need suggestions - mid 40's, heading toward disability

[SnowFox]

I have been browsing these forums for months and decided to post today. I have read the BogleHead's Guide to Investing.I am in a situation that is really throwing me for a loop in terms of what to do financially. I am going to make this as simple as possible.

I am in my almost-mid-40's and have had a chronic degenerative disease for over a decade now. Through formal Disability Accommodations with my employer, I have managed to keep working all these years, 3/4 time, salary, full-benefits. But it is a struggle and I push myself very, very hard just to keep my job.

I anticipate leaving the workforce within a year. I will have LTD at that time and then go onto SSDI.

At this point, I have about 80K in savings/money market accounts, and 30-40K in mutual funds at Vanguard. A few thousand of that are in a Roth-IRA that I got from a job I was working in the mid-90's before I got ill.

During all of these years with my illness, I've never known when exactly I will leave work, so I basically stopped investing and began hoarding cash 8-10 years ago. Also, there have been times during these years of working that I was barely making ends meet each month. My medications are insanely expensive (close to 4K per month without insurance), so the fear of losing health insurance (or getting really crappy insurance) has been a huge driving force for me to keep working. Due to a merger at my company a while back, I got a fairly substantial pay increase and can currently save apprx $1,000 per month. I live very frugally and have no dependents.

My question is basically this: given that interest rates are so low, and my future so uncertain, where should I be putting my money? Given that I don't even know if I will be alive by retirement age, I find it hard to think about "long term" investing strategies. I definitely thought that way in my 20's before getting ill, which is when I was investing in index mutual funds at Vanguard.

Right now, I feel a bit stupid for having all this cash sitting in savings accounts, but I am not sure if there is angle here that I am overlooking.

Any ideas appreciated!

[Johm221122]

Welcome to forum,
I would at least put the Max in Roth while working (you have till April for last year),use I bonds and keep a some in high yield savings account.You could use a lifestrategy fund or retirement fund in Ira from VANGUARD

https://personal.vanguard.com/us/funds/vanguard/onefund
John

[Mitchell777]

Very sorry to hear of your health problems. Based on your situation, I would consider a CD ladder, maybe 5 years

[EmergDoc]

Thank goodness for disability insurance and SSDI. This is the kind of situation it is designed for. I believe you'll qualify for Medicare if you go onto SSDI, no? That should solve at least most of the health insurance issue.

[Calm Man]

So sorry about the illness. There are a few things we do not know and maybe you are reluctant to tell th board, understandably. Depending on the degenerative illness (eg if its Huntington's) you may have a reasonable sense of your life expectancy. If its not reduced, then without knowing your amount of LTD and SSDI, nobody can advise you. It sounds like you have no heirs, so you need to milk what you have for life. The time horizon would determine if you should be only in a CD ladder or have some stocks, eg, if you are thinking of more than 20 years.

[SnowFox]

Thanks everyone for the responses! I appreciate it. I am going to come by tomorrow to write more.... thanks again, SnoFox

[celia]

I think I would start with comparing your expected income (SSDI, pension, etc) with expected expenses, realizing that the expenses will increase due to inflation and worsening health. If you stopped working now, would there be a shortfall in being able to meet your expenses? Besides discussing how to cover any shortfall, we might also consider how to reduce some living expenses.

[Call_Me_Op]

My question is basically this: given that interest rates are so low, and my future so uncertain, where should I be putting my money?

I think it is appropriate to keep a large chunk in cash in your situation. I would also consider putting something into stock index funds (say 20-25%) in order to give you some growth.

[Valuethinker]

My question is basically this: given that interest rates are so low, and my future so uncertain, where should I be putting my money?

I think it is appropriate to keep a large chunk in cash in your situation. I would also consider putting something into stock index funds (say 20-25%) in order to give you some growth.

+1. And an expression of regret at the difficult situation OP is in.

Something like 70-80% cash, as a ladder of CDs out to say 4-5 years. If interest rates and/or inflation rise sharply, your CDs will come due and you can reinvest them at higher rates.

20% equities-- something like Vanguard Total Stock Market.

Over time your cash will deplete, hopefully your equities will give you some growth. Conversely if equities do not perform then you will not be destroyed by this.

