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Yes, I have also been struggling with this. Retirement in the next few years is likely, and I have planned a 'bottleneck' glide path. I am about 40/60 stock/fixed now and am moving towards 30/70 at retirement. Half of the fixed is in cash/SV/CD/I-bonds. I plan to spend from the cash portion first, d...

No, I put everything in at the beginning of the year, including front-loading my 401(k) contributions. However, maintaining my AA requires buy almost all bonds and stable value. I am still a little stock heavy, even after all of that.

I use my contributions to maintain my AA, rather than contribute in AA proportions. Rarely have to rebalance. Do folks thing this is a mistake?

The 2008 downturn really helped me out. I got a very late start. Started investing in 2005 and will retire sometime before this decade is out. So I have been socking away literally every penny. I had a conservative allocation, but nonetheless, it had me directing pretty my all new contributions into...

The vast majority of home buyers will pay what the bank tells them they can afford. Therefore, prices paid for housing are directly affected by incomes and interest rates. As I showed above, a 1% increase in rates results in 12% less to spend on a home.

Allstate auto (2 drivers, 2 cars) $999. USLI umbrella ($1m) $183. Travlers renters policy $183.

A little off topic, but: If interest rates start to rise slowly and steadily, wouldn't it be good to have bonds in taxable so you could tax loss harvest the capital losses?

Another way to think about this is to use a mortgage calculator. If I can afford a monthly payment of ~$422, I can borrow $100,000 at 3% or $88,300 at 4%. So that's about a 12% drop in the house price I could afford from a 1% rise in interest rates.

I find that Commerce auto insurance rates are more than twice of some others (Allstate, Geico). We have our umbrella through USLI, from a MA broker.

When stock prices are inflated, take a lower withdrawal percentage. When stock prices are depressed, take a higher withdrawal percentage. Hmmm... Isn't that about the same as taking a constant percentage under all market conditions?

Here in the northeast, $100 dinners (or close) are pretty much standard for dinner and drinks. We treat ourselves about once a month.

Our expenses are currently 1/3 of our income. Why would the suddenly jump to 90% at retirement?

Our anticipated SS payment, if we wait to 70, would cover our current expenses.

Dollar is really bad. After renting from them in Florida a few years back, several charges of ~ $100 at a time started appearing on my credit card account months later. I protested with the credit card company and they reversed the charges. Six months later, the calls from a collection agency starte...

I am near retirement and am 40/60 stocks/bonds. I currently rent and am planning on buying a small home after retirement. Should I change my asset allocation after I buy the house?

With the figures you have given, it looks like you would be better off financially to buy a home. Check out the New York Times buy/rent calculator for a detailed analysis of you situation.

It is interesting how similar the returns of Wellington and Wellsley have been since Wellsley's start in 1970, especially since there allocations are so different (65/35; 35/65). Have a look at a morningstar growth chart, I am not sure how to post it.

I also use a fairly detailed spread sheet approach where I track 2 things: 1) Actual expenses, for which I have a 14 year record. 2) Projected income in retirement. The income side takes into account the spending down of the portfolio between retirement and age 70, when SS kicks in. A small pension ...

I am also in the same situation with a 1099-MISC $2,000 in box 7 (non-employee compensation). This is from a one-time payment this year that I do not expect to be repeated. What is the distinction between self-employment and income from a 'sporadic activity'?

Thanks

I am not sure how to assess the value of these inflation protected funds. Is it fair to compare the yields to nominal bond funds or CD's? Vanguard's short term treasury fund is yielding 0.14%. FDIC insured savings accounts ~ 1%. Vanguards short-term inflation protected fund negative 2.29%. For the i...

The new short term TIPS fund yeilds negative 2.29% real. 2012 inflation was 1.7%, so at the current rate of inflation these bonds are a money losing proposition in both real and nominal terms Short term treasury fund (VFISX) is yielding 0.14% nominal or negative 1.56 inflation-adjusted. So the curre...

I don't know about the 0.25% purchase fee. That is paid into the fund. If I establish a position in the fund, then I am collecting that extra 0.25% from other buyers until it is discontinued.

All else being equal, most people would prefer to own their home. This is why it is generally more expensive. People are willing to pay more to own.

I believe at this income level a SIMPLE IRA might have an advantage. Limit is ~14k and she can put all of her income in up to that limit, I think.

Of course a fall in interest rates increases the NAV, and is not likely to result in a disorderly exit. However, falling NAVs are another story. I do not worry about the normal functioning of the bond market, even if rates rise and NAVs fall. A 'disorderly' market, one that is not functioning normal...

The one point that they made that worried me is that bond ETF's have fundamentally changed the way corporate bonds are traded. ETF's are highly liquid and readily traded, but the underlying securities are not so much. Could this lead to a crisis if there are large and rapid redemptions... I don't kn...

