Disclaimer: This tool is for educational and informational purposes only. It does not constitute financial, investment, or tax advice. Calculations use simplified actuarial models and assumptions that may not reflect your individual circumstances. Consult a qualified financial advisor before making investment decisions.

Retirement Portfolio Allocation Tool

Optimal equity/bond allocation using total-wealth analysis and the implied equity risk premium

Personal Information

Current Age

Gender

MaleFemale

Pension

Monthly Pension Payment ($)

Pension System

Pension has COLA adjustment

Social Security

Monthly SS Benefit ($)

Spending

Monthly Spending Need ($)

Portfolio

Total Investable Portfolio ($)

Target Equity Allocation

Use my own target instead of market-derived allocation

Market-derived target: 50.6%

Present Value of Income Streams

PV of Pension

$268,064

Discount rate: 4.4%

PV of Social Security

$341,859

Discount rate: 4.3%

Life Expectancy

17.3 years

SSA actuarial life tables (2021)

Total Wealth Analysis

$1,109,923

Component	Value	Share
Investable Portfolio	$500,000	45.0%
PV Pension	$268,064	24.2%
PV Social Security	$341,859	30.8%

36-Month Liquidity Buffer

Monthly Income (Pension + SS)

$4,000

Monthly Spending

$5,000

Monthly Shortfall

$1,000

36-month withdrawal buffer: $36,000 ($1,000/mo x 36 months). This is held in high-quality short-duration assets and counts toward your bond allocation.

Portfolio Allocation Recommendation

Target (Total-Wealth Basis)

Based on an equity risk premium* of 4.4% and risk-free rate of 4.3%:

Target equity: 50.6% of total wealth = $561,340
Target bonds: 49.4% of total wealth = $548,583

Bond-equivalents already held: $645,923
(PV Pension + PV SS + liquidity buffer)

Recommendation (Your Portfolio)

Equities: 92.8%

$464,000

Bonds: 7.2%

$36,000

Even at 93% equities in your portfolio, your total wealth equity allocation only reaches 41.8% — short of the 50.6% total-wealth target by $97,340. Your bond-equivalent income streams (pension + SS) make up too large a share of total wealth.

Allocation Summary

Allocation	Equities (%)	Bonds (%)
Recommended Portfolio	92.8%	7.2%
Achieved Total Wealth	41.8%	58.2%
Target Total Wealth	50.6%	49.4%

Key Insight: Your pension and Social Security represent 55%of your total wealth. These income streams act as bonds on your personal balance sheet. This means your investable portfolio should hold a higher equity allocation than conventional age-based rules suggest, because the "bond" portion of your total wealth is already large.