There might be ways of reducing your drug bill eg generic substitutes? Canadian prescriptions?

The really key thing here is what disability is available to you (eg US Social Security)-- there are lawyers who can help you with this process. Does your employer give you any disability coverage? Post employment medical?

And whether there are any 'means tests' or wealth tests on those benefits? Could you be in a situation where you had too much money?

[Valuethinker]

So sorry about the illness. There are a few things we do not know and maybe you are reluctant to tell th board, understandably. Depending on the degenerative illness (eg if its Huntington's) you may have a reasonable sense of your life expectancy. If its not reduced, then without knowing your amount of LTD and SSDI, nobody can advise you. It sounds like you have no heirs, so you need to milk what you have for life. The time horizon would determine if you should be only in a CD ladder or have some stocks, eg, if you are thinking of more than 20 years.

A very good point. Advice for say, 5 years, is different than for say 20 years. I still think 10-20% stocks is worth it for any period of over say, 5 years. Because OP might lose half of that money in that period, at worst, but could also make +50%.

OP is in a position where if there are heirs, they can look after themselves, unless they themselves are in very bad straights. No one can expect to inherit from someone who is ill, on expensive meds, and unable to work from his or her 40s.

[SnowFox]

Thanks everyone for your comments. Thinking long-term about my financial future (ie, 10-20 years from now) is frankly just too depressing, so for now, I am just trying to make the best decisions I can given what I do have.

I went through of the comments on this thread and jotted down the financial suggestions offered, which are the following:

- put the max I can in a Roth (this seems do-able, I guess I just fear the process of having to prove that I am disabled so I can get the money out when I need to without penalties)

- several mentioned CD ladders. The returns on CDs now are horrible, but they are better than the rates on savings accounts, so putting some portion of my cash in CDs seems like a reasonable step at this point.

- there was a suggestion to put money in bonds, a Lifestrategy fund, stock index funds, Vanguard Total Stock Market (I will need to do some reading on these)

Prior to getting ill, I was interested in investing, read various books on the subject, belonged to an investing club for a while, etc. Now I find I just don't have the energy to even think this about this stuff.

I just checked my account at Vanguard and I currently have $17K in the 500 Index Fund and $27K in the Growth Index Fund. I've had those since back in the 90's and have just left the money there.

Should I be posting on the Investing forum to get suggestions of what mutual funds to consider?

Thanks again!
SnowFox

[dm200]

While, I am quite sure, you would not qualify for regular disability insurance, there is one type that I believe you would qualify for - credit disability on loans. I would try to "convert" any debts that I have to loans with disability coverage. I don't know about mortgage loans, but I am very familiar with credit union consumer loans (persona, auto, etc.). The most commonly sold type of credit disability insurance by credit unions has a very weak "pre-existing condition" exclusion. You can qualify for the coverage if yu are working more than 25 hours a week (possibly 30). If you have (are being treated for in last 6 months)a condition that disables you more than six months from getting te loan/coverage, then the coverage pays.

[Default User BR]

- put the max I can in a Roth (this seems do-able, I guess I just fear the process of having to prove that I am disabled so I can get the money out when I need to without penalties)

Contributions to a Roth IRA can be withdrawn at any time without tax or penalty.


Brian

[SnowFox]

- put the max I can in a Roth (this seems do-able, I guess I just fear the process of having to prove that I am disabled so I can get the money out when I need to without penalties)

Contributions to a Roth IRA can be withdrawn at any time without tax or penalty.Brian

Ok, I remember this now- I can get the contributions out, but isn't it also true that if you are considered legally disabled (which one would have to be in order to be on SSDI), you can get out all the money in a Roth or regular IRA?

[Johm221122]

- put the max I can in a Roth (this seems do-able, I guess I just fear the process of having to prove that I am disabled so I can get the money out when I need to without penalties)

Contributions to a Roth IRA can be withdrawn at any time without tax or penalty.Brian

Ok, I remember this now- I can get the contributions out, but isn't it also true that if you are considered legally disabled (which one would have to be in order to be on SSDI), you can get out all the money in a Roth or regular IRA?

