Retirement Planning

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Retirement Planning

Postby lauberge49 » Wed Jul 10, 2013 11:38 am

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Last edited by lauberge49 on Wed Jul 24, 2013 11:03 pm, edited 1 time in total.
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Re: Retirement Planning

Postby dbr » Wed Jul 10, 2013 12:38 pm

For planning a retirement the starting point is to determine how much you need/want to spend. Spending, of course, includes taxes and money you have to spend to maintain property. You don't say anything about that in your post.

The next step is to compare that number, or range of numbers, to sources of income. You have SS and income from farmland. Withdrawing money from an IRA is not income because it is just transferring money from one account (tax deferred) to another (taxable). If your income exceeds your desire to spend, then you will not have to withdraw from your assets and can do pretty much what you want with them.

If you are going to need to withdraw from stocks and bonds, any allocation in the range 30/70 - 100/0 in stocks/bonds does pretty much the same thing under withdrawal so long as withdrawals stay less than 4% or somewhat less. What does matter in investments is keeping costs low and not losing too much to taxes. If you have to take more than 4% by much from stock and bond assets, then there could be a problem.

I don't have a good idea how to estimate the use of the land as an asset. As long as you can obtain income, you can add that in to your income sources, but the estimate is variable, and will decline as you sell acres. It is going to be a tricky problem to account for how long and how much you can extract income from that asset, and I don't know much about now to estimate the prospect. ANYONE?

There are planning tools for laying these things out such as FireCalc, I-ORP, Fidelity Planner, etc. Those tools do not include planning for farmland owners.
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Re: Retirement Planning

Postby lauberge49 » Wed Jul 10, 2013 8:45 pm

I think we can sustain given current income and withdrawals, I am more interested in my choice of VG funds and my diversification, which is heavily USA right now. Does anyone have a recommendation on which funds would be better in each acct, taxable and non-taxable?
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Re: Retirement Planning

Postby lauberge49 » Wed Jul 10, 2013 8:46 pm

Should we have a banner farm year, then we simply add to the taxable acct, or should we suspend withdrawals and spend down the taxable acct at the same rate when funds are available there?
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Re: Retirement Planning

Postby Iorek » Wed Jul 10, 2013 8:59 pm

What sticks out to me is it looks like about 10% of your investments are a single company. Especially since it's being held inside an IRA, I would sell the AAPL and put it in a broader (or index) fund, consistent with whatever asset allocation you choose.
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Re: Retirement Planning

Postby lauberge49 » Wed Jul 10, 2013 9:11 pm

Re AAPL: I appreciate that comment, and that will happen eventually. Please keep in mind that I have switched from buying undervalued individual stocks to this VG plan. I had a full recovery from the 2008 debacle because I never got out. Now, I want to be more diversified using indexing with a few funds rather than monitoring individual stocks. My goal is to make 5% + per year allowing for ups and downs. that will cover withdrawals.
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Re: Retirement Planning

Postby lauberge49 » Wed Jul 10, 2013 9:14 pm

Most of the three fund strategies use VTSAX, total stock mkt admiral, and
VBTLX, total bond admiral. I do not own those, and am wondering if they should be part of my strategy.
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Re: Retirement Planning

Postby Peter Foley » Wed Jul 10, 2013 9:19 pm

A couple thoughts - it does not appear to me that you are using a particularly tax efficient withdrawal strategy.
You have $20,000 in Social Security income, $20,000 to $40,000 or more in farm income, and are withdrawing $24,000 per year. With this combination you are maximizing the taxation of your Social Security benefits. Read up on the taxation of SS benefits on the Wiki. It is likely that in a low farm income year you could make withdrawals from your taxable accounts instead of your IRA and be in a very low tax bracket.

As to your investments - none of the choices you have made are bad choices, they just are an odd mix that creates a more complex portfolio than you need to have. The three fund approach you mentioned would be fine. Apple is a bit of an outlier and I would defintely not hold it in a retirement account if I wanted to own some shares.

A relatively easy modification to make would be to sell the Apple shares and invest in Total Stock Market in your IRAs. In your taxable account you could hold only VG Life Strategy Cons Growth because it is already a mix of stocks and bonds (not unlike Wellington and Wellesley). I'm suggesting this approach in case you are not interested in a total makeover of your portfolio.
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Re: Retirement Planning

Postby dbr » Wed Jul 10, 2013 9:25 pm

If you are just interested in how to select funds than a very simple choice would be to first select some reasonably conservative asset allocation such as 40% stocks and 60% bonds as follows:

25% Total Stock Market (US)
15% Total International Stock Market
40% Intermediate Bond Index Fund
20% TIPS Fund

You can hold all the bonds in the IRA.

