How Social Security Should Affect Asset Allocation during Retirement

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How should Social Security, annuities, pensions and other forms of guaranteed income affect our asset allocation during retirement. Some argue that we should treat them like bonds. They offer near guaranteed, stable income, and therefore, they should constitute part of our bond allocation.

A better approach, in my opinion, is to simply reduce or annual income requirements be the amount of these guaranteed payments. Then base our asset allocation on any additional income we need to generate from our investments.

I walk through both approaches in this video.

Resources mentioned in video & some bonus resources

Annuity Calculator: https://financialmentor.com/calculator/present-value-of-annuity-calculator

Personal Capital (Investment Tracking, Retirement Planning): https://robberger.com/go/personal-capital/yt-65

Kitces' article: https://www.kitces.com/blog/valuing-social-security-benefits-as-an-asset-on-the-household-balance-sheet/

Bengen article: https://www.retailinvestor.org/pdf/Bengen1.pdf

Kitces' interview: https://www.morningstar.com/articles/702029/social-security-part-of-your-asset-allocation

Forbes article on valuing social security: https://www.forbes.com/sites/baldwin/2016/03/15/whats-your-social-security-benefit-worth/?sh=107ef6ca64d8

Social Security Valuation Calculator: https://docs.google.com/spreadsheets/d/1Hzxj9VSC8GhF439C1udo5uQlnbjDPjmxFbgfLddcAKE/edit#gid=1540960016

Investing Tools & Resources

📚 My Book (Retire Before Mom and Dad): https://amzn.to/2MsRJ9B
📈 Personal Capital (Investment Tracking, Retirement Planning): https://robberger.com/go/personal-capital/yt-65
⛱ New Retirement: https://robberger.com/go/new-retirement/yt-65
📊 Stock Rover: https://robberger.com/go/stock-rover/yt-65
💰 M1 Finance $30 Bonus (IRA & Taxable Accounts): https://robberger.com/go/m1finance-bonus/yt-63
📊 Morningstar (Fund Research): https://robberger.com/go/morningstar/yt-65
💵 Tiller (Budgeting): https://robberger.com/go/tiller/yt-65
🏆 Best Investment Tracking Apps: https://bit.ly/3wSbKZa

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ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (https://amzn.to/3by10EE)

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

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