Yes,if your disabled you can withdrawal from ira's with no penalty's
Try asking portfolio question
viewtopic.php?f=1&t=6212
John

[Valuethinker]

Thanks everyone for your comments. Thinking long-term about my financial future (ie, 10-20 years from now) is frankly just too depressing, so for now, I am just trying to make the best decisions I can given what I do have.

I went through of the comments on this thread and jotted down the financial suggestions offered, which are the following:

- put the max I can in a Roth (this seems do-able, I guess I just fear the process of having to prove that I am disabled so I can get the money out when I need to without penalties)

- several mentioned CD ladders. The returns on CDs now are horrible, but they are better than the rates on savings accounts, so putting some portion of my cash in CDs seems like a reasonable step at this point.

- there was a suggestion to put money in bonds, a Lifestrategy fund, stock index funds, Vanguard Total Stock Market (I will need to do some reading on these)

All of these expose you to the risk of loss, which is not good. CDs will not.

It's really important that you sort out what income in disability you have, and some feel for life expectancy.

Prior to getting ill, I was interested in investing, read various books on the subject, belonged to an investing club for a while, etc. Now I find I just don't have the energy to even think this about this stuff.

Simple and straightforward is good.

I just checked my account at Vanguard and I currently have $17K in the 500 Index Fund and $27K in the Growth Index Fund. I've had those since back in the 90's and have just left the money there.

Should I be posting on the Investing forum to get suggestions of what mutual funds to consider?

Thanks again!
SnowFox

SnowFox

Yes.

However the reality is, to keep it simple, that CDs + Money Market Fund (for very short term needs ie less than 1 year, only) + an equity index fund (Vanguard TSM, say) is enough.

Now what you don't want to do is pay tax selling the 500 Index fund or the Growth Index fund (capital gains taxes) just to buy the Vanguard Total Stock Market.

If that would be the case, I would say just leave the money where it is, drawing upon it when you need it. The advantage of TSM over the other 2 is not large enough to really make a difference and certainly NOT to cause you to pay capital gains taxes prematurely.

If your life expectancy is less than 5 years then holding equities is really not necessary-- just a small percentage.

If there's a chance you will live more than 5 years, then holding as much as perhaps 30-35% of your money in equities is not a bad thing to do. I would probably set a ceiling of about 40% but it really does depend on life expectancy.

For simplicity, one fund would be best: Vanguard Total Stock Market. The 2 funds you hold now are close to that, close enough that there is not a huge gain in switching (unless that can be done costlessly, tax free). The Growth Index fund would be the fund to sell first.

Funds are not really what you need to be spending energy on picking. You are in near enough the right funds, and you are with Vanguard. Once you get your fixed income (CDs, MMFs, bond funds) vs. equities right, equity fund selection between those 3 is just not a big issue.

What you have to get a handle on is what your disability income will be, what assistance you will be provided with, what your cost of living will be. How much you will need to draw down on your funds.

Until we know that we are only guessing in trying to help you.

Also in truth given your prognosis it's the time to consider taking the trip you have always wanted to take, whilst you are still well enough to enjoy it. In life we regret more what we did not do, than what we did do. I am not counselling total extravagance (Antarctica is more than $10k per person I believe) but live a little if you possibly can.

I am sorry I cannot do more or make more helpful suggestions.

[ResNullius]

Thank goodness for disability insurance and SSDI. This is the kind of situation it is designed for. I believe you'll qualify for Medicare if you go onto SSDI, no? That should solve at least most of the health insurance issue.

You automatically go on Medicare after two years of receiving SSDI, so you want to get on SSDI as quickly as possible to start the two-year period running.

[david99]

Do you have an estimate of what your annual expenses will be once you stop working? This would allow us to make a better analysis of how you should invest.

I also think that you should take a nice vacation with some of the money while you are able to. Think of someplace that you always wanted to go.

Best wishes.

[dm200]

If you have not already done so, I suggest consulting an experienced (in your state) attorney, probably "elder care" and get suggestions about what you can legitimately do that would maximize, all within the law and regulations, any possible government benefits you might become eligible for in the future.

[SnowFox]

If you have not already done so, I suggest consulting an experienced (in your state) attorney, probably "elder care" and get suggestions about what you can legitimately do that would maximize, all within the law and regulations, any possible government benefits you might become eligible for in the future.

