Retired one month, now what?

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sdcruiser2001
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Retired one month, now what?

Post by sdcruiser2001 » Wed Mar 26, 2014 1:23 pm

My questions are below. I’ve been retired about one month and have planned this for a while. I know I need to get more my retirement accounts out of cash and I’m looking for advice on this. I have several people “willing” or wanting to manage my accounts in addition to all the offers coming in the mail and without any credibility I’m reluctant to turn my accounts over to someone at this time.

Emergency funds: 6 month or more.
Debt: None, mortgage paid off.
Tax Filing Status: Married Filing Jointly
Tax Rate: xx% Federal, xx% State Just retired so hard to calculate now.
State of Residence: CA
Age: 65, wife 67
Desired Asset allocation: 40% stocks / 50% bonds
Desired International allocation: 10% of stocks

Portfolio size: very high 6 figures (401K at Fidelity, can rollover no and SEP, Rollovers at Schwab)
Money Market 72%
Stocks 28% (Vanguard index funds (5), various Mutual Funds(5)

Contributions : None, retired one month

Status and Plans:

I’m newly retired this month. Both of us are now on Medicare. Since I worked this year for two months I don’t plan to withdraw anything from retirement accounts. Source of income is a fixed Pension, $550./month, wife’s SS $1065, Cash $1400./month this year, and 401K $1000./month to be withdrawn Jan 2015.

I will take a spousal benefit next March, 2015 of approximately $500. And defer SS until 70. I will also continue to withdraw a modest amount of money from retirement accounts until then as needed. I could supplement with consulting (former engineer) as needed.

Questions:
1. I obviously have way too much in cash (MM) at this time. I’ve read a bit about 3 fund approach as well as the targeted fund (2010) at Vanguard. I have an acquaintance at a Bank that is a retirement acct mgr and has done a good job according to a few friends. I’ve had a retirement account mgr before and I don’t think it worked out very well. I finally had to take over my accounts and just selected 5 or 6 Vanguard index funds that did pretty well.

My question is if I decide to put money into the targeted fund I’m assuming dumping all of it in at once is not a good move. How quickly should I move into something like this?

2. I was pretty heavy into tech stocks during the dot com crash and that has made me very aware of how easily I could lose a lot of money if I don’t invest wisely. I’ve managed to build my accounts back up by diversifying in Vanguard funds and ignoring market corrections and staying the course until recently. Lack of faith in Congress and retirement recently made me cut back on my Vanguard allocation and now I find myself stuck with way too much cash only earning 0.1%.

Given my conservative leanings now, should I allocate some percentage of my retirement account to short or mid term t-bills or CD’s in addition to what is in the targeted funds? Suggestions as to percentages, etc would be helpful. I wasn’t planning to withdraw more than $100K prior to turning 70. Still trying to see what our budget should be and I’m tracking everything attempting to live on $3K/month this year and maybe $4-5K. /month in the years leading up to when I turn 70. Then I should have approximately $7k/month.

3. I’m pretty confused with all of the options as to what I should be doing with my money and while I know no one can guarantee the outcome, I don’t like the idea of investing thru a bank or paying someone 1% to manage my accounts unless I have some confidence in them. Schwab offers a lot help in this regard and I plan to at least talk to my advisor there. Any advice would be appreciated and consider in this regard.

Thank you for your time and kind consideration.

placeholder
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Re: Retired one month, now what?

Post by placeholder » Thu Mar 27, 2014 6:13 pm

You don't have any Roth IRAs?

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Phineas J. Whoopee
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Re: Retired one month, now what?

Post by Phineas J. Whoopee » Thu Mar 27, 2014 6:38 pm

Hi sdcruiser,

Welcome!

You raise several important points, and ones which we see here at bogleheads.org frequently. My first and most important advice is not to do anything hastily or rashly.

I agree with your instinct that paying 1% or more for somebody to invest your assets for you is a poor idea. Successful investing is simple, although not easy. You'd be providing 100% of the funds, and taking 100% of the risk, but earning 1% (and then some) less than the underlying return.