Another choice might be to invest your IRA 100% in the Target Retirement Income Fund and split the taxable account between TSM and TISM.

It is possible to discuss variations on these ideas to the extent of hundreds of posts. Note that philosophically these suggestions are pretty much the three fund portfolio: viewtopic.php?f=10&t=88005 except that TIPS make enough sense in principle that I think they should be included at some level. You could create a hundred posts on that alone.

I suggest that a really good idea is to read enough in some investing books that you would either agree with the above suggestions or be able to decide for yourself how you might differ from them.
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Re: Retirement Planning

Postby lauberge49 » Thu Jul 11, 2013 12:24 am

Peter, I am interested in your ideas on a total portfolio makeover, bring it on, please......
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Re: Retirement Planning

Postby ruralavalon » Thu Jul 11, 2013 7:22 am

lauberge49 wrote:Peter, I am interested in your ideas on a total portfolio makeover, bring it on, please......


I'm not Peter, but here goes. I'm up a little earlier than usual today, with time on my hands.

First decide on an asset allocation you can be comfortable with. For the stock bond mix please consider -- Wiki article link: Asset Allocation ; and 2011 Regression, % Stocks vs Age . For the domestic/international mix, please consider -- Wiki article link: Domestic/International ; and 2013 poll results, median = 30% of stocks .

Also please consider Tabel 3 from the Trinity Study about asset allocation and portfolio withdrawals in retirement. As dbr has already mentioned, there is a broad range of asset allocations that should be very safe. For some context on that study, you might look at Trinity Study, Retirement Withdrawal Rates and the Chance for Success, Updated Through 2009 .

In my example I will use 50/50 stocks/bonds just for purposes of illustration, with 30% of stocks in international. All percentages and dollar amounts are rounded off, so may not add up exactly. To the extent that you want to continue to hold APPL, do that in the IRA and reduce the VTSAX accordingly. I suggest most of the VTIAX be placed in the taxable account (using all the space in that account) because its very tax-efficient (Wiki article link: Principles of Tax-Efficient Fund Placement ), and because placing it there allows you to use the foreign tax credit ( Wiki article link: Foreign tax credit ).

Taxable (11%; $60k)
11%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX), er 0 0.16%

IRA (88%, $484k)
50%, Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX), er = 0.10%
35%, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
03%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX), er 0 0.16%

Wifes IRA (01%; $5k)
01%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX), er 0 0.16%

Before changing investments in taxable take a look at the gain/loss status of each investment in that account, to make sure that changing over does not create an unnacceptable tax liability. Here is some information on Federal Tax Brackets . If the current gains are small, or can be offset by losses in some positions, there is no issue. If there is an issue, you could could make the changes in two taxable years to mitigate any harm. If you want to post details on the gain/loss status of those taxable invetsments and your tax rate, I'm sure that others could give you more guidance on this than I can.

As already mentioned by dbr and Peter Foley, your tax liability ongoing could be reduced by limiting your annual withdrawals from the IRA, and by substuituting some withdrawals from the taxable account and in a "banner year" just sustituting the farm income rather than withdraw. And don't set up automatic reinvestment of dividends and gains in the taxable account, you want to avoid creating short term gains that might be taxable at a higher rate.

I hope that this helps.
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Re: Retirement Planning

Postby lauberge49 » Thu Jul 11, 2013 8:08 am

I am definitely learning more with every post, and will be doing lots of reading! With regard to withdrawals, be they from taxable or non-taxable, does it make more sense to keep a few months of withdrawals in the MM fund, or do exchanges from your investments every month? I have tended to keep too much cash in there, I think, so as not to mess with the exchanges.
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Re: Retirement Planning

Postby dbr » Thu Jul 11, 2013 8:21 am

lauberge49 wrote:I am definitely learning more with every post, and will be doing lots of reading! With regard to withdrawals, be they from taxable or non-taxable, does it make more sense to keep a few months of withdrawals in the MM fund, or do exchanges from your investments every month? I have tended to keep too much cash in there, I think, so as not to mess with the exchanges.


I have found that simply as a matter of convenience in moving money around, from absorbing income and distributions, to paying for things, etc., etc., that one inevitably ends up with a couple or three percent of the value of the portfolio in cash such as money markets, checking account, etc., a slush fund, as it were. 2%-3% is about the size of the yield paid on investments annually and about the size of a half year's spending, etc., for what it is worth, but it is NOT because there is anything special about "keeping" a ratio of one's spending in cash,.
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Re: Retirement Planning

Postby ruralavalon » Thu Jul 11, 2013 9:25 am

lauberge49 wrote:I am definitely learning more with every post, and will be doing lots of reading! With regard to withdrawals, be they from taxable or non-taxable, does it make more sense to keep a few months of withdrawals in the MM fund, or do exchanges from your investments every month? I have tended to keep too much cash in there, I think, so as not to mess with the exchanges.

Your $25k in the two checking accounts is enough to back-stop many months worth of withdrawals, you can do exchanges between two or more mutual funds in the same account without using a MM fund in the process, and if you have just VTIAX in the taxable account there are no exchanges to be made there. Nevertheless, there is no harm in keeping a small additional cash reserve in a money market fund in the taxable account, but count that as part of your bond allocation for asset allocation purposes.
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Re: Retirement Planning

Postby Peter Foley » Thu Jul 11, 2013 10:49 am

My makeover recommendation would be very similar to ruralavalons. I'm a believer in some inflation protection on the bond side so would split my bonds into Total Bond and TIPs.
Ruralavalon's recommendation:
Taxable (11%; $60k)
11%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX), er 0 0.16% Note - You could hold a few I-bonds here. Entirely optional.
IRA (88%, $484k)
50%, Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX), er = 0.10% Note: I would do 20% TIPs here.
35%, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
03%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX), er 0 0.16%

Wifes IRA (01%; $5k)
01%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX), er 0 0.16%
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Re: Retirement Planning

Postby lauberge49 » Thu Jul 11, 2013 11:43 pm

If we do not reinvest dividends in the taxable acct, simply have them deposited into checking?
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Re: Retirement Planning

Postby lauberge49 » Thu Jul 11, 2013 11:53 pm

The basic premise, from what I gather, is to minimize IRA withdrawals by using more taxable acct and checking acct funds, and wd from the IRA on an as-needed basis? Yes, I will repeat the obvious and ask all of the dumb questions, because I want to get this as right as possible, then run with it.
I will post my plan for comment prior to executing it, which will happen within a week.
I am definitely switching to fewer funds, and will take the tax-efficiency suggestions to heart.
I appreciate all of the advice!
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Re: Retirement Planning

Postby ruralavalon » Fri Jul 12, 2013 6:57 am

lauberge49 wrote:If we do not reinvest dividends in the taxable acct, simply have them deposited into checking?
. . . .
The basic premise, from what I gather, is to minimize IRA withdrawals by using more taxable acct and checking acct funds, and wd from the IRA on an as-needed basis? Yes

Yes that's correct.

In general when you withdraw from taxable only the capital gains, not the entire amount, are suject to tax (sometimes not taxed at all if a long term gain and your tax bracket for ordinary income is low enough, Capital Gains Tax Rates), but when you withdraw from the IRAs (unless its a Roth IRA) the entire withdrawal is taxed as ordinary income at a higher tax rate. And adding more taxable income can increase the amount of your Social Security that is suject to tax.
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Re: Retirement Planning

Postby lauberge49 » Fri Jul 12, 2013 8:46 am

So, we get this plan set up, and all is invested except for our checking accts. Let's assume that I want to withdraw 1,000/mo from the taxable. Each time I need to do a withdrawal, stock fund has to be sold, which will trigger short term capital gains, no?
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Re: Retirement Planning

Postby furwut » Fri Jul 12, 2013 8:59 am

lauberge49 wrote:Each time I need to do a withdrawal, stock fund has to be sold, which will trigger short term capital gains, no?


Not necessarily. You can sell specific lots and so avoid selling shares owned for less than one year. This used to require tracking on your part but the good news now is that the Mutual fund company has to do it [EDIT: For shares acquired on or after 1/1/2012] . You will be able to pick the shares that give you the lowest capital gain if so desired.
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Re: Retirement Planning

Postby lauberge49 » Fri Jul 12, 2013 9:12 am

A safer bet, because what you just posted is above my pay grade, would be to keep 12K in the MM, and wd 1K a month, then at the end of a year when you know you have owned it for long enough, convert another 12K? What am I missing here?
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Re: Retirement Planning

Postby furwut » Fri Jul 12, 2013 9:24 am

Since you are in the distribution phase you could simply have any dividends and capital gains distributions sent directly to a MM fund or your checking account for eventual spending. You'll have to pay taxes on these anyway.