Thanks. I have been working with a disability consultant for a while now who is helping me to prepare for LTD and eventual SSDI. I feel like I am very much on track with this, and based on all of the help from this person, hope to be approved as early on in the process as possible.

I am very fortunate to now be eligible for LTD, which, once approved, will give me 60% of my salary, less SSDI once I start receiving that, until age 65, or older. If my company had not merged into a larger one recently, I would have never been able to get LTD (my old company was too small to offer it), so I am very glad I kept pushing myself to work, as this is a huge benefit.

[interplanetjanet]

I am very fortunate to now be eligible for LTD, which, once approved, will give me 60% of my salary, less SSDI once I start receiving that, until age 65, or older. If my company had not merged into a larger one recently, I would have never been able to get LTD (my old company was too small to offer it), so I am very glad I kept pushing myself to work, as this is a huge benefit.

You have probably been over the language in your policy with a fine-toothed comb already, but it's worth mentioning that most group LTD has a definition of disability that includes time caps - mine, for example, covers the inability to do my own job for two years; to receive coverage after that I have to not be able to work at any job. Depending on your line of work and degree of illness I could imagine this being more or less of an impediment.

Good luck.

[SnowFox]

Do you have an estimate of what your annual expenses will be once you stop working? This would allow us to make a better analysis of how you should invest..

Thank you. For the first 24 months that I am officially out of the work force on disability, I will be getting apprx $1600 per month in LTD, $900 per month in a private STD plan, and I get $12,000 per year as a gift from a family member, so $1,000 per month. That will mean that I have apprx $3500 in income per month for 2 years. My living expenses right now, which does not include the cost of COBRA, are averaging $2K per month. Sometimes as low as $1600, sometimes up to $2400.

One unknown for me is when the Affordable Health Care Act goes into full effect in 2014, I don't know if that might give me some options of paying less than apprx $400 per month for COBRA, while I wait until I am on Medicare. If can do that, it would be great.

So, it seems reasonable to think that for at least 2 years, I will have apprx. $1000 per month in excess of what I need or so. This will give me time to put more in savings.

After the two years, it will get tighter, as my STD plan which provides $900 per month will end, and I will have to try to live on less than apprx $2600 per month, which I think I can do, as some costs will go down when I stop working.

I keep my budget very tight and live very frugally, but I don't really feel "poor" even though on paper I am. I'm actually glad you asked this question, as until now, I've never actually done these numbers before.

[SnowFox]

I am very fortunate to now be eligible for LTD, which, once approved, will give me 60% of my salary, less SSDI once I start receiving that, until age 65, or older. If my company had not merged into a larger one recently, I would have never been able to get LTD (my old company was too small to offer it), so I am very glad I kept pushing myself to work, as this is a huge benefit.

You have probably been over the language in your policy with a fine-toothed comb already, but it's worth mentioning that most group LTD has a definition of disability that includes time caps - mine, for example, covers the inability to do my own job for two years; to receive coverage after that I have to not be able to work at any job. Depending on your line of work and degree of illness I could imagine this being more or less of an impediment.

Good luck.

Yes, I am working with a disability consultant to prepare for all of this. When I leave the workforce, I will be basically also applying for SSDI because I am unable to do any occupation, not just my own. The LTD company needs me to be disabled to my own occupation for two years, then they will either push me to apply for SSDI (which means disabled to any occupation), or to stop receiving those benefits.

[Watty]

Here is a brainstorming idea so take this with a huge grain of salt.

This is not for everyone and if you live in an expensive part of the country then this definitely will not work but one thing you might look at doing is buying an inexpensive duplex with a small down payment while you are still working and might be able to still qualify for a 30 year fixed rate mortgage. You could live in one half and rent out the other half to still have some income.

This might also allow you to find a place that will be accessible if your mobility will likely be limited and to be near public transportation.

In the area I live in a modest duplex like this would start in the ballpark of $75,000 in an OK area. If you could purchase one for $75,000 with 20% down, $15K, that would require a $60,000 mortgage which would have a mortgage payment of less than $300 a month with a 30 year fixed rate mortgage. That is not including taxes and insurance. You should be able to get a normal mortgage with up to four units as long as you live in one.

