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Just found out that I'm old enough to get a distribution from the ESOP of my former employer*, which I'll roll into my IRA. The amount is about five percent of my holdings, which are all at Vanguard as follows:
VTI (Total Stock Market) 29%
VEU (FTSE non-US) 7%
VSS (FTSE non-US Small Cap) 3%
VCADX (CA Muni Bond Fnd) 20%
VBILX (Int Term Bnd Fnd) 20%
VWIUX (Tax-Exempt Bnd) 6%
IRA: VCIT (Corp Bond Fund) 15%
Everything in taxable except VSS has enough unrealized capital gains to discourage me from playing with the allocation. Along with Social Security and some rental income, this mix generates just barely enough cash flow in my second year of retirement. Everything but the IRA interest is paid out to me.
So I feel like I have two avenues: (1) take a flyer on an equity investment that might grow; and (2) stay the course, and dump the new money into VCIT or some other safe but boring fund.
I know I don't have much stomach for volatility, even though I can afford the risk. I'd appreciate the thoughts of others.
*Other Bogleheads who might happen to be former Parsons Corporation employees may be interested to learn the rules seem to have changed to allow fully-vested 62-year-old former employees to cash out of the ESOP.
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I am about your age and station in life. I look at what you have and think, this guy needs more international/emerging. So that is where I would put the money up to the point where your 30-40% international. My reasoning is diversity, and because international stocks have been kept down by events in Europe which appear to be coming to and end, also because of the former factor, the dividend yield on international are up to the point where they are better than you will get on bonds. Yes you pick up more volatility, but with interest rates at historic lows with the most likely direction up at some unknown point in the future, bonds might be volatile too. Dave
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