Then after 1 year, since you have not been buying any new shares, all shares sold will meet the 1 year requirement. But a little management of what specific shares are sold can help to keep the tax bill lower.
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Re: Retirement Planning

Postby lauberge49 » Fri Jul 12, 2013 10:03 am

I tried to have the dividends and capital gains in my taxable acct xfer red to the applicable mm fund, but I got a pop-up message that I could not xfer them to a zero balance mm fund. I am in the process of working on that with Vanguard.
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Re: Retirement Planning

Postby ruralavalon » Fri Jul 12, 2013 11:48 am

lauberge49 wrote:I tried to have the dividends and capital gains in my taxable acct xfer red to the applicable mm fund, but I got a pop-up message that I could not xfer them to a zero balance mm fund. I am in the process of working on that with Vanguard.

Its probably because you need a $3k minimum initial balance to start up the MM fund. Vanguard Prime Money Market Fund (VMMXX) . I don't think you have to keep that balance, just start with it. And you can probably have the distributions sent directly to your checking.
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Re: Retirement Planning

Postby ruralavalon » Fri Jul 12, 2013 12:08 pm

lauberge49 wrote:A safer bet, because what you just posted is above my pay grade, would be to keep 12K in the MM, and wd 1K a month, then at the end of a year when you know you have owned it for long enough, convert another 12K? What am I missing here?

I don't think you are missing anything. If you don't reinvest the dividends, interest or gains, then you will not be creating any new short term gains, and after 1 year the gains on everything you could withdraw will be in long term gain territory.
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Re: Retirement Planning

Postby lauberge49 » Tue Jul 16, 2013 10:31 am

Given the situation with bonds, is it better to go with short term bonds, or stick with the fund that encompasses the entire bond market?
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Re: Retirement Planning

Postby ruralavalon » Tue Jul 16, 2013 4:28 pm

lauberge49 wrote:Given the situation with bonds, is it better to go with short term bonds, or stick with the fund that encompasses the entire bond market?

Who knows? For several years everyone has been predicting that bond prices are going to go down soon, and that bond interest rates are going to go up soon. That will happen sometime, but I don't know when. We have internediate term bonds and bond funds, and intend to stay there.
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Re: Retirement Planning

Postby mhalley » Tue Jul 16, 2013 8:00 pm

If you search the site you will find many conversations discussing the advantages of owning a combination of wellington and wellesly. They both are low cost, have a good track record and are in your tax deferred accounts so you don't have to worry about taxes when you rebalance. You will have less diversification than if you went with some of the portfolios suggested than if you stick with your current allocation. Go read some of the discussions about the combo, think about why you bought the funds in the first place, what you want your total stock and total bond allocation to be, then come to a decision if you want to stick with them. Perhaps you might add some diversification by adding some international and REIT to your mix.
As has been said on this board in the past, "the enemy of a good plan is the search for the perfect plan" You could certainly do a lot worse than what you have now.
Everyone will dis your aapl stock, I have some myself that I wish I had sold at 700. You might consider cutting back to it being only 5% of your portfolio.
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Re: Retirement Planning

Postby lauberge49 » Wed Jul 17, 2013 6:17 am

Am considering REIT, international, possibly munis for taxable acct, comments?
Will suspend IRA withdrawals so to lower tax bracket.
Still mulling over IRA choices
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Re: Retirement Planning

Postby ruralavalon » Wed Jul 17, 2013 1:52 pm

lauberge49 wrote:Am considering REIT, international, possibly munis for taxable acct, comments?
Will suspend IRA withdrawals so to lower tax bracket.
Still mulling over IRA choices

For a taxable account:

1. REITs, a big no. Under US tax laws REITs are required essentially to payout to shareholders 90% of their GAAP (Generally Accepted Accounting Principle) taxable income, so they generate a lot of income to shareholders taxed at the high ordinary income rates. They are very tax-INefficient, and should only be owned in a tax protected account in my opinion. Wiki article link: Principles of Tax-Efficient Fund Placement . Also you already have a large portion your assets (453 acres of farm land) in real estate. Is there a reason you want to invest more in real estate? Is this to replace some of the farm acreage when sold later?

2. International, yes. Make it large cap or total market stock index fund. A large cap or total market international stock index fund should be very tax-efficient, and also lets you get the benefit of the foreign tax credit. Wiki article link: Principles of Tax-Efficient Fund Placement .

3. Munis, really depends on your tax bracket and other tax considerations. You have to be in a higher tax bracket to get the benefit from the zero tax, because you have to pay more for the muni bond as compared to a similar taxable bond. Please see: Mornigstar bond calculator, tax-equivalent yield .

