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A bond is essentially an IOU: you lend money to a government or corporation, which pays periodic interest and repays the principal on a set date. Bonds are generally less volatile than stocks and provide stability and income, which is why portfolios often add more bonds as retirement nears. Their prices fall when interest rates rise, and vice versa.
A retiree might hold more bonds so the portfolio swings less when they need to withdraw.
The classic "100 minus your age" rule for stock-bond allocation has not aged well. Here is a more nuanced approach based on your timeline, risk tolerance, and income sources.
Read article →Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →