Bond Ladders in 2024: How to Build a Bond Portfolio for Your Retirement

Comments · 114

• FI

  @fialee8ca132 · 2 years ago

  Bonds are essentially your "cash" cushion to hold you through the downturns.  I would think 3-5yrs of expected after tax expenses.

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• EL

  @Elephantine999 · 2 years ago

  Really smart guy and an excellent communicator.

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• CH

  @Chris-hw2nx · 2 years ago

  Great video. I chuckled a little when I realized you said  "bid/ask spread" not "big-ass spread" LOL😅

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• DF

  @DF-by7gy · 1 year ago

  I learned so much! Thank you.

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• BL

  @blueberryma · 2 years ago

  One of the many aspects of these videos is that They question basic assumptions. In this case, why even hold bonds at all, and why follow the suggested ratios like 60/40. People who question assumptions and know that finding the right question to ask is the hard part, and once you have the right question, finding the answers becomes much easier. <br><br>I had watched this video right after watching your “Why most people pick the wrong acid allocation for early retirement” video. In that video, it focused on having fixed assets such as treasuries, money markets and CDs so that you could avoid selling equities in a down market. A suggestion was that having 4 years of expenses in the fixed income just mentioned was the correct approach, and to ignore percentages. I agree, but the bond laddering video left me unsure about some key points. I think this video said that bond funds could be part of that “first bucket” (please correct me if I am wrong), which was not mentioned in the video that I referenced. So should bond funds count in the “protection bucket”? Or is it of more use in providing income to supplement guaranteed income to reach my expenses? And if so, why not consider a high dividend fund like FDVV instead of bonds to generate income. Currently my protection bucket has cash (for emergencies) and a CD ladder for protection. My bonds are there to, well who knows, let me have 20% so I can be a cow and follow the herd? That is why I am thinking of moving some of my bonds over to high dividend ETF.

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• AK

  @AkweliParker · 2 years ago

  Masterclass, James 🔥🔥 Most helpful breakdown of bond ladders I’ve come across—great viewer question, superb explanation!

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• MA

  @mariastreit6815 · 2 years ago

  Best overview on this topic I&apos;ve ever seen. &nbsp;Thanks, James!

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• AM

  @amyw.9477 · 2 years ago

  This was a great explanation! &nbsp;Thanks for pointing out the importance of protecting purchasing power, instead of just preservation of capital.

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• 19

  @1968Rking · 2 years ago

  Bonds allow you to preserve principal and generate steady income. &nbsp;If you hold bonds &nbsp;to maturity, it doesn&apos;t matter if the price goes down (as they did in 2022). &nbsp;Assuming no default, which are extremely rare with investment grade bonds, &nbsp;you get 100% of your principal back at maturity. &nbsp;You can also buy tax advantaged muni bonds. &nbsp;With stocks, you need to sell them to raise cash to pay your bills. &nbsp;If the price of those stocks goes down when you have to pay your bills, &nbsp;you have to sell at a loss to raise cash. &nbsp; If that happens early in your retirement, you are going to exhaust your principal more quickly in stocks. &nbsp;And, if the price of the stocks has gone up, you are going to pay capital gains every time you sell. &nbsp;I like bonds because I would like to be able to enjoy myself in retirement by earning secure and predictable income (that allows me to &nbsp;budget my income accurately) and I would rather not have to constantly worry about what the stock market (or bond market) is doing.

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• JE

  @jeffspon · 2 years ago

  This is the clearest explanation I have ever heard on deciding how much one should hold in bonds and what type. &nbsp;Well done and THANK YOU!

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• JO

  @jojocol · 2 years ago

  Excellent video. This answered so many questions for me. I really appreciate your insight.

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• GE

  @GeorgeGodfrey-zk4gs · 1 year ago

  This really made me reconsider my current safe money strategy.