I'd say to do two things soon:

1) Educate yourself. There's nothing here a former engineer shouldn't be able to understand. Indeed, often the tendency is to try to overcomplicate things in the belief more complex must be more better. In investing it's the opposite. To begin with I suggest our site's wiki: Getting Started. It will lead you to additional reading, and a lot of people find The Bogleheads' Guide to Retirement Planning to be very valuable (the URL relates to bogleheads.org receiving a small pittance toward its operating expenses if you buy the book through Amazon - I personally borrowed it from the library).

2) While educating yourself there is no reason to accept 0.1% (are you sure it isn't 0.01%?) on your cash. You should be able to use short-term bond funds, CDs, and even FDIC-insured bank accounts to do a little better with little capital risk.

Read, think, come back, ask questions, and if you'd like really good suggestions, fill in your original post with full detail according to this format we've developed:

Asking Portfolio Questions

Above all, don't panic! And there's no need to move in a hasty manner.

PJW

[Edited to add: I believe somewhere I have a 4MB SanDisk Cruzer, but from a couple of years after 2001. Is that what your screen name refers to? Or is it something boring and ordinary like San Diego, or South Dakota, but who can tell the difference? :D ]

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Raybo
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Re: Retired one month, now what?

Post by Raybo » Thu Mar 27, 2014 7:22 pm

You say you lost a lot of money in 2000. This is either because a) you invested in companies that went broke or b) you sold at the bottom and didn't put anything back in until the market had recovered.

If you can't maintain money in stock investments when they go down, you probably shouldn't be investing in stocks very much. It looks like you don't need much money to live on so it might not matter all that much.

I'd suggest that you look into Liability Matching Portfolios (lots of discussion of them on the board of late).

The key is not to take more risk than you "need" to take. If you can fund you and your wife's retirement without putting much into stocks, it might be better for your peace of mind not to.

Certainly, don't do anything quickly and don't assume others have your best interests at heart. Lastly, getting a recommendation about some adviser as having "done a good job" is meaningless if the people making the recommendations have no idea about finances. How are they to evaluate someone's competence?
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

The Wizard
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Re: Retired one month, now what?

Post by The Wizard » Thu Mar 27, 2014 7:51 pm

Woulda been real much better to have checked in with us a few years ago, but that's water under the bridge.
You have some learning to do along with some personal Risk Tolerance to determine. It might be good to put the bulk of your cash into a single Vanguard Target Retirement or LifeStrategy balanced fund while you do the homework required to understand more.

One thing you DON"T need is to pay an advisor 1% of your assets annually on an ongoing basis...
Attempted new signature...

z3r0c00l
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Re: Retired one month, now what?

Post by z3r0c00l » Thu Mar 27, 2014 9:42 pm

sdcruiser2001 wrote:MI was pretty heavy into tech stocks during the dot com crash and that has made me very aware of how easily I could lose a lot of money if I don’t invest wisely. I’ve managed to build my accounts back up by diversifying in Vanguard funds and ignoring market corrections and staying the course until recently. Lack of faith in Congress and retirement recently made me cut back on my Vanguard allocation and now I find myself stuck with way too much cash only earning 0.1%.


So you learned your lesson, but really didn't learn it. I think you actually have the correct amount of money in fixed income considering your past record with investing. Stocks do incredibly well for 5 years in a row, and now you want to buy back in? I suggest you put your money in CDs and keep the 28% in stocks and call it a day.

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daytona084
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Re: Retired one month, now what?

Post by daytona084 » Thu Mar 27, 2014 10:06 pm

Sounds like you are in good shape. You are quite close to simple rule of thumb "age in cash+bonds". (or "100 minus age in stocks"). Just take that money market cash and put it in Vanguard Bond Index funds (go shorter term if you are worried about rising interest rates), and FDIC insured bank accounts, (such as Ally Bank or CapitalOne 360). Since yields are still low, I don't think the exact percentages are all that important. It seems like a big deal to make a sweeping change all at one time but in this case it's a no-brainer. Move it all to higher yielding banks and bond index funds, enjoy the earnings as they roll in, and think about other things. Definitely don't pay someone to manage your money.