With the rental income you might actually be paying less than your rent is costing you now. You would have to keep money in reserve for things like maintenance and occasional vacancies so you don't end up in a bind when these happen.

This would also protect you from future rent increases. If you eventually need to move after having lived there five or ten years or more then renting our both sides of the duplex might provide some ongoing income if the numbers work out.

You would have to look at the rental numbers and make sure that having the rental will not affect your ability to collect disability.

Some home equity may not count when you are qualifying for income and asset based assistance.

There are lots of pros and cons to this idea and it is very likely that it will not work for you but it might be least worth considering.

[Valuethinker]

Here is a brainstorming idea so take this with a huge grain of salt.
.

watty it#s a good idea I have seen widows carry on this way

BUT OP is disabled, and presumably getting worse. Rental property is HASSLE-- one bad tenant or one serious problem can turn it into a nightmare. Just try an eviction fight some time.

It's not going to simplify OP's life. That's the issue.

[Valuethinker]

Do you have an estimate of what your annual expenses will be once you stop working? This would allow us to make a better analysis of how you should invest..

Thank you. For the first 24 months that I am officially out of the work force on disability, I will be getting apprx $1600 per month in LTD, $900 per month in a private STD plan, and I get $12,000 per year as a gift from a family member, so $1,000 per month. That will mean that I have apprx $3500 in income per month for 2 years. My living expenses right now, which does not include the cost of COBRA, are averaging $2K per month. Sometimes as low as $1600, sometimes up to $2400.

One unknown for me is when the Affordable Health Care Act goes into full effect in 2014, I don't know if that might give me some options of paying less than apprx $400 per month for COBRA, while I wait until I am on Medicare. If can do that, it would be great.

So, it seems reasonable to think that for at least 2 years, I will have apprx. $1000 per month in excess of what I need or so. This will give me time to put more in savings.

After the two years, it will get tighter, as my STD plan which provides $900 per month will end, and I will have to try to live on less than apprx $2600 per month, which I think I can do, as some costs will go down when I stop working.

I keep my budget very tight and live very frugally, but I don't really feel "poor" even though on paper I am. I'm actually glad you asked this question, as until now, I've never actually done these numbers before.

OK this helps us understand where your are.

You will not need funds immediately. You will have medical coverage in 2 years.

This speaks towards having c. 50-60% in CDs, laddered out to 5 years, all within FDIC insurance limits (very important). PenFed is a Credit Union many recommend here, by virtue of them having military or US civil service connections.

When you start to need that money, it will be there, you haven't lost it-- the FDIC insurance protects you against the bank going bust, the CDs always pay back what you own. If interest rates go up in the meantime, you can 'roll' into higher interest rates.

The balance I think should be in equities. And in Vanguard Total Stock Market (simple, easy, low cost, maximum diversification). However you shouldn't shift funds if that causes you to pay tax or withdrawal penalties. TSM is *marginally* better than VG S&P500 fund, and both are *a little* better than Large Cap Growth.

Please understand 1). I am not a professional 2). I am not US based and therefore my advice is informal, well intentioned but could be completely inappropriate. Bounce it off as many people as you can.

[david99]

I agree with Valuethinker, I don't think that you should get involved with investment property. Investment property can be a huge hassle and involves meeting with tenants, meeting with plumbers, going up and down stairs, making small repairs, and possibly evicting people. A better solution to reduce housing expenses is to move to a less expensive part of the state or country. This isn't practical if you are near family and need their help or if you are near doctors that you like.

It appears that you have about $124,000 to invest. Given the expenses that you project once you stop working, I think that putting $62,000 in a 5 year CD ladder and the other $62,000 in the Total Stock Market index fund sounds reasonable to me.

[SnowFox]

I agree with Valuethinker, I don't think that you should get involved with investment property. Investment property can be a huge hassle and involves meeting with tenants, meeting with plumbers, going up and down stairs, making small repairs, and possibly evicting people. A better solution to reduce housing expenses is to move to a less expensive part of the state or country. This isn't practical if you are near family and need their help or if you are near doctors that you like.

