Retired Teacher Seeks Advice

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muffintops
Posts: 2
Joined: Mon Jan 20, 2014 5:39 pm

Retired Teacher Seeks Advice

Post by muffintops » Sun Mar 02, 2014 2:19 am

Hello.
It might seem as if I'm doing things backwards, but now that I've retired, I have a few questions about where to put my money.
Each month I get three government pensions (very fortunate!) that adequately cover my living costs with at least $600 left over.
I am a single woman, 66 years old. I have no credit card debt. Going forward, I may earn money substitute teaching and tutoring -- perhaps $200 - 400 a month.
In the past I've been pretty casual and open-handed with money, but now I could use some advice. Before I start spending my extra money on travel, I want to get things nailed down a bit better.

Present assets
I have $125,000 in Vanguard (Target 2020 & 2025, & GNMA) It's 50% stocks/50% bonds, somewhat conservative allocations. (my 403 b account)
Also $14,000 Roth IRA (also in Vanguard 2020)
Credit Union - money market $6,500

My questions are these:
• Where should I put the money I try to save each month going forward? (I plan to send actual earnings to Roth IRA for 2014, but it will be negligible.). It seems a shame to put money in the credit union where I get no interest. I am working to my goal of having at least $10,000 as "savings." Though it earns nothing, I like the idea of the account being FDIC-insured.
• Since I consider my Roth IRA to also be "liquid savings," do you think I need to have $24,000 (six months' income) set aside -- if I have dependable monthly pensions? Is that just a wise thing to do?
* Most importantly, am I living dangerously by having the lion's share of my money ($140,000) all in Vanguard? Are there safer/smarter options? I don't particularly want to tie up my money in municipal bonds for 5-10 years like Suze O advises. Not sure...

In case you wonder why I don't buy property, I live in the San Francisco Bay Area where it's hopelessly expensive.
I am grateful for your thoughtful advice and creative suggestions!

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Quasimodo
Posts: 1357
Joined: Thu May 03, 2007 1:58 pm

Re: Retired Teacher Seeks Advice

Post by Quasimodo » Sun Mar 02, 2014 11:38 am

Here are a couple of links discussing the safety of Vanguard:

http://www.bogleheads.org/wiki/Vanguard_safety

http://www.bogleheads.org/wiki/Vanguard_FAQ

Other more knowledgable posters will comment on your questions.

Congratulations on retiring!

John
Many wealthy people are little more than janitors of their possessions. | | Frank Lloyd Wright, architect (1867-1959)

muffintops
Posts: 2
Joined: Mon Jan 20, 2014 5:39 pm

Re: Retired Teacher Seeks Advice

Post by muffintops » Sun Mar 02, 2014 1:02 pm

Thanks so much for your quick reply!
I found both links to be quite reassuring and also interesting. This topic comes up occasionally with friends, and these two links will be useful references.
Thanks again, Mr. Q.

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Duckie
Posts: 5287
Joined: Thu Mar 08, 2007 2:55 pm

Re: Retired Teacher Seeks Advice

Post by Duckie » Sun Mar 02, 2014 6:43 pm

muffintops wrote:I have $125,000 in Vanguard (Target 2020 & 2025, & GNMA) It's 50% stocks/50% bonds, somewhat conservative allocations.
Are these Vanguard funds in a 403b plan or in a rollover IRA at Vanguard?
Also $14,000 Roth IRA
Is the Roth IRA at Vanguard?
I am working to my goal of having at least $10,000 as "savings."
I am retired with a pension. $10K is my emergency fund amount. I hold it at Vanguard in Prime Money Market which makes virtually no interest but is available if I need it. A generic savings account would work fine for you. You could also consider 
I savings bonds through Treasury Direct as a second-tier emergency fund. You can't liquidate for the first year. The Roth IRA is also a second-tier emergency fund.

Do you want your AA to be 50% stocks, 50% bonds? What about international?

Do your three government pensions have COLA (cost of living allowance)?

Are you taking Social Security yet? Are you eligible?

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