Professor Emeritus
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Re: Retired one month, now what?

Post by Professor Emeritus » Thu Mar 27, 2014 10:36 pm

This is our first year fully retired

We keep our low risk money in Wellesley Admiral shares. My general argument for a cheap managed income fund is that indexing has not been as clearly demonstrated for bonds and income stocks as it has for the stock market as a whole. At the same time we keep the same in stocks on broad based index funds at Vanguard and tsp (We have substantial DB pensions but DW is disabled YMMV)

sdcruiser2001
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Re: Retired one month, now what?

Post by sdcruiser2001 » Fri Mar 28, 2014 6:36 pm

Phineas J. Whoopee wrote:Hi sdcruiser,

Welcome!
You raise several important points, and ones which we see here at bogleheads.org frequently. My first and most important advice is not to do anything hastily or rashly.

I'd say to do two things soon:

1) Educate yourself.
2) While educating yourself there is no reason to accept 0.1% (are you sure it isn't 0.01%?) on your cash. You should be able to use short-term bond funds, CDs, and even FDIC-insured bank accounts to do a little better with little capital risk.

Read, think, come back, ask questions, and if you'd like really good suggestions, fill in your original post with full detail according to this format we've developed:

Asking Portfolio Questions

Above all, don't panic! And there's no need to move in a hasty manner.

PJW

[Edited to add: I believe somewhere I have a 4MB SanDisk Cruzer, but from a couple of years after 2001. Is that what your screen name refers to? Or is it something boring and ordinary like San Diego, or South Dakota, but who can tell the difference? :D ]


Thanks for you detailed response. Apparently my post brought out the urge to help others which seems to be predominate throughout this forum from "most" responses and that's Those "other" comments are best left unanswered since they were not really trying to be helpful. I will say that I did manage to increase my account more than 5X from it's all time low of about $173K in about 12 years. Not earth shaking but a lot of those years the market was perfectly flat. I probably could have done better but I wasted a couple of years with an advisor that wasn't helping much and it was a difficult time in the markets as well.

And I didn't really sell in a panic, rather I waited too long to sell and kept thinking, "I'm an investor in these companies" not a speculator. But I probably should have know that Sun, AMCC and others were grossly overvalued thru greed and speculation and just were not worth what people were paying for them. If I had sold say 6 months after the crash I probably would have twice what I have today. And I did not panic when 2008 hit because I was diversified and believe that this time would be different and the values would come back eventually, which they did and then some.

You are correct, I'm only getting 0.01% on the MM funds at Schwab. I was thinking about the checking account when I said 0.1%. And yes sd stands for something boring like San Diego.

I will add the additional detail you mentioned and will also look into the several references mentioned at this site. I met with my potential advisor/acquaintance to see what he had to say. He was very confident and upbeat and of course a lot of this was his sales pitch. I saw a lot of the result of the money they make in their office. Suits and watches I could never afford as highly paid engineer, lol and plush offices in an extremely high rent district. None of which really led to my giving them my account, just the opposite for now. Just a little too slick. Sort of the same feeling I get with some, not all, car sales people, lol. Anyway thanks very much for your advice.

ktwalrus
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Re: Retired one month, now what?

Post by ktwalrus » Fri Mar 28, 2014 7:05 pm

I'd forget about getting an advisor to manage your retirement funds. If I were in your position, I would just move all your retirement funds into Vanguard Target Retirement 2015 and call it a day. This is a very inexpensive way to go and your money is allocated in a manner that is deemed, by Vanguard, to be appropriate for those just entering or nearing retirement. Then you can just kick back and enjoy retirement without worrying about whether your money is invested wisely for someone in your situation.

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Re: Retired one month, now what?