Don't make final choices for taxable until you have decided on choices for the IRA. The accounts should work together for the best plan.
.
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Re: Retirement Planning

Postby lauberge49 » Wed Jul 17, 2013 3:29 pm

If I am not comfortable with International in the taxable, what would you suggest. I might go 5% Intl, then what?
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Re: Retirement Planning

Postby lauberge49 » Wed Jul 17, 2013 3:36 pm

What about the tax managed funds? VTMSX- TM SMALLCAP
VTGLX-TM GROWTH AND INCOME
VTCLX-TAX MANAGED CAPITAL APPRECIATION
VTMFX-TM BALANCED
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Re: Retirement Planning

Postby Billyboy » Wed Jul 17, 2013 3:55 pm

dbr wrote:Retirement Planning
by dbr » Wed Jul 10, 2013 7:25 pm
If you are just interested in how to select funds than a very simple choice would be to first select some reasonably conservative asset allocation such as 40% stocks and 60% bonds as follows:25% Total Stock Market (US)15% Total International Stock Market40% Intermediate Bond Index Fund20% TIPS Fund


dbr
I take it when you refer to Intermediate Bond Index Fund, you are referring to the likes of VBILX, Intermediate-Term Bond Index, Admiral Shares. May I ask why you wouldn't use VBTLX, Total Bond Market Index, Admiral Shares? In comparing the two,
I do notice VBILX has out performed VBTLX in all time periods. Is that your reason?
Thanks,
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Re: Retirement Planning

Postby ruralavalon » Wed Jul 17, 2013 4:30 pm

lauberge49 wrote:If I am not comfortable with International in the taxable, what would you suggest. I might go 5% Intl, then what?

Is there a reason you are uncomfortable with International in the taxable account? Or is it just that you are uncomfortable with international in any account? Why?

If you don't want int'l in the taxable account, you could then instead put put some more International in one of the IRAs.

A different good choice for taxable could be:
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX), er = 0.05%

lauberge49 wrote:What about the tax managed funds? VTMSX- TM SMALLCAP
VTGLX-TM GROWTH AND INCOME
VTCLX-TAX MANAGED CAPITAL APPRECIATION
VTMFX-TM BALANCED

Not sure which are the most tax-efficient, you have exhausted my knowledge of tax-efficiency. I suspect some or all may not be as tax-efficient as VTSAX or VTIAX, but I don't know. Some of this may depend on your marginal tax rate, which you have not mentioned so far.

89% of the total portfolio is in the IRAs, so there is just no need to be very complicated in the taxable account.


In my opinion, you are putting the cart way before the horse here. I posted this earlier --
First decide [emphasis added] on an asset allocation you can be comfortable with. For the stock bond mix please consider -- Wiki article link: Asset Allocation ; and 2011 Regression, % Stocks vs Age . For the domestic/international mix, please consider -- Wiki article link: Domestic/International ; and 2013 poll results, median = 30% of stocks .

Also please consider Tabel 3 from the Trinity Study about asset allocation and portfolio withdrawals in retirement. As dbr has already mentioned, there is a broad range of asset allocations that should be very safe. For some context on that study, you might look at Trinity Study, Retirement Withdrawal Rates and the Chance for Success, Updated Through 2009 .

What overall asset allocation do you think you might want, that is:
1. What stock % and what bond %; and
2. What % of total stocks in domestic, and what % of total stocks in international stocks?; and
3. Do you want your domestic stock investment to include some REIT beyond what is already in the Total Stock Market fund VTSAX? ; and
4. Do you want your domestic stock investment to include some extra small cap beyond what is included in VTSAX?


Its important to make those asset allocation decisions first, before trying to pick the particular funds to use and even before deciding which accounts to place the assets or funds in.

For example, if you wanted that extra small cap in your domestic stocks, then it would be best to just put it in one of the IRAs, since you have plenty of room there and because Vanguard Small-Cap Index Fund Admiral Shares (VSMAX), er = 0.10%, has a lower expense ratio than Vanguard Tax-Managed Small-Cap Fund Admiral Shares (VTMSX), er = 0.14%. And you would rather have Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX), er = 0.05%, in taxable than have Vanguard Tax-Managed Small-Cap Fund Admiral Shares (VTMSX), er = 0.14%, in taxable, because both are very tax-efficient and it would take a lot of improved tax-efficiency in the small cap to make up for the difference of 0.09% in the expense ratios.

