Q. I'm 53 and have $300,000 in a 401(k) plan. Until recently about 80 percent was invested in stocks of different types. The other 20 percent was in a stable value fund. In March I moved the entire amount to the stable value fund. I plan to retire in about 12 years. After the crash of 2008 my tolerance for the ups and downs of stocks is pretty much zero.

I can live with a 4 percent percent annual return on my investment, but the stable value fund is returning much less. I could move a large portion of the stable value money into my plan's bond funds. I have several choices that look attractive compared to the return on the stable value fund. Here are some of the choices: Wells Fargo Advantage International Bond Fund Institutional Class, Spartan Intermediate Treasury Bond Index Fund - Investor Class, BlackRock U.S. Debt Index Non-Lendable Fund F, and PIMCO Total Return Fund Administrative Class.

I'm thinking about moving 20 percent into each one of these funds and leaving 20 percent in the stable value fund. I'm confused about the impact on these bond funds if and when interest rates start going back up. I suspect they eventually will.

Most of these funds appear to be heavily invested in short and intermediate term bonds. Should I assume that if rates do start back up in the next few years, they would be able to adjust to the rates as they rise? If interest rates start back up, how much risk is there that there would be a 2008 type crash again— but this time in the bond market? I lost about half of my savings in 2008 and have managed to make most of it back since— but I really don't want to go thru that again. —-R. K., Cedar Park, Texas

A. Fortunately, you’ve got 10 to 12 years before you have to start making withdrawals. We might be back to more normal interest rates by then. Those already retired are facing your fear right now. With long Treasury yields below 4 percent, it is virtually impossible to have a decent income from your retirement savings.

You’re also not the only person dialing back on risk. But there is a difference between dialing back and leaving the field of battle. There are several things you can do that would give you a toehold in the equity markets while increasing your investment income and reducing your risk exposure.

One is to reduce, but not eliminate, your equity commitment. A very conservative portfolio would be about 40 percent equities. The remaining 60 percent could be spread, as you suggest, across a variety of fixed income investments in the hope of increasing yield, while diversifying risk.

Another thing you could do is devote a portion of the fixed income part of the portfolio to stocks that have yields like bonds, such as those suggested in a recent column on “The Ultimate Income Portfolio.” Remember, there are electric utilities, REITs, telephone, and tobacco stocks yielding 5 to 6 percent.


Q. I'd like to get a retirement portfolio review and help with financial planning from an independent, fee-based financial advisor. I've asked around among friends but no one has had any recommendations (their advisors all have products to sell). Are independent advisors rare? How do I find a good one? —R. P., by email

A. Yes, independent advisors are rare. Worse, they are greatly outnumbered by those with products to sell. Many have only a few products, and they are all “just right” for you. While a registered investment advisor is sworn to act as a fiduciary, putting your interests first, even they have a conflict in that they will be seeking to manage your investments for a fee. That fee may interfere with recommending that you pay off a home mortgage from your investments. If they suggest that their management fee will decline.

So I suggest looking for a fee-only planner. They may want to manage your money as an RIA, but you can limit the relationship to a consulting fee. You can search for a fee-only planner by visiting the National Association of Personal Financial Planners (NAPFA) website, http://napfa.org/. Once there, enter your zip code in their "Find an Advisor" tool, and you get a list of advisors in your area.