Post by z3r0c00l » Fri Mar 28, 2014 7:29 pm

sdcruiser2001 wrote:Those "other" comments are best left unanswered since they were not really trying to be helpful. I will say that I did manage to increase my account more than 5X from it's all time low of about $173K in about 12 years.


As to the 500% return in 12 years, please tell us how you did it because you more than doubled the performance of the S&P 500, perhaps tripled if more than 5x.

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Peter Foley
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Re: Retired one month, now what?

Post by Peter Foley » Fri Mar 28, 2014 7:56 pm

Have you checked your 401k to see if Fidelity offers some sort of Stable Value fund? If they do, that would be one place to park a fair amount of the money currently earning very little. I think a second option is the one mentioned by Professor Emeritus, Wellesley. Putting some funds in Wellesley would increase your equity holdings and provide a better non equity return than you are currently getting.

This is not a total solution, but some funds in a stable value plus dollar cost averaging into Wellesley would be a reasonable starting point for the next year or so.

sdcruiser2001
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Re: Retired one month, now what?

Post by sdcruiser2001 » Fri Mar 28, 2014 9:54 pm

z3r0c00l wrote:
sdcruiser2001 wrote:Those "other" comments are best left unanswered since they were not really trying to be helpful. I will say that I did manage to increase my account more than 5X from it's all time low of about $173K in about 12 years.


As to the 500% return in 12 years, please tell us how you did it because you more than doubled the performance of the S&P 500, perhaps tripled if more than 5x.


Notice I didn't say return. Sorry if I misled you. I said increase. I put the max into the my 401K every year, including the make up amount of about $5000.-5500K. My company matched with 6-7% for 7 out of 9 years there. It was only about 3-4% the last two years. I also funded a SEP IRA during that time to which I think I contributed $40-50K.

sdcruiser2001
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Re: Retired one month, now what?

Post by sdcruiser2001 » Fri Mar 28, 2014 9:59 pm

Peter Foley wrote:Have you checked your 401k to see if Fidelity offers some sort of Stable Value fund? If they do, that would be one place to park a fair amount of the money currently earning very little. I think a second option is the one mentioned by Professor Emeritus, Wellesley. Putting some funds in Wellesley would increase your equity holdings and provide a better non equity return than you are currently getting.

This is not a total solution, but some funds in a stable value plus dollar cost averaging into Wellesley would be a reasonable starting point for the next year or so.


The Fidelity accounts are from work and since they limited I'll probably roll those over to Schwab soon where I have lots of options. Yes Wellesley, like the targeted funds, do seem to be very conservative and lower risk. I think the problem of getting what used to be fair return on fixed income money during retirement is going to be a big problem for us baby boomers now retiring. If we want even 2-3% we're going to have to take a larger risks than our parents did to get that or be satisfied with 0.01%!

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nedsaid
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Re: Retired one month, now what?

Post by nedsaid » Fri Mar 28, 2014 11:33 pm

sdcruiser2001, it is amazing how much companies can find out about you. Years ago, I listened to a presentation at a Rotary Club meeting where the presenter said that direct marketing companies only need to know your street address in order to know a lot about you. They may not know about YOU personally but can make some pretty good guesses just based on the neighborhood in which you live.

Things like political affiliation, income levels, net worth. Just from knowing your home address and knowing that you have hit the "magic age", they can make a pretty good guess that you might have a pretty substantial net worth. I don't think they necessarily know about your personal information. But they can infer an awful lot.

So in the eyes of financial salespeople, you are a fat pitch right over the plate ready to be hit out of the park!!
A fool and his money are good for business.

ghostdog1108
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Re: Retired one month, now what?

Post by ghostdog1108 » Fri Mar 28, 2014 11:38 pm

Any stable value funds as previously asked?

sdcruiser2001
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Re: Retired one month, now what?

Post by sdcruiser2001 » Sat Mar 29, 2014 9:07 am

nedsaid wrote:sdcruiser2001, it is amazing how much companies can find out about you. Years ago, I listened to a presentation at a Rotary Club meeting where the presenter said that direct marketing companies only need to know your street address in order to know a lot about you. They may not know about YOU personally but can make some pretty good guesses just based on the neighborhood in which you live.

