Retirement Planning: Age ≠ Automatic Bond Shift (e.g., XLF, IBOXX)

Retirement age does not mandate shifting to bonds. Financial planners caution against one-size-fits-all rules like subtracting age from 100 for fixed income, emphasizing liquidity needs, growth goals, and time horizons instead. Asset allocation should be dictated by a tailored financial plan, not generational rules. Pre-retirees should increase cash and low-risk fixed income two to three years before retirement to mitigate sequence-of-returns risk. A bucketing strategy is recommended: one year of expenses in cash, four years in low-risk instruments, and more than eight years in long-term investments. Bond selection favors Treasuries and high-quality corporate bonds, with bond ladders for diversification and to avoid high-yield risk. Avoid chasing yield with lower-quality bonds.