Weekend Reading – My Wife’s Retirement and 30/70 Portfolios

Weekend Reading – My Wife’s Retirement and 30/70 Portfolios

Well hello….

Welcome to some new Weekend Reading that shares some personal news: my wife is now retired from the workforce…along with some takes on a 30/70 portfolio I will not follow. 🙂

Before that, in case you missed it, I recently wrote about this:

Weekend Reading – The Best Asset Allocation for Retirement

Weekend Reading – My Wife’s Retirement and 30/70 Portfolios

First, and most importantly, congratulations to my wife – she is now retired from the workforce!

via GIPHY

Her last day of work was yesterday. 

Interesting how time flies but also how long-term planning can materialize to reality:

We discussed (and devised) a plan almost 20-years ago to try to become debt-free at the time of retirement. 

Done.

via GIPHY

We discussed (and devised) yet another plan to be financially independent by our early 50s, meaning, the cashflow / returns from our personal portfolio should cover our expenses for life until age 95 or so.

That’s done.

via GIPHY

And finally, we aspired to be able to retire from the full-time workforce while we were younger, we still had good health and mind and wellness, to spend our time as we please – that could be working again in time at something totally different (or not at all), pursuing volunteer work, trying new hobbies or having the time to enjoy existing hobbies, opportunities to spend more time with family or to be honest, do anything else we want to do. That includes local travel or travel to far off lands to visit volcanoes and hot liquid magma… 

via GIPHY

Kidding, a bit.

Who knows what the future holds!?

While I will continue to blog next year, via this small My Own Advisor labour of love along with providing some low-cost retirement income projections to all DIY investors since I enjoy that AND I believe I have LOTS of expertise to offer on this subject since we’ve largely realized our early retirement goals, I found myself reflecting on my wife’s financial journey a bit this week…

I’ll summarize my thoughts to her as follows for readers:

This week was the end of something old and the beginning of something new.Retirement is both an ending and a fresh start for many things.You now have more freedom over your schedule; you can prioritize time on the things you really value in life, and you can take more command with your time and energy for any personal discovery sooner than most – what gives you meaning beyond earning an income to pay bills as you work for others…

You’ve had a rewarding career (one you should be very proud of as I am for you) and I’m glad you’re able to start enjoying your retirement with me.

Mark

*********************************************

More Weekend Reading – Beyond My Wife’s Retirement and 30/70 Portfolios

Something I read and don’t agree with: I will not be following Vanguard’s advice to rotate towards a 30/70 fixed income/stock portfolio. From the Morningstar article, the reason why Vanguard defends this super conservative investing approach now – they/Vanguard don’t see equities performing well for the next decade. 

“Part of the decision and the magnitude by which an investor might want to de-risk their portfolio would be their tolerance for underperformance should the momentum in the market continue,” he said.

Schlanger said the strategy is not just about trying to earn excess returns, but managing risk. “That’s why when you have very comparable rates of returns in equities and fixed income over the next decade, according to our forecasts, it just makes sense to overweight the asset class with less volatility and less potential for drawdown,” he said.

“In this particular strategy the investor is trying to maximize the risk/return trade off, and again, when you have very comparable rates for equities and bonds, overweighting the less volatile asset class and also making the tilts towards more attractively valued-priced equities makes a lot of sense,” he said.

Interesting. 

Then you constrast this stuff with our Canadian FP Guidelines that are updated every year for return projections for the next 10 years:

Source: https://www.fpcanada.ca/projection-assumption-guidelines

“These Guidelines are intended as a guide and are appropriate for making realistic long-term (10+ years) financial projections.”

Who is going to be right? Vanguard? FP Standards? You? Me? 

We’ll see how things play out for us.

First off, you might recall we’re planning to start retirement with a roughly 90% stock/10% cash/cash equivalents allocation which seems rather high but then again, we will be relying on dividend and distribution income paid to us each month to fund most of our early retirement expenses.

Second, while I don’t agree with the recent Vanguard returns projections – they could turn out to be correct of course – who knows…I am a bit conservative in my own retirement income projections when it comes to rates of return. I include 5% annualized rates of return for our personal portfolio long-term even with 90/10 asset mix to start with. 

Readers, where do you stand on this asset mix and rate of return subject? Do you see a decade ahead whereby stocks might significantly revert to the mean? If so, is that going to change how you invest? 

I’ve completed our income projection tally as of end of September. I will post that next week. Here is was our projection for annual dividend income from a few key accounts last month:

August 2025 Dividend Income Update

I recently wrote a post on the subject of How much cash should you keep?

Well, aligned to that it is staggering what the top-50 countries in the world keep by central bank reserves:

Ranked: The Top 50 Countries by Central Bank Reserves

My friend Dividend Growth Investor said the human mind cannot comprehend compounding.

And finally, seems many retirees who have RRIFs (Registered Retirement Income Funds) still want clarity on an election promise. Can’t blame them. I read a Globe article recently that mentioned several Globe and Mail readers are delaying their RRIF withdrawals so far in 2025 in the hopes Ottawa follows through with their one-year, 25-per-cent reduction promise announced back in April.

From the article I read:

“Yes, I am holding off taking my full RRIF withdrawal and it is very frustrating not knowing if it can be reduced or not,” one reader wrote. Another added that now that it’s the last quarter of the year, “leaving our opportunity to stop or reduce our withdrawal perilously close.”

Sure, a lower RRIF minimum percentage in one year means less pressure on any retiree to sell stocks to fund any withdrawal but I would suspect most seniors actually don’t have much flexibility – they have set-up their RRIF and withdrawals in a manner to predictably cover expenses. Rightly so. 

Recall RRIF withdrawals can be taken monthly, quarterly or annually depending on your needs.

I helped my parents to set up their RRIF, annually, this way near the first of the year:

RRIF withdrawals, in cash, are ready at least one year in advance.Money comes out of the RRIF for spending, or for TFSA contributions at the start of the year, or to cover near-term tax filing payments. Remaining money in a 60/40 ETF stays in the RRIF, for another year, to compound away for the rest of the year until the next RRIF payment comes out. So, again, on compounding:

“The first rule of compounding: Never interrupt it unnecessarily,” – Charlie Munger.

Let me know your thoughts on these subjects and much more, anytime. My readers including successful retiree contributors are also ready to engage with you, too!

Have a great weekend and I’ll be back sometime next week to share a new projected annual dividend income update. 

Mark

Mark