Now I've heard everything "modernize" a "rule".
Reminds me of a ... I met once who didn't understand when I told him I'd set up a "file server" in my house for the past 20 years. His blank stare turned to englightenment when I said I have a "private cloud".
On another note, isn't someone publishing an article on this topic every other week? I really don't understand why anyone has to be obsessing about 4% or 7%. You live in retirement based on how much money you have saved up and you withdraw based on how much you are required to because of RMD.

FYI: Christine Benz interviews Ed Slott. Eight years after their arrival, backdoor Roth IRAs are alive and well. Joining Christine to discuss the maneuver is IRA expert Ed Slott. He is author of the newly revised "Retirement Decisions Guide."
Regards,
Ted
https://www.morningstar.com/videos/878097/backdoor-roth-ira-conversions-alive-and-well.html

@MikeS , before you make any transfer, ask whether some of the funds you currently have will transfer to ML. Some may not and you will have to choose from funds they sell, as they d o not sell all funds. Many Vanguard Funds are not available on their platform for instance. It is why I left ML two years ago although I liked my advisor.

Well...when did you buy? If 3 years back I guess you can hold.
Then again...

Thanks very much Bee. I will explore whether an extra annuity is an option. I work for the federal government so I don't think they offer this but I will ask. We have 3 sources of income as feds. 1) An annuity that's based on years of service. 2) Social security. 3) The Thrift Savings plan which is like a 401K program with a limited set of investment options -- equity and bond indexes.

Not often mentioned, but another planning topic is your debt to income ratio. Prior to retirement I had very good credit (partly due to my low debt to a higher working income). This "debt to income ratio" will change instantly in the first months of retirement...probably due to a lower income... and as a result your credit score may suffer. More importantly you will qualify for less credit.
I applied for a 30 year mortgage (actually a 15/15 ARM @ a rate of 2.875 fixed for the first 15 years) and also took additional cash out on this loan. I planned to use the cash for home improvements that I knew I now had time to do myself (retirement offers time to do this) as well as serve as a on demand cash for opportunities. Another story for another time, but cash was king back in 2010.
This decision to refinance my home loan prior to retirement effectively locked in my principle/interest payments for 15 years into retirement and since I completed this process while I was still working I qualified for a much larger mortgage due to my higher "debt to income ratio".

Take a close look at the retirement benefits that are being offered through your government employer. Ten years may be a bit off in the future, but start paying attention to what's being offered now and what might be on the chopping block.
Employers usually have a retirement packet that they share with new retirees. Gather as much information about the retirement process with your employer. I did this and discovered there were many choices I needed to consider with this part of retirement planning. In my case, I selected to move some of my 403b investment to purchase an "extra annuity" through my employer (a somewhat unique option). I shared this option with a few financial planners and they confirmed that using some of these 403b dollars to buy this annuity was a very good option. I fine tuned the amount of the "extra annuity" based on my projected retirement income needs.
These financial planners typically will not be experts on all the options that your employer offers...it's your job to bring these choices/options for discussion.

I was hoping to request some advice. I am meeting with a new financial planner today to do some retirement plannig and review our investment portfolio. I'm about 10 years from retirement and will have a government pension. I'm interested in the planner providing recommendations on asset allocation and steps we should take to achieve our goals. I would value the board's suggestions on questions I should ask the planner or links to such questions. The planner works for Merrill so I'm sure he will be recommending their various products. Our situation is a little complicated in that we have a special needs son that we need to plan for. Thanks so much for your advice.

"Zeroes," of course, you buy at a discount to face value.

And the reason they’re priced below face value is that you have to hold them until maturity to get that face value out of them. Until than, they’re generally worth less (although interest rate fluctuations in the broader market could temporarily drive their market value higher or lower)
But “face value” (what they’re worth at maturity) never changes. The biggest risk with zeros (assuming you hold them until maturity) is that the rate at which they were priced may appear very low compared to rates by the time you redeem them. For example, a zero priced to yield 5% to maturity in 20 years might seem attractive today. But if in 10 years 10% yields become common, you’re going to be a bit unhappy holding that 5% zero with still another 10 years left to maturity.
Just a fly by the seat of the pants calculation - Today you might buy a zero yielding 5% annually and maturing in 2038 (20 years from now ) with a face value of $2650 for a price of $1000. Sounds like a discount. But is it really?