Things like political affiliation, income levels, net worth. Just from knowing your home address and knowing that you have hit the "magic age", they can make a pretty good guess that you might have a pretty substantial net worth. I don't think they necessarily know about your personal information. But they can infer an awful lot.

So in the eyes of financial salespeople, you are a fat pitch right over the plate ready to be hit out of the park!!


Yes that's about what I felt like sitting in this advisor's office. I was swayed a bit by the "sincerity" of sales pitch but I always give it time to sink in and reflect. I do like this guy personally and think he has a bit of integrity. But he also has to sell and produce to keep his employer's happy and I think they put a lot of pressure on their employees to produce to pay for the cost of "looking successful".

The original advice I received about not being too hasty keeps coming back to me. Needless to say I got a similar pitch from my Schwab advisor although not as personal since I don't have a personal connection with that person. I have a friend who invested with his Schwab advisor's recommendations. They were pushing some fund that offers 3 different risk levels. I don't think he's done all that well in the short term with his choice but maybe long term he will.

sdcruiser2001
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Re: Retired one month, now what?

Post by sdcruiser2001 » Sat Mar 29, 2014 9:15 am

ghostdog1108 wrote:Any stable value funds as previously asked?


I know Schwab offers a few options in this regard. All my funds at Schwab are index funds from Vanguard (VTSMX, VFINK, FGENX, VEURX and VGTSX) with the exception of QQQ for NASDAQ coverage and all are very modest amounts of about $10K each now. The majority of my stock is in mutual funds, some index, offered thru work at Fidelity which I might rollover into Schwab at some point. The cash in the Schwab account is in the money market fund SWMXX paying only 0.01%

ghostdog1108
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Re: Retired one month, now what?

Post by ghostdog1108 » Sat Mar 29, 2014 10:44 am

The reason I ask is that many company 401k's like the one I have through my employer have stable value fund(s) which typically have a guaranteed
minimum pay out based on their claims paying ability.
For example my plan has two; CREFF-TIAA which currently has a 3% guaranteed minimum but has paid up to 5-6% in years past and Hartford Stable Value
which is currently paying 3.5%.
They are considered variable annuities but I can move in or out of them as I see fit.
Perhaps I am just fortunate to have these options.

ghostdog1108
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Re: Retired one month, now what?

Post by ghostdog1108 » Sat Mar 29, 2014 10:45 am

By the way, the plan is managed by Fidelity...,

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nedsaid
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Re: Retired one month, now what?

Post by nedsaid » Sat Mar 29, 2014 12:13 pm

One thing you could do with your cash is an FDIC Insured ladder of Bank Certificate of Deposits. You could put your cash into one, two, three, four, and five year CD's and buy a new five year CD every time one expires. You won't get great interest but you don't have to worry about principal fluctuation as you would in bond funds. Or maybe 1/2 in bond funds and 1/2 in a CD ladder. You could get CDs through the Vanguard Brokerage.

I am 54 and have some years to reinvest my dividends from my bond funds. So I do not worry about rising interest rates. But for a retiree, this is a different matter. You might want to give a CD ladder some consideration. You could do this with treasuries also but you would pay a small fee through your broker.

A Vanguard Target fund for retirees wouldn't be a bad idea. Vanguard's expert opinion on asset allocation for someone your age is at least as good as your own opinion. If you decided to do this, you could just go all in at once. A lot of folks around here like the Wellington and Wellesley funds at Vanguard. One of them is 40% stocks and the rest bonds and might be just up your alley. I think it is the Wellesley fund that is 40/60%.

Don't make your investment decisions based solely on political events. I myself have concerns along these lines and for this reason have an internationally diversified portfolio. The lion's share of my portfolio is still US based but I have International Stock and Bond Funds in case things go wrong here. Despite my concerns about our national politics, US Stocks did great the last five years. My thoughts are that probably 40% or even 50% of your portfolio should be in stocks. I would put 20-30% of your stocks into International.

