A conservative rule of thumb is to keep anything you expect to need in cash or something very close to cash, between 5 and 10 years in substantially IG bonds, and longer term in equity or near equity (e.g. HY bonds). A more modern rule of thumb is to use timeframes of 0-3 years, 3-7 years, and 7+ years.
However you slice it, 20% in equity is more like a low risk portfolio for the beginning of retirement (age 65) than one half-way through that phase. It's not high risk but adding the equity changes things significantly. Here's Portfolio Visualizer's simulation, I substituted WSHFX for CGDV because CGDV latter has too short a life to work with PV. WSHFX hasn't returned as much as CGDV, but it has a lower std dev and is the best quick hack I could come up with.
This portfolio will almost surely return positive inflation adjusted returns as opposed to an all bond portfolio that gradually loses value over time. The question here is whether that matters since you're looking to fund your wife's expenses after your death, not grow a portfolio. The tradeoff is double the volatility (probably even a bit more with CGDV instead of WSHFX).
Looking at worst case, drawdowns between 3/29/22 and 4/30/22 9/30/22 were (from M* charts):
CGDV: -21.81%
SCHD: -15.43%
ICMUX: -4.76%
RSIIX: -4.26%
RCTIX: -3.51%
DHEAX: -1.89%
CBLDX: -1.12%
SWVXX: +0.10% (my guesstimate)
RPHIX: +1.07%
Equally weighted portfolio: -5.73%
I helped nudge an 80 year old I knew into an 80/20 portfolio, so I'm not knocking 80/20. But that portfolio had more than 20% in cash and near cash.
It really depends on how you view risk, both pragmatically (will the portfolio last long enough) and psychologically (can you sleep at night). If you're trying to replace a pension one thought is a (possibly deferred) annuity. An annuity is just a stream of payments like a pension, which is why I bring it up.
An annuity would provide lifetime income to your wife, much as your pension is providing lifetime income to you. If you defer the income (either with a deferred annuity or a deferred income annuity), then there are no income payments until later. Since you're thinking about this portfolio as a replacement for your pension, it doesn't sound like you need the income stream until your pension vanishes.
A deferred fixed annuity can also guarantee that you won't lose money. As always, TANSTAAFL. The safer the investment, the lower the return. But since you expressed concern about bond funds possibly losing money it seemed worth mentioning this feature (drawback?) of some annuities.

I have one account that I tell myself is a safe spot, but is it really?
Equal amounts in the following funds.
RPHIX
CBLDX
ICMUX
RSIIX
DHEAX
NRDCX
RCTIX
SWVVX

What is a safe spot? In 2022 many bond funds lost 5-12%
EGRIX easily beat the funds above in the last several years
Within stocks:
QLEIX has better performance and a sharper ratio (risk/reward) than VOO/SPY in the last 3 years.

I have one account that I tell myself is a safe spot, but is it really?
Equal amounts in the following funds.
RPHIX
CBLDX
ICMUX
RSIIX
DHEAX
NRDCX
RCTIX
SWVVX

APDPX has been on my best list of funds for months, but not for DT.
In April it was down 1.8%. In 2024 HOSIX goes up extremely nicely from left to right, while APDPX goes down
Since 01/2022: HOSIX made 32+% APDPX 35+%
But HOSIX SD is at 1.3% vs 2.6%
HOSIX has the best Sharpe > 3 of all the funds at Fidelity.
The 30 day yield of HOSIX=6.6...DHEAX=5.5%...SEMIX=6.2...SCFZX=5.4%.
We are not in a low-rate environment. 2025-6 would still be higher than years ago and if rates go lower, these funds would probably make 4.5%
My cloudy crystal ball says that the first 3 will make 5-6% in 2025...and 4-6% in 2026. See YTD chart (https://schrts.co/gGdZWGIt)
The idea is to get at least 4.5-5% in 2026 at the lowest SD possible.
But Schwab MMs still pay over 4%. Why would DT take a risk for another 1%? That's not for me to answer.
The future is unknown.
If you want to beat MM by a bit, go for RPHIX; see YTD (https://schrts.co/pmVkkFJw)
In the last 5 years, max loss for RPHIX was about -0.3%.
See a 3 year chart (https://schrts.co/VzvsMKJB).
Disclaimer: I don't currently own any of the above.