@davfor
I wandered a bit from your subject post, relating to the Mackinac Bridge in the article photo; which has a 5 mile span connecting the lower and upper peninsulas of Michigan.
As to the subject, I'm not sure why NYT chose this particular piece; but Mr. Lee is likely not wrong about possibilities. There is a very large boat load of money in the form of bond issuance globally.
If one were to envision the financial markets perched upon an eight leg stool of bonds and other cash substitutes; not all legs would have to break to cause a problem.
CDS (credit default swaps); being insurance against bond defaults and other forms of derivatives are still in place, not unlike the market melt 10 years ago. CDS instruments, to the best of my knowledge are still not monitored or under scrutiny by any official agency, U.S. or global. Although I am sure the Fed. and U.S. Treasury know the amounts.
Apologies for the thread drift via the "bridge".....I don't like or appreciate excessive thread drift either.
Regards,
Catch

“Turkey is the canary in the coal mine,” Mr. Lee said on Friday. “We are going have another crash that will be worse than 2008 in certain ways.”
Ha! Love the cliche. But my sense is we need more coal mines to house all the canaries. Bill Fleckenstein thinks it’s Tesla. I’m thinking Bob Mueller. Who knows?
I will say that perhaps half of the big U.S. market downdrafts I can remember over the past 20-30 years have had some root in the EM markets. Probably because they’re the most sensitive to credit / interest rate issues which than spread to the developed markets. The 1997 Asian Market Crisis is one. https://en.m.wikipedia.org/wiki/1997_Asian_financial_crisis

I rather wish that the Times had taken, well, the time to consider a simple question: "is there any reason to believe this guy?" Our only two bits of data are (1) European investment funds buy his newsletter and (2) he's been bearish for years. Neither of those, on face, either qualifies or disqualifies him so I'm left thinking "uh huh, they somehow find this one guy and he ..."

... I personally have decided to use the S&P 500 and stop further in depth allocations such as much discussed finer granular reits, mlp's, utilities etc. S&P500 contains all of the aforementioned within the index. ... The argument can be made for more granularity outperforming the S&P500, but i will live with the simple solution. I like the fact mutual funds can easily reinvest dividends/cap gains if needed while some ETF's cannot (easily). I also like the fact that by the nature of the SP500 index it gradually picks the winners for me and discards the losers. just my 2c.

Hi shipwreckedandalone,
Thanks for commenting. (Worth a lot more than 2c). All valid points. It’s not clear to me whether this represents a portion of your total invested assets or all of them. I suspect it’s the former. That said, I don’t think the argument for real estate or any other granular asset class rests only on maximizing return. There may be other considerations like diversifying assets (and hopefully mitigating risk), increasing income stream, hedging against the unexpected (rampant inflation, depression, war, tax law changes, etc.)
If I were age 25-40 and gainfully employed I’d be inclined to put 100% into growth (even possibly the S&P 500) and let her ride come Hell or high-water. A single fund (2 or 3 at most) would work fine. Even at age 40-50 that might make sense - but would require a stronger risk appetite. At 70 or older (with perhaps a 20-year life expectancy I believe an all-growth portfolio foolhearty, unless one is trying to build assets for posterity (estate planning). In that case, long as your own funding is assured for your lifetime, a 100% growth portfolio might still make sense.
To glean an appreciation of how much a 100% S&P 500 investment can fall in a relatively short time we need go back hardly more than a single decade (from Wikepedia): “The US bear market of 2007–2009 was a 17-month bear market that lasted from October 9th 2007 to March 9th 2009, during the financial crisis of 2007-2009. The S&P 500 lost approximately 50% of its value.”
Now - to sit still and endure the pain for 17 consecutive months while watching your total investment egg fall by 50% takes a great deal of intestinal fortitude. And, remember that on March 8, 2009 after 17 months of free-fall, there was no guarantee the market would reverse direction. History has taught that these downturns can persist for much longer. If an index can tumble 50% in 17 months ... it can just as easily fall 60 or 70% over a longer time. No law says it has to stop at 50%. (It’s likely real estate fared even worse during that period.)
In a nutshell, it depends a great deal on your life situation and ability to endure punishment. I think all of us could do a better job relating our age and years to / into retirement when discussing our allocations. One size does not fit all. Such understanding might benefit the younger newbies - if any.
PS: Just my humble mumble. I am not a qualified advisor. Other points of view welcomed.

