BiggerPockets Money Podcast The Portfolio that Supports a 5% Safe Withdrawal Rate | Frank Vasquez
Jul 15, 2025
Frank Vasquez, a former lawyer and host of the Risk Parity Radio Podcast, dives deep into reinventing retirement strategies. He challenges the typical 60/40 portfolio, introducing a risk parity approach that diversifies across various asset classes. The conversation highlights the critical timing of transitioning from saving to spending, optimal allocation of assets, and the psychological shifts necessary for financial independence. Frank emphasizes a holistic view of wealth that prioritizes well-being and intentional spending over mere accumulation.
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Construct a Risk Parity Portfolio
- Build a risk parity portfolio with 40-70% equities, 15-30% treasury bonds, and 10-25% alternatives like gold and managed futures.
- Diversify the equity portion into half growth and half value stocks to reduce risk and enhance rebalancing opportunities.
When To Transition Portfolios
- Begin transitioning to a retirement portfolio once you reach about 80% of your FIRE number or roughly five years before retirement.
- Time your transition when your current portfolio is near an all-time high to avoid retiring at market lows.
100% Stocks for Accumulation
- In the accumulation phase, hold 100% equities if you can tolerate volatility without panic selling.
- Hold stocks in categories like total stock market and small cap value to ease later diversification when transitioning to retirement.