@dtconroe. I will be curious what your final decision is. I would also like to retract my recommendations. Those two funds - SCFZX and HOSIX - were stellar during the most recent period of higher rates but their yields have been dropping like a rock the past year. They were more suited for the past higher rate environment as was anything CLO related, DHEAX has more of a history but returned over 4% but once during its first six years of existence of mostly lower rates. Same with SEMIX with an even longer history but didn’t come close to 4% in the lower rate environment.
I believe your goal is 4% to 6%. The best advice I have seen in this thread was from @PRESSmUP that if you want to achieve 4% to 6% you have to venture out on the risk scale. Especially if the much lower rate scenario comes to fruition. Many would tell you to venture into emerging market debt which has shined the past many years and their yields haven’t been dropping drastically - think EIDOX and AGEYX which I hold. But definitely not for those who are risk averse and definitely not for you. To be honest 4% to 6% with little to no risk in a much lower rate environment is pie in the sky thinking. Best of luck with whatever you decide.

Junkster, thanks for your participation and suggestions on this thread. Realistically, my goal is for 4% returns since I can't get 4% CDs any longer--I am getting 4.31% with SNAXX money market currently, and I will continue using it as needed, but am not optimistic that MMs can stay above 4% much longer. Many of my current CDs mature in December, so I still have a couple of months to sort through my options.

@dtconroe. I will be curious what your final decision is. I would also like to retract my recommendations. Those two funds - SCFZX and HOSIX - were stellar during the most recent period of higher rates but their yields have been dropping like a rock the past year. They were more suited for the past higher rate environment as was anything CLO related, DHEAX has more of a history but returned over 4% but once during its first six years of existence of mostly lower rates. Same with SEMIX with an even longer history but didn’t come close to 4% in the lower rate environment.
I believe your goal is 4% to 6%. The best advice I have seen in this thread was from @PRESSmUP that if you want to achieve 4% to 6% you have to venture out on the risk scale. Especially if the much lower rate scenario comes to fruition. Many would tell you to venture into emerging market debt which has shined the past many years and their yields haven’t been dropping drastically - think EIDOX and AGEYX which I hold. But definitely not for those who are risk averse and definitely not for you. To be honest 4% to 6% with little to no risk in a much lower rate environment is pie in the sky thinking. Best of luck with whatever you decide.

Some of the funds recently mentioned have significant portfolio positions in derivatives, including SCFZX 33%, NRDCX 42%, CBLDX 10%. Other mentioned funds have 0% in derivatives including HOSIX, DHEAX , DBLSX.
I am curious if any other posters are concerned about the % of derivatives held by a given fund?

I certainly pay attention to them the way I pay attention to securitized debts and CLO's.
In the case of CBLDX, which I own, I can look up EUR/USD FWD 20250715 and discover that there is an active currency market. Ten per cent doesn't seem too large for me to worry about. It finished 2022 in the black; I have no idea how it will perform in a recession. I also see it is 15% cash, which suits my confirmation bias. I'm not holding it in the expectation that is anything like a CD or money-market fund.
DBLSX is 52% securitised. I can look up BATTALION CLO XI LTD too. I still don't know what it is, or how liquid it is.
DHEAX is 87% securitised. How liquid is FIRSTKEY HOMES TRUST or RESEARCH-DRIVEN PAGAYA MOTOR ASSET TRUST ?
HOSIX is 89% securitised. How liquid is BXHPP LTD or Sound Point Clo Xvi Limited?

