I need some advice.
I'm a recent retiree.
Good health with a family history of good health.
No desire to die rich
I'd rather have more money now while I'm young and healthy and can enjoy the money without having to use a cane or a wheelchair.
I'm not particularly fond of volatility after 2000-2002 and 2007-2009.
Emergency funds: yes
Tax filing status:single
Tax rate: 25% fed,4.33% state
Asset Allocation now:31% almost all G Fund/66.5% stocks/2.5% REITS<--REITS are stocks, so let's call it 69 stocks/31bonds.
Desired international: more than I have now.
NON RETIREMENT ASSETS
78% cash for home purchase
22% individual stocks,physical gold and silver, Van. Energy Fund
95% G Fund, 5% F Fund
IRA's 141K<--Did I miss something? How do you get 69% stocks when you have 320k in G and F funds and 141k + 77 in hard assets + 18k inherited TIRA in stocks?
52% TIRA ,48% RIRA
Invested as follows:
Bridgeway Sm. Cap Value [BRSVX] 2.5%
Mutual Quest Z [MQIFX] 16%
Long Leaf Partners [LLPFX] 21%
Third Ave. Value Inst.TAVFX] 12%
Tweedy Browne Value[TWEBX] 8.5%
VAN. REIT[VGSLX] 7%
Pimco Comm. R.R. Cl. D[PCRDX] 7%
Wisdom Tree Int. Sm. Cap Div.[DLS] 1%
Hussman Strategic Growth[HSGFX] 10%
I want to convert substantially all of the TIRA to RIRA by the time I'm 70.
INHERITED TIRA 18K
Dodge&Cox Int. 5%
Hennessey Corn. Growth 6%
Bogleheads won't agree with your fund choices, but we'll leave that alone for now.
This is one of the strategies I've come up with.
I've read of the FERS likened to a three legged stool; the Basic annuity, S.S., and the TSP.
I would take S.S. now.
My Basic Annuity and S.S. should cover all or almost all of my non-discretionary expenses.
I would leave the TSP largely in the G Fund and RMD it over a 240 month period.
I would leave the IRA's alone.<--RMD won't start until your 70.5, so are you saying you will start withdrawing now or wait 8 years?
In twenty years when the TSP is gone I would either RMD or annuitize the IRA's.
Option: I could extend the depletion period of the TSP to 288 or 336 months.
ADVANTAGES [as I see them]
I don't think I'll run out of money.
The withdrawals from the TSP should increase year after year.
Doing a 240 month versus 288 or 336 month TSP drawdown gives me more money at the beginning of retirement.
I control my money versus annuitization; S.S. and the B.A. are already controlled by a second party.
I have three sources of COLA'd income ; S.S.,the B.A., the TSP withdrawals.
It occured to me this is like a two bucket `bucket strategy' . The first bucket contains the more safely invested assets, the last one the riskier or more volatle ones.
I'm not maximizing my income; an SPIA would pay me more ,at least from the start.
With a 240 month TSP drawdown I deplete it before my actuarily expected demise.<--Not a problem because the rest of your portfolio has 20 years to grow. Another possible option is to not take SS until at least 66. That can be counted as increasing your SS annuity income for the rest of your life.
What do people think of this idea?<--You are considering such a low withdrawal rate (2.8%) that you won't have much of a problem. I don't think I'd want 69% in stocks though, because a 50% loss would definitely alter your plan.
What other drawbacks are there?
Any suggestions? Advice?
Am I being too cautious by investing TSP mainly in G Fund?<--If your overall AA is 69% stock you are not being to cautious.
Also, I'm assuming interest rates at least won't go any lower. With any interest rise G Fund should start paying more.
Am I being too cautious by depleting TSP?<--If you deplete bond funds your equity allocation will rise and increase risk if you don't rebalance.
Partial annuitization now[SPIA]= More money now.<--Too young, rates too low.
Partial annuitization when I'm about 70 or 72=I think more money a little later.
Apply a 4%ish WR to combined TSP + IRA balance now= More money now and,potentially,more later?<--You are proposing a 2.8% withdrawal rate and you could increase that, but at 62 I would keep the withdrawal rate at about 3.5% max.
Thanks in advance.I don't have computer so I don't check the forum everyday so if I don't answer promptly please bear with me.I also might be out of town on vacation after next week