It appears that you have about $124,000 to invest. Given the expenses that you project once you stop working, I think that putting $62,000 in a 5 year CD ladder and the other $62,000 in the Total Stock Market index fund sounds reasonable to me.

Agree with you about the rental property. I am actually concerned about even owning my own home due to the fact that its a struggle for me to even take the trash out every week. I need my landlord to handle all the maintenance. I am very lucky right now to have an incredible landlord- the nicest guy ever!!!! And he keeps his rents low because he wants to keep good long-term tenants.

[SnowFox]

You will not need funds immediately. You will have medical coverage in 2 years.

This speaks towards having c. 50-60% in CDs, laddered out to 5 years, all within FDIC insurance limits (very important). PenFed is a Credit Union many recommend here, by virtue of them having military or US civil service connections.

When you start to need that money, it will be there, you haven't lost it-- the FDIC insurance protects you against the bank going bust, the CDs always pay back what you own. If interest rates go up in the meantime, you can 'roll' into higher interest rates.

The balance I think should be in equities. And in Vanguard Total Stock Market (simple, easy, low cost, maximum diversification). However you shouldn't shift funds if that causes you to pay tax or withdrawal penalties. TSM is *marginally* better than VG S&P500 fund, and both are *a little* better than Large Cap Growth.

Please understand 1). I am not a professional 2). I am not US based and therefore my advice is informal, well intentioned but could be completely inappropriate. Bounce it off as many people as you can.

Thanks for your comments. Several here have mentioned the TSM. Perhaps I could set up a Roth with Vanguard and begin transferring money into that?

[Valuethinker]

Thanks for your comments. Several here have mentioned the TSM. Perhaps I could set up a Roth with Vanguard and begin transferring money into that?

I am not the person to advise you on this-- not US based. The wikis here may be very helpful and if you repost that as a specific question under the personal investment strategy board (there is a recommended format you should use, posted at the top) you should get more replies than you have in this, less well read, board. All the information you have presented here about expected income and expenses is useful to anyone trying to help you, besides just the funds you own. You can reference back to this thread so the interested reader can catch up quickly on the discussion.

For example you may have a work 401k that, upon leaving work, you can roll into Vanguard?

The important things to note from where I sit (not really having a good feel of the different types of US account and their tax position etc) are:

- if this process generates taxable capital gains then do not do it, generally
- the VG large cap growth fund is the one to sell first, the S&P500 and the TSM will track each other very closely (the former is something like 75% the same stocks by value/ market capitalization as the latter)
- if you cannot, because of point 1, move into Vanguard TSM it is not the end of the world, your overall returns should not be radically different

[Valuethinker]

viewtopic.php?f=1&t=6212

has the recommended format for that board. I suggest that you post in that format, with a link back to this discussion, and (subject to your own thoughts) that you say the suggested asset allocation is 50% laddered CDs and 50% Vanguard TSM on my assumptions (if true) basis that:

- you won't need the money in the next 2 years
- it's likely you will need at least some of the money 5+ years from now
- you are in a physical and mental situation where you will not be able to spend a lot of time looking at funds nor in managing this portfolio-- it needs to be 'fire and forget' as much as you can make it- Keep It Simple. You need simplicity in your life at this time

My thought is on an annual basis you would rebalance back towards 50/50 although your fixed income proportion should grow over time (perhaps by 2.0% pa) ie in 5 years time you will be 60% fixed income, 40% equities.

I have not explored the possibility of a 'impaired life expectancy' Single Premium Income Annuity, which might be a useful place to put *some* of your money. I worry that, in the hands of a salesman, this could go seriously wrong for you (for commission reasons they will always try to sell you a less appropriate product). Also if inflation is more than we expect.

I believe people on that board (the first one on the entry screen) will be able to give you helpful and detailed advice vis a vis Roths etc.

[david99]

I just checked my account at Vanguard and I currently have $17K in the 500 Index Fund and $27K in the Growth Index Fund. I've had those since back in the 90's and have just left the money there.

I would not sell the $17k in the 500 Index Fund or the $27k in the Growth Index fund to put them in the TSM index fund if these are taxable accounts. Although once you stop working you may be able to sell a small amount each year and not pay any capital gains tax because you will be in the lowest tax bracket.