When evaluating bond oefs, I have often avoided funds with high percentages of derivatives in that fund's portfolio. The Investopedia definition of derivatives is as follows:
"What Is a Derivative?
The term “derivative” refers to a type of financial contract whose value is dependent on an underlying asset, a group of assets, or a benchmark. Derivatives are agreements set between two or more parties that can be traded on an exchange or over the counter (OTC).
These contracts can be used to trade any number of assets and come with their own risks. Prices for derivatives derive from fluctuations in the prices of underlying assets. These financial securities are commonly used to access certain markets and may be traded to hedge against risk. Derivatives can be used to either mitigate risk (hedging) or assume risk with the expectation of commensurate reward (speculation). Derivatives can move risk levels (and the accompanying rewards) from the risk-averse to the risk seekers."
Some of the funds recently mentioned have significant portfolio positions in derivatives, including SCFZX 33%, NRDCX 42%, CBLDX 10%. Other mentioned funds have 0% in derivatives including HOSIX, DHEAX , DBLSX.
I am curious if any other posters are concerned about the % of derivatives held by a given fund?

Why not LCTRX? because HOSIX is better within the CLO space. HOSIX got the highest Sharpe > 3 for all funds at Fidelity.
Why didn't I recommend NRDCX while I like it? Because DT is looking for funds with more history, and it fell 1.6% this year during March-April.
SCFZX is another good one, but DHEAX beats it for 3 months +YTD. During March-April DHEAX was less volatile.
Basically, I'm back to HOSIX,DHEAX,SEMIX for DT. If you are not comfortable with CLO, disregard. Beyond that DT should invest based on his risk/reward and goals.
HOSIX manager changed the CLO % from 64% in 12/2024 to 55% this month. CMBS=25%, RMBS=8.5. Currently HOSIX 30-day sec=6.6%
I get weekly update. The last one
CLO: CLOs continue to be the largest segment of the portfolio (~55%). We continue to favor this segment of the
structured credit market as they allow us to get excess spread via our deleveraging CLO profiles. The average
floating rate coupon is around SOFR+350bps, which we believe is highly attractive for predominantly investment
grade exposure. This segment of the portfolio carries no effective duration, which reduces our exposure to
interest rate moves, especially the long end. We continue to think that the long end is at risk if the Fed cuts the
front end.
CMBS: CMBS continues to be we get most of the portfolio’s yield. We have had several successful CMBS exits
or payoffs over the past few months. We continue to look short maturity bonds tied to high performing properties.
We prefer higher coupons, but if the property is performing, a case can be made for a lower coupon, lower dollar
price bond.
RMBS: This is one of our liquidity buckets. Our Non-QM exposure is about half of our RMBS exposure (~4% of
the entire portfolio). We will likely continue to us Non-QM as liquidity piece. These are short WAL bonds, decent
coupons for the credit rating (senior bonds that we buy are AAA rated), and highly liquid. Especially with credit
spreads this tight, this is one of the areas we don’t mind parking in and waiting for opportunities to come to us.
We also have exposure to the HECM space. These give us a little more yield and some convexity to the overall
portfolio.
ABS: This is the smallest portion of the portfolio. The primary exposure we have here are to the SBA loan
space. There are a few deals that will be coming to the market after Labor Day weekend, which we will be
evaluating for potential inclusion.

HOSIX, DHEAX, CBLDX, and maybe DBLSX, look pretty good. LCTRX is interesting--I need to spend some time looking at this fund.

Fidelity has a free fund screener.
I looked for all bond fund (risk tab) + sorted by Sharpe ratio(risk/reward) + SD<2.
See this (<a href="https://fundresearch.fidelity.com/fund-screener/results/table/risk/sharpeRatio3Yr/desc/1?assetClass=TBND&amp;category=BL,CI,CL,CS,EB,GI,GL,GS,HY,IB,IP,MU,NT,PI,RR,TP,TW,UB,WH,XF,XP&amp;order=assetClass,category,standardDeviation&amp;standardDeviation=LS,2">link)
Then I switch to the overview tab, see (link).
To see 1,3,5 year performance.
The best funds for 3 years are
HOSIX leads the pack by a wide margin with Sharpe>3 and SD=1.28 and 3 years average of 9.1%. $49.95 fee at Schwab
LCTRX is great too. NTF at Schwab
CBLDX, SEMIX, SCFZX, DHEAX
The best for one year
HOSIX+DHEAX
For YTD
DHEAX, CBLDX, HOSIX