Social Security is an annuity. Delaying costs you money, in the sense that you have to spend from your nest egg the income you are not receiving. The money spent during the delay is your investment. The increase in your annuity payment is the return. Run the numbers. It is exceptionally difficult to...

You can chose to try and optimize for total benefits or annual income. Those that chose to delay are optimizing their annual payment. A larger revenue stream that will kick in at 70 can allow you to spend more of your nest egg between retirement and age 70.

This is in fact exactly the way I think of it. I am nearing retirement and have enough, right now, for a very modest lifestyle. At my current (high) savings rate, I will have enough for a comfortable lifestyle in a few years. The last thing I want to do at the moment is risk what I already have or w...

Right you are. I do have small cap value at market weight. I don't have a tilt to small cap value.

I am tilted toward large cap value (Wellington) and small cap blend (Extended Market). I have both a small and a value tilt, but do not own any small cap value.

There has been a lot of angst here about the prospects for bonds. It may well be that bond returns are a drag on a balanced portfolio going forward (or not). Bonds are for safety, not return. Even if bonds lose money for some time period going forward, they are still not subject to the volatility of...

We are actually considering the Hudson Valley as an eventual retirement possibility. Looking at properties there I had a very difficult time estimating what the taxes would be, other than relatively high. Seems like a very complicated property tax system, where it is impossible to just use an x% of ...

Thanks sscritic. My understanding is that the survivors benefit maxes out at the beneficiarys FRA, while their own benefit could continue to grow until 70.

Just wanted to test my understanding on this. If something happens to me, my spouse can collect my primary insurance amount when she turns 66,or a reduced benefit starting as early as 60. She could collect this survivors benefits until she turned 70 and then switch to her own maximum benefit. If our...

I keep a running balance in a spreadsheet for each my accounts and check them daily against my account balances online. I also enter future transactions that are planned or estimated to see where I will be a few months in advance. This all takes 10-15 minutes on a daily basis.

bsteiner:
I appreciate your taking the time to compose a lengthy and informative reply. I can see you have some experience and expertise in this area.

Many thanks,
billyt

It would be a plus if the Common Trusts had low expenses, but if the expenses were low (and performance high) I think they would post them somewhere. Maybe I am paranoid, but it is difficult for me to assume that undisclosed fees are low rather than high, especially considering that their mutual fun...

wesleymouch: Yes, this is what I am afraid of, that they are managing the account in such a way to extract the maximum fee income for themselves. Still, maybe I should be grateful that the account value pretty has pretty much recovered since 2008-2009.

Yes, WF is the trustee. And I don't think I have any legal standing at this time, as far as I know. What about fiduciary responsibility? Still, they are sending me statements with an invitation to consult with the 'relationship manager'. I don't think I will hurt to let them know someone is actually...

Rented from Dollar for this exact trip a couple of years ago. Horrible experience. A month after the rental, mysterious charges began appearing on my credit card ~$100 at a time. I disputed them through the credit card company. Turns out they were from Dollar, who would not provide any explanation f...

I have some concerns about a trust fund at Wells Fargo and wanted to see what you all thought. The trust was established decades ago by my grandparents to provide income for my mother. On my mothers passing, the remainder will be split among me and my siblings. About, 5 years ago or so, I started re...

Wellington provides half the stocks in my portfolio. The rest of the stocks are split: 30% SP500, 25% Extended Market, 35% Total International, 10% REIT. I add enough fixed income to bring me to my desired stock/bond allocation (45/55). I have been very happy with the performance of Wellington in my...

Bonds and bond funds will always be safer than stocks and stock funds and less safe than CD's. Price of bond goes down, the dollar amount of yield is the same, the percent yield is higher (just the math).

I've got 14% of my portfolio (25% of fixed) in 5-year CD's earning 3%. Bought them a few years ago. Another 8% (15% of fixed) in iBonds. So far, return wise, I would have done better by leaving this allocation in bond funds. But I sleep easier.

billyt

Unfortunately, there is no longer any news in newspapers. I used to get the Wall Street Journal. I stopped when I realized I had already read all of the 'news' online. The day before. I local newspaper can be useful for the stuff happening close to home, as well as the classifieds.

billyt

My plan is to withdraw a constant percentage each year, without any inflation adjustment. It is nice to know you will never get to a zero balance. Start at 4% and see how it goes. If the portfolio grows it can go towards inflation or more fun, if the portfolio shrinks, the constant percentage dictat...

I expect to earn about 50% of my gross income in retirement.

I expect my retirement expenses will be approximately the same as my current expenses, maybe slightly less. I currently spend 30% of my gross income.

That sounds right Doc. So I guess one should 'harvest' any gains annually for as long as the 0% capital gains rate holds?