Q My wife and I are in our mid-50s and planning for retirement at 66, our full Social Security retirement age. I see recommendations on the percentage of my portfolio that should be in fixed income (for example 55 percent if I'm 55 years old). However, I've been fortunate to have accumulated a couple of pensions during my career, and it looks as if we'll have about $55,000 a year coming in between Social Security and our pensions. How should I account for the pension (and Social Security) income? It seems to me that this should be considered a fixed-income investment, evaluated at its net present value, alongside my equity portfolio.

DAVE, BLOOMINGTON

A You're making a very important point. I like the rule of thumb that suggests the fixed-income portion of your overall portfolio should equal your age. The late financier Fisher Black once wrote that through conversation, reading and experience, people evolve relatively sophisticated rules of thumb. "Because there is so much noise in the world, people adopt rules of thumb. They share their rules of thumb with each other," he wrote. "Over time, I expect that transmission through the media and through the schools of scientific ways of interpreting evidence will gradually make the rules of thumb more sophisticated."

Of course, a rule of thumb is just a starting point. One size or one formula doesn't fit all circumstances in investing or life. Your Social Security inflation-adjusted lifetime annuity is essentially a risk-free bond equivalent. I'm assuming the pensions you've accumulated are traditional defined benefit plans that pay out a steady income based on years of service and earnings formula. If I'm right, it's also a bond-like security. You own a significant bond portfolio.

In theory, this means you could put more of your savings into equities and still own a relatively conservative portfolio. However, it's a separate question whether you should invest more in equities. It all depends on the answers to a number of other important questions, such as what do you plan on doing in retirement, how much a bear market in stocks would affect your lifestyle in your golden years and how comfortable are you with the risk that stocks might languish for years.

The good news is that you can come up with realistic answers considering the terrible stock market of recent years.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.