DT:I am now considering adding some very low risk bond oefs

No fund achieved lower loss than 1.5% in 2020 + 2022 + performance over 4% since
1/1/2020.
Even RPHIX lost more than 3% in Q1/2020.
Since 2023, I no longer hold more volatile funds for months. Only short term for 1-2 weeks trades. Think ICMUX,PIMIX,RCTIX.
I have been holding funds with low SD with good performance.
Of course, I add timing and always near the exit.
Since early 2023 bond OEFS had one of the best performances for 2 years; several had very low SD and made 20% in 2 years. Think HOSIX, CLOZ which I held for many months.
ICMUX made more than HOSIX in these 2 years by 1%, but I preferred HOSIX.
chart (https://schrts.co/pMytFkvN)
2025 proved again that volatility can show up any time. The only way was to be out.
Since mid-April bond OEFs did great.
Bottom line: there are no funds with very low SD (under 1-1.5% loss any time) with good LT results that you can hold for years.
But, bond OEFs should perform well in the next 1-1.5 years.
So, looking at the last 3 years...
HOSIX would be a good choice with dist close to 6%. The manager, whom I spoke with, is about low SD.
SEMIX/SEMRX and DHEAX are also good and similar. SEMIX has lower SD per the chart.
Chart (https://schrts.co/CuANzpzj)
BUBIX looks good, but I prefer funds that can make 1-2, maybe 3% more annually.
Just YTD, the 3 funds I mentioned lost about 0.5%, but are 1-2% ahead of BUBIX.
Someone who is very risk averse and holds mostly bonds, would love to make another 2% more annually.
Disclaimer: currently, I don't own any of the funds above.

Yep, I am very familiar with DHEAX, having owned it for years. I am also very familiar with SEMMX, also having owned it in the past, but dumped it after its terrible performance in the 2020 crash. I have not looked at it since Medalist took it over

Just to be clear, I'm not suggesting SEMMX/SEMPX, but the other, investment grade fund for the reasons I mentioned.

You mentioned DHEAX in an earlier post, @dt, and I think it is right up your alley. SEMRX, the IG cousin of SEMPX/SEMMX, has tracked DHEAX closely since a management change in 2023, when Semper and a group called Medalist merged. In the last year, the DHEAX and SEMRX charts are practically indistinguishable, with barely a blip during the April swoon.
Might be worth a look for another holding in the DHEAX ballpark, if only to spread the risk a bit in what's been and may well continue to be an attractive space.

Yep, I am very familiar with DHEAX, having owned it for years. I am also very familiar with SEMMX, also having owned it in the past, but dumped it after its terrible performance in the 2020 crash. I have not looked at it since Medalist took it over

You may want to look into CBLDX, DHEAX, ICMUX, and RCTIX.

I am pretty familiar with these funds. DHEAX use to be one of my major bond oef holdings before the 2020 crash. Thanks for the recommendations.

You mentioned DHEAX in an earlier post, @dt, and I think it is right up your alley. SEMRX, the IG cousin of SEMPX/SEMMX, has tracked DHEAX closely since a management change in 2023, when Semper and a group called Medalist merged. In the last year, the DHEAX and SEMRX charts are practically indistinguishable, with barely a blip during the April swoon.
Might be worth a look for another holding in the DHEAX ballpark, if only to spread the risk a bit in what's been and may well continue to be an attractive space.

You may want to look into CBLDX, DHEAX, ICMUX, and RCTIX.

