the lowest tax brackets. My Roth has (say) $50K of original contributions in it. I could withdraw those old contributions at $10K per year, and start conversions at the same time. This would create a small tax-free income stream of the old contributions for 5 years, replaced by the conversions after their 5-year aging period is satisfied. This may not make a significant dent in my IRA, but it’s better than doing nothing. And it lessens the drain on the taxable accounts.

    • Hi Larry, you’ve outlined all the key issues, thanks. We’ve been living off our taxable accounts so far. I just started taking a hard look at the RMD/Roth conversion picture at the end of the year. I have more analysis to do. But preliminary conclusions are that Roth conversions don’t move the needle much in my situation. Also, if somebody has to think about RMDs it’s generally to save on taxes, not because they’re trying to make ends meet. In other words, it’s a nice problem to have. Your mileage could vary. More to come on this…

  16. Warren (wannabe) says

    I really enjoy your blog, thanks for being so transparent. I am in a very similar circumstance to you, engineer retired at 48. Currently allocate 42% to stock versus fixed; but have tweaked this over the years to between 40% and 60% stock, depending on several macro-level valuation metrics. I’ve always felt pretty comfortable with this stance until reading about Warren Buffett’s pronouncement that his wife’s estate is to hold a 90% position in the S&P 500 with 10% in short gov’t bonds. At first I thought that maybe he just didn’t like his wife very much, but he does have a habit of doing things that ultimately work out pretty well. I don’t think even Warren would rush to implement a transition to 90% stock in today’s high valuation market, but as a longer term target, (perhaps after the next crash), I’m intrigued. What are your thoughts on this idea?

    • Hi Warren, great to hear from a fellow engineer. Congrats on your even earlier retirement! Since writing this post I’ve been pondering my relatively low allocation to stocks. In theory, I would be well equipped for a higher stock allocation. I understand the issues, and I understand my own risk tolerance, having managed my assets through several significant downturns already. Even at a 60% stock allocation, we’d have plenty of cash and fixed outcome to outlast a long downturn. And the higher expected returns would be nice. So why don’t I do it? You point to one reason: with today’s high valuation market such a change would be dangerous and would smack of performance chasing. I was very happy with my asset allocation when bonds were in favor and it was making double-digit returns, so what’s wrong with it now? But I can see a rising equity glidepath in our future, as advocated by some recent research, perhaps after another downturn, and once we’ve locked in more retirement income with our SS and a SPIA. As far as Warren Buffett’s thinking, I know he’s a firm believer in U.S. stocks. Beyond that, I’m going to guess his wife’s estate is adequately sized for her to live off just the 10% bonds if needed. 🙂

  17. Darrow- As always, thanks for your openness and sharing of personal information. I look at investing at this stage of the game (age 50+) the same way you looked at what you called “your personal inflation rate” in your book. It is not a one size fits all scenario. My personal investing rate is the rate that I need to meet my goals (living comfortable without outliving my money). From there, I developed a strategic plan to meet that rate without taking undue risk. It appears you have done the same. You are clearly meeting the goals you have set, have a very time-tested battle plan, and appear to have a very long-term sustainable retirement plan in place. Like you, my fall back position (if needed or desirable) may be to annuitize a part of the portfolio later. The bottom line is it works for you and lets you focus on the most important part of retirement-enjoying and living a full life. Best regards, Ed