Hi @johnN: A good read as to why bonds need to be part of an investors asset allocation. Currently, bonds are about 25% of Old_Skeet's asset allocation. A few years ago I was at about 30% bonds but gradually reduced to add some convertibles, commodities, business development, infrastructure, and real estate. Now, I'm thinking since equities are fully valued it's time to start gradually increasing my bond allocation back towards the 30% range. This should not be to hard to do as my portfolio generates a good bit of excess cash over and above what I take as distributions. My late father had a saying ..."Income never goes out of style."

... do you consider REIT funds as part of your equity allocation?

Good question. I can’t recall its being batted around much before. Agree with others who say that it depends a lot on the particular REIT fund and perhaps more importantly the individual investor - particularly how he/she has structured their portfolio. Conceivably they could fit real estate within their growth, income - or even alternative investments category.
I haven’t held them often. They’re highly cyclical - scary in certain markets. Didn’t seem worth the added risk. However, I bought into one three or four years ago during a very depressed period. Did great for a year or so, but has stagnated since.
I include the real estate fund within the “real assets” portion of my portfolio as one of four holdings. The others consist of a gold fund, an infrastructure fund, and T. Rowe’s Real Asset fund (PRAFX). While the group as a whole has done poorly for the past year or so, the four funds do tend to move in different directions, dampening volatility.
BTW - Price overweights real estate substantially within its Real Asset fund. One might conclude from that that that they considers it to be a part of that broader category.

I have gone round and round though the years about the issue of how granular a portfolio should be. I think a REIT allocation is probably good, however I personally have decided to use the S&P 500 and stop further in depth allocations such as much discussed finer granular reits, mlp's, utilities etc. S&P500 contains all of the aforementioned within the index so I will stop there. The SP500 holds 3% reits and utilities so good enough for me. The argument can be made for more granularity outperforming the S&P500, but i will live with the simple solution. I like the fact mutual funds can easily reinvest dividends/cap gains if needed while some ETF's cannot (easily). I also like the fact that by the nature of the SP500 index it gradually picks the winners for me and discards the losers. just my 2c.

@LB, v good
I once held a mix of CGMRX, VNQI, traded FRESX for VNQ (which underperforms it slightly), but a few years ago traded all for FRIFX, which is steadier.
None of them notably decorrelates with, you know, VTI.

FYI: Two years ago, Andrew Hallam and his wife considered buying a condominium in Victoria, British Columbia. The condo was about 100 feet from an ocean inlet, in one of Canada’s most beautiful cities. Just one thing made them nervous. It was across the street from a marijuana dealer.
Regards,
Ted
https://assetbuilder.com/knowledge-center/articles/budding-hopes-for-marijuana-stocks

Generally, I consider REITs as part of my equity allocation except for FRIFX, which performs more like a high yield bond or conservative allocation fund. I had FRESX in my portfolio for about 20 years and it was an excellent diversifier. As I got closer to retirement, I shifted about half the money into FRIFX. Now that I’m retired, I’ve shifted the entire real estate allocation into FRIFX due to its lower volatility, higher yield and better risk adjusted returns. REITs are not perfectly un-correlated with stocks but different enough to make a difference. Eg, FRESX had excellent returns during the 2000-03 bear market, the best of my portfolio. However, in 2008, it performed worse, but rebounded remarkably in 2009.

And yet there can be long periods where bonds win:
https://cbsnews.com/news/bonds-beat-stocks-over-30-years-so-what/