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Bogle Says Count SS/Pension in Allocation
Splitter 01-01-2007, 11:25 AM | Post #190913 | 

The "Is my Social Security/Pension a bond equivalent" question has gotten much debate on this board. But until now I hadn't seen Jack Bogle's opinion on the subject.

In this interview with Scott burns entitled Heeding Advice of an Elder, Bogle says you should count Social Security and Pension income in your allocation. (Annuitized/Discounted for age). He also says not to count your house in your allocation if you are living in it.

I find this very interesting. Not only in and of itself, but because Bogle also mentions the "Your age in bond" rule of thumb. Many people think that too conservative and think it should be reduced by 10 or 20. What I found intriguing, however, is that if you did indeed count your Social Security/Pension as a bond equivalent, then the 'Your age in bonds' rule of thumb makes much more sense because it reduces the bonds in your actual portfolio.

Of course, counting your Social Security/Pension in your allocation brings up an obvious question: At what rate should you annuitize it?
But, that's a whole other can of worms. The main question being should you count it in the first place.

Any opinions? Is Bogle on the mark or ready for the rocking chair?

Originally posted in thread: 55894
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