As a retired investor, "I dislike volatility!", to quote keppelbay. Especially in the current uncertain market and political environment, preserving capital is more important to me than chasing returns on capital. I prefer to err on the side of caution since I don't need a lot more money, and all my expenses are covered by generous pensions and Social Security.
Currently, my conservative portfolio allocation is as follows:
- 45% Bond OEFs (APDPX, DHEAX, PYLD and RCTIX)
- 30% CDs
- 25% Alternative OEFs (QDSNX and QLENX)
...
P.S. Based on Portfolio Visualizer, and back testing with a start date of July 2023 (inception date of PYLD), my current portfolio would have had an annualized return (CAGR) of 10.5% with a standard deviation of 2%, and a 0.47% correlation to the S&P 500.

July 2023 through Aug 2025 was a calm period. If numbers from that period look too good, they are.
I ran PV with your portfolio, dividing the bond funds equally (11.25% each) and the alts equally (12.5% each). I also prepared a second portfolio, substituting PIMIX for PYLD to get a modestly longer time frame.
From this PV analysis (July 2023 - Aug 2025) you can see that this was a reasonable substitution. Same annual returns, same std deviation, same 0% max drawdown.
When one drops the original portfolio from the input, then PV calculates over the period April 2022 - Aug 2025. This adds a downdraft (April - June 2022) that the shorter period doesn't have. The annualized return drops from 10.9% to 8.8%, while std dev increases from 2.0 to 2.9.
You might consider substituting similar funds with longer lifetimes to get estimated performances over even longer time periods.
Maximizing Sharpe ratio for the original funds (substituting ICSH for CDs) PV says:to use:
APDPX 20.71%
DHEAX 72.72%
QLENX 6.57%
The annualized return is a little less (10.45% vs. 10.96%), but the std dev is cut nearly in half (1.10 vs. 2.01). However, this too is calculated over a very short time period.

On another investment forum, a thread has recently been started to share portfolio allocation thoughts & strategies for discussion/comparison. I thought it would perhaps be a worthwhile exercise and/or learning experience to have a similar thread on this topic on this forum. Here was my contribution:
As a retired investor, "I dislike volatility!", to quote keppelbay. Especially in the current uncertain market and political environment, preserving capital is more important to me than chasing returns on capital. I prefer to err on the side of caution since I don't need a lot more money, and all my expenses are covered by generous pensions and Social Security.
Currently, my conservative portfolio allocation is as follows:
- 45% Bond OEFs (APDPX, DHEAX, PYLD and RCTIX)
- 30% CDs
- 25% Alternative OEFs (QDSNX and QLENX)
Once the CDs mature next year, I may shift my portfolio allocation to the following:
- 60% Bond OEFs (will probably add BINC and/or ESIIX)
- 25% Alternative OEFs (no change)
- 15% Allocation OEFs (probably split between PMAIX and PRCFX)
Hopefully, this will be a "sleep well portfolio" by keeping the standard deviations of the allocation and the alternative OEFs below 10%, and the bond OEFs below 5%. Of course, nothing is set in stone. I will always be dancing near the exit if the circumstances warrant it.
Good luck.
P.S. Based on Portfolio Visualizer, and back testing with a start date of July 2023 (inception date of PYLD), my current portfolio would have had an annualized return (CAGR) of 10.5% with a standard deviation of 2%, and a 0.47% correlation to the S&P 500.

If you are thinking about a longer term CD (say a year or more), you might consider streamlining an IRA transfer by using a 60 day rollover (once per year is the limit).
You could withdraw the IRA money into your taxable Schwab account and on the same day (or perhaps the next day to be safe) initiate a deposit into an outside CD (IRA). That would constitute a 60 day, non-trustee-to-trustee rollover. If you keep to 12 month or longer CDs, you could rinse and repeat fairly easily.

Yep, that is a possibility, but as long as I can get 4.3% SNAXX money market returns in my Schwab IRA, I probably will not do that. I can still move some IRA money out of fixed income and dabble in some bond oefs to a limited extent. I did that for years, and I am willing to do that again for a small part of my IRA investing. There are some very conservative bond oefs, like DHEAX/DHEIX, that I would be willing to use if CDs are no longer attractive.