I settled on an even split between stock and treasuries, currently at about 1.5x/1.5x stock/ITT. Like you, my stock portion is split 70/30 with the foreign coming primarily from VXUS. I don't plan to FIRE for at least another 10 years and am intending to let my leverage float until then. I haven't given too much thought to the proper leverage ratio in retirement, but something like .9x/.9x stock/ITT seems reasonable. Based on some quick analysis from the Simba backtesting spreadsheet, this seemed to have a similar standard deviation as 100% stock portfolio, which I think I would be comfortable with in retirement. Again, I haven't given that too much thought and am also curious to hear how others are considering leverage in their retirement years.Time for an annual update on my portfolio.
I have been running 84% domestic equities, 36% intl equities, and 80% ITTs since the start of 2023. After rebalancing at the start of 2024, I have decided to let my leverage naturally decrease through gains and contributions to hit my target leveraged AA solely in leveraged accounts, no longer compensating for the portion of the portfolio I can't leverage.
Here is my current portfolio, up ~$800k from this time last year:
Most of the portfolio increase has come from ongoing contributions, as our household income has increased substantially. As I am quickly approaching "Chubby FIRE" levels, I am considering a further decrease in leverage to reduce sequence of returns risk to provide optionality for a very early retirement / taking on projects that don't generate much income. As of now, my plan is to keep my 120/80 portfolio as long as I'm working a high-paying job and switch to 100/50 when I leave it. We will still have some income after that point, but not nearly as high.
I would love to hear others' thoughts on how you plan to adjust your asset allocation / leverage as you approach retirement portfolio levels. Also, any optimizations I'm missing in my current portfolio?
Regarding other optimizations, I'm aware there have been lots of good ideas presented in this thread, but I spent a lot of time establishing a baseline portfolio (with a big help from the summary document you put together) and am happy that it's now largely on autopilot other than quarterly rolling of futures and box spreads.
Statistics: Posted by director84 — Tue Aug 06, 2024 5:07 pm — Replies 3136 — Views 725099