How to think about bond allocation in fatFIRE
Late 40s. $12M net worth, ~$10M fatFIRE (net worth minus house). The $10M is pretty much all a three-fund portfolio. But bond allocation is very low. ~5-6% currently.
I figure I should get to at least 10% to have 2 years‘ expenses plus a little (annual expenses are ~$400K, kid in private school, VHCOL).
But should I actually be aiming for 20% or more in bonds? Traditional advice I think would say 70% stock allocation by 50yo.
I‘m heavily biased by the long bull run and bonds looking like a drag on my portfolio for basically as long as I’ve been investing. I’m not saying that’s correct, just the emotional bias I know I have here.
So, more bonds?
And, assuming so, best way to hold them between taxable and retirement accounts?
(I also keep a couple hundred K in cash, but nothing that affects the numbers much.)
Edit to add: We’re still working for, say, 6-ish more year until the kid goes to college. Salary covers living expenses plus a little, so not in spend down phase. I’m also ignoring (likely large) inheritances on both sides on a hopefully 20+ year timeline.