So please try to make the asset allocation decisions first, at least some tentative decisions, before getting to the rest of these questions. The questions you are asking can be important, but other questions really do need to come first.
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Re: Retirement Planning

Postby lauberge49 » Thu Jul 18, 2013 9:12 am

Somewhere between 50/50 and 60/40 would suit me. I like Wellington and Wellesley in the IRA for the near term. Given that, I need to allocate the 61K in the taxable acct. I took a small short term cap gain there to get out of life strategy funds. Maybe a mix of international, plus TSM?
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Re: Retirement Planning

Postby ruralavalon » Thu Jul 18, 2013 9:34 am

lauberge49 wrote:Somewhere between 50/50 and 60/40 would suit me. I like Wellington and Wellesley in the IRA for the near term. Given that, I need to allocate the 61K in the taxable acct. I took a small short term cap gain there to get out of life strategy funds. Maybe a mix of international, plus TSM?

Do you just not much international at all? If so thats fine, I'm not trying to talk you into or out of that, you just need to say what you want before I can make any overall suggestion.
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Re: Retirement Planning

Postby lauberge49 » Thu Jul 18, 2013 10:30 am

ruralavalon wrote:
lauberge49 wrote:Somewhere between 50/50 and 60/40 would suit me. I like Wellington and Wellesley in the IRA for the near term. Given that, I need to allocate the 61K in the taxable acct. I took a small short term cap gain there to get out of life strategy funds. Maybe a mix of international, plus TSM?

Do you just not much international at all? If so thats fine, I'm not trying to talk you into or out of that, you just need to say what you want before I can make any overall suggestion.


Rather than get out of Wellington/Wellesley at this time, I am going to balance amts in them equally, which will put me at 50/50 in the IRA, will also xfer most of MM to Wellington as part of that move. To get to 60/40, will do 25 VSMAX and 25 VTIAX in the taxable

That is where I am at, and I appreciate all of the help. I am down to 4 funds and a little more diversified.

In January, I will look at this again, and perhaps move to TSM and TBM in the IRA.
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Re: Retirement Planning

Postby ruralavalon » Thu Jul 18, 2013 2:43 pm

lauberge49 wrote:Rather than get out of Wellington/Wellesley at this time, I am going to balance amts in them equally, which will put me at 50/50 in the IRA, will also xfer most of MM to Wellington as part of that move. To get to 60/40, will do 25 VSMAX and 25 VTIAX in the taxable

Looks reasonable to me. Glad I could be a little help. Best of luck to you.
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Re: Retirement Planning

Postby Peter Foley » Thu Jul 18, 2013 3:37 pm

With the thought that the enemy of a good plan is the perfect plan, I think you are the right track. A little more tax efficiency together with a combination of the many good funds that have been recommended should provide you with a less volitile and more secure long term approach. I think it is a good idea to review this in January (or perhaps a couple months later when you do your taxes).
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Re: Retirement Planning

Postby lauberge49 » Tue Jun 10, 2014 9:17 am

We recently had an influx of cash to our taxable acct, so have stopped IRA withdrawals for the rest of this year. I have added 30K in cash to taxable which we will use if necessary. Is there any way to hold that somewhere other than MM fund which charges .17%? I might be better off keeping it all in my checking acct which charges nothing.
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Re: Retirement Planning

Postby Iorek » Tue Jun 10, 2014 9:41 am

lauberge49 wrote:We recently had an influx of cash to our taxable acct, so have stopped IRA withdrawals for the rest of this year. I have added 30K in cash to taxable which we will use if necessary. Is there any way to hold that somewhere other than MM fund which charges .17%? I might be better off keeping it all in my checking acct which charges nothing.


There are a number of banks that offer accounts (checking or savings) with interest in the .5-1.0% range. Capital One 360 is an example, but there are others.
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Re: Retirement Planning

Postby ruralavalon » Tue Jun 10, 2014 2:54 pm

lauberge49 wrote:We recently had an influx of cash to our taxable acct, so have stopped IRA withdrawals for the rest of this year. I have added 30K in cash to taxable which we will use if necessary. Is there any way to hold that somewhere other than MM fund which charges .17%? I might be better off keeping it all in my checking acct which charges nothing.

There are no real good choices for money being held short term, you could consider:
1) an ordinary checking account;
2) short term federally insured CDs;
3) an on-line savings account (link, bankrate.com); or
4) a short term bond fund, like Vanguard Short-Term Corporate Bond Index Fund Admiral Shares (VSCSX).
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