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How do I determine if a bond fund is right for my portfolio?

I'm 63 years old and unemployed. I'm not working because of health issues. I did not save much for retirement. I have 100 shares of a specific stock, a 401(k) with a $50,000 Vanguard Institutional Index, and $12,000 in a Roth Schwab Total Stock Market Index. Should I have a Bond Fund and if so, what kind?

Retirement Savings, Bonds / Fixed Income
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March 2017

You are fortunate to work with two reputable companies: Schwab and Vanguard. Because the answer to your question involves assessing an investment mix and the related amount of risk that makes sense for you, I suggest you have conversation with both companies. See who's most helpful and has the best answers. Here are suggested talking points:

  1. Explain what you need and ask to be directed to the person who can best help you. You want someone who's interested to help. You'll know if the person is willing to listen. Don't be afraid to ask for someone else if you don't understand or like that person.
  2. Give that person a list of your income, cash needs (your household budget), and your investments. Tell the person everything you find relevant (e.g. health issues, expected inheritance, financial support, ect.).
  3. Ask that person to assess your need, ability, and willingness to take risk.
  4. Once you understand the overall risk that makes sense for you to take on, ask for an investment mix recommendation that would fit that risk (including stocks and bonds). Here, you'll get the answer to your question :-)
  5. Ask if holding 100 shares of the stock you have is wise in your situation.
  6. Ask about all fees involved in helping you manage your money and about the ongoing service and guidance you can expect.
  7. Consider bringing all your investments to the company you like most. It'll make your life easier and allow them to serve you better.

With all best wishes!

March 2017
March 2017
March 2017