How to use a bond tent to reduce sequence of returns risk

Hack Your Wealth

#68: This week, in part 1 of a 3-part series on asset allocation, I talk with Karsten Jeske, CFA, about how to implement bond/equity glide paths, both leading into retirement and in the initial years after retirement.
Getting your asset allocation right, and shrewdly changing its composition in the years just before and just after retirement is one of the most impactful things you can do to offset sequence of returns risk.
If you want to understand how to do this effectively, don’t miss today’s episode!

We discuss:

• The intuition behind bond tents and equity glide paths
• Pros and cons of a bond tent strategy (what you gain, what you lose)
• How to determine the optimal % peak allocation of bonds
• How long you should optimally stretch each glide path over (and why each side probably should be different durations)
• When is a longer vs. shorter glide path better in terms of returns and risk
• When is a bond tent NOT worth it and you should just stick with 100% equities

Check it out here:

https://hackyourwealth.com/asset-allocation
What do you think about the bond tent strategy? Let me know by leaving a comment.

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Links mentioned in this episode:

• ERN's cashflow modeling spreadsheet
• ERN's posts on glidepaths: part 1, part 2
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 1) (HYW035)
• The shockingly un-simple math behind retirement safe withdrawal rates (Part 2) (HYW036)
• Schedule a private 1:1 consultation with me
• HYW private Facebook community

Intro/Outro: Old Bossa by Twin Musicom.