You may want to look at what your taxable income will look like once you stop working. See what taxable income you will have from investments and other sources that you have. Will you be paying any taxes once you stop working?

[Valuethinker]

I agree with Valuethinker, I don't think that you should get involved with investment property. Investment property can be a huge hassle and involves meeting with tenants, meeting with plumbers, going up and down stairs, making small repairs, and possibly evicting people. A better solution to reduce housing expenses is to move to a less expensive part of the state or country. This isn't practical if you are near family and need their help or if you are near doctors that you like.

It appears that you have about $124,000 to invest. Given the expenses that you project once you stop working, I think that putting $62,000 in a 5 year CD ladder and the other $62,000 in the Total Stock Market index fund sounds reasonable to me.

Agree with you about the rental property. I am actually concerned about even owning my own home due to the fact that its a struggle for me to even take the trash out every week. I need my landlord to handle all the maintenance. I am very lucky right now to have an incredible landlord- the nicest guy ever!!!! And he keeps his rents low because he wants to keep good long-term tenants.

Long may this go on. It's a risk that your landlord decides to sell but it's the best situation you could imagine. In worst case, you may have to pay someone something to take out the trash. Stay on the good side of your landlord for as long as you can.

I doubt you could get a mortgage in your situation (you'd risk committing fraud, if you knew your income was going to fall in the near future and so obtained a mortgage on false pretenses) and ownership= hassle.

[Johm221122]

Instead of using just US stocks look at using a lifestrategy or retirement fund from VANGUARD (which is total stock,total international and total bond market) will give you a balanced portfolio with no hassle
" Fund Allocations

The LifeStrategy funds have the following target asset mix, implemented with these Vanguard fund portfolios: [1]

Vanguard Total Stock Market Index Fund Vanguard Total International Stock Index Fund Vanguard Total Bond Market IIIndex Fund"
http://www.bogleheads.org/wiki/Vanguard ... tegy_Funds

John

[Valuethinker]

Instead of using just US stocks look at using a lifestrategy or retirement fund from VANGUARD (which is total stock,total international and total bond market) will give you a balanced portfolio with no hassle
" Fund Allocations

The LifeStrategy funds have the following target asset mix, implemented with these Vanguard fund portfolios: [1]

Vanguard Total Stock Market Index Fund Vanguard Total International Stock Index Fund Vanguard Total Bond Market IIIndex Fund"
http://www.bogleheads.org/wiki/Vanguard ... tegy_Funds

John

My thinking of a 'barbell' portfolio (CDs + stocks) is that:

- it is dead simple
- the CD part cannot lose money in nominal terms - OP will know exactly what they have to live on
- equity part is also dead simple. The diversification gains from international etc. are relatively small. Also capital gains distributions should be controlled given low turnover of the fund

Vs that, lifestrategy:

- has volatility in NAV
- is opaque-- how it is invested varies
- we don't know OP's end date-- which fund to choose
- additional diversification benefits are likely small
- bond funds exposed to capital loss if interest rates rise vs. a ladder of CDs

[Johm221122]

Instead of using just US stocks look at using a lifestrategy or retirement fund from VANGUARD (which is total stock,total international and total bond market) will give you a balanced portfolio with no hassle
" Fund Allocations

The LifeStrategy funds have the following target asset mix, implemented with these Vanguard fund portfolios: [1]

Vanguard Total Stock Market Index Fund Vanguard Total International Stock Index Fund Vanguard Total Bond Market IIIndex Fund"
http://www.bogleheads.org/wiki/Vanguard ... tegy_Funds

John

My thinking of a 'barbell' portfolio (CDs + stocks) is that:

- it is dead simple
- the CD part cannot lose money in nominal terms - OP will know exactly what they have to live on
- equity part is also dead simple. The diversification gains from international etc. are relatively small. Also capital gains distributions should be controlled given low turnover of the fund

Vs that, lifestrategy:

- has volatility in NAV
- is opaque-- how it is invested varies
- we don't know OP's end date-- which fund to choose
- additional diversification benefits are likely small
- bond funds exposed to capital loss if interest rates rise vs. a ladder of CDs

I agree taxable should be liquid (CD,high yield bank and i bonds)and retirement accounts should be aggressive and long term (as long as situation allows)
John