Another option would be to annuitize a portion of your portfolio and take the income. I have posted about the AIG debacle and my concerns that there is no Federal Insurance program for annuities and that they are backed only by State Guarantee Associations. Insurance companies do go insolvent. Despite all of this, the track record for safety for immediate annuities is almost 100%. I would find the guarantee limits for your state and keep those in mind when buying an annuity. Stick with the strongest companies and you might even split your investment between two or three companies. Perhaps you could do this with 20% of your retirement portfolio. Put a lot of thought in before doing this as this is an irrevocable decision.

Vanguard also offers an advisory service. They can manage your funds for you. The cheapest way to have someone manage your funds is a Vanguard Target Fund for retirees. I don't have an account there, so you will have to research this. Certainly they will be cheaper than anyone else. Why not have Vanguard draw up a financial plan for you?
A fool and his money are good for business.

sdcruiser2001
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Re: Retired one month, now what?

Post by sdcruiser2001 » Sat Mar 29, 2014 11:45 pm

ghostdog1108 wrote:The reason I ask is that many company 401k's like the one I have through my employer have stable value fund(s) which typically have a guaranteed
minimum pay out based on their claims paying ability.
For example my plan has two; CREFF-TIAA which currently has a 3% guaranteed minimum but has paid up to 5-6% in years past and Hartford Stable Value
which is currently paying 3.5%.
They are considered variable annuities but I can move in or out of them as I see fit.
Perhaps I am just fortunate to have these options.


I just looked at what they offer us and they just added all of the Vanguard targeted funds in addition to things like Dodge and Cox and Fidelity Growth funds. There are also a few bond funds like VAIPX which lost about 6% for the last year and PTTRX which only lost .35% for that period. My top 4 funds in the employer account did anywhere from 28-40% for the last year so I can see why this account grew so well recently. I think I have about $40K in each of these.

Yes I was looking at laddering today and was surprised how low the rates are thru Schwab verses Ally Bank. 0.2% for a 1 year CD at Schwab and 0.99% at Ally Bank. I only have my checking account at Ally not my 401K so I would have to move some funds over there to take advantage of their CD rates. Maybe that would be a good location to use for laddering and from where I make future 401K withdrawals.

I'll have to look into those stable value funds you mentioned. My former company doesn't offer anything like that. Maybe Schwab does. Thanks.

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Re: Retired one month, now what?

Post by mnvalue » Sun Mar 30, 2014 1:21 am

The nature of stable value funds is such that they can only exist in 401k accounts, not on the open market. So if it's not in your 401k, don't bother looking elsewhere.

In reading your posts, I see a strong theme about investment performance. It's fine to compare (essentially) risk-free, guaranteed rates of return to other risk-free, guaranteed rates of return. So comparing savings accounts to CDs and CDs to other CDs is fine. And even though they're not technically risk-free, money market rates of returns fall into this same category. They're promises which can reasonably be relied upon, so you just want to pick the best one, possible based on other factors too. For example, choosing higher return in exchange for locking up your money in a longer CD vs. choosing less return in exchange for liquidity by using a savings account.

But what you cannot do is look at the past performance of funds and assume that's somehow useful in choosing where to invest. You said you've "just selected 5 or 6 Vanguard index funds that did pretty well". That's bad. Note, I'm not saying to pick funds that did poorly. I'm saying that past performance of specific funds is useless as a factor in how you should build your portfolio.

What you need to do is: First, decide on an asset allocation, just the stock vs. bond split. Some ways you might do that:
1) Age in bonds (100-age in stocks), a common rule of thumb, would suggest 34% stocks, 66% bonds.
2) Vanguard's Target Retirement 2015 fund, which targets your situation, is 55% stocks, 45% bonds.
3) Vanguard has a risk estimator here: https://personal.vanguard.com/us/FundsInvQuestionnaire
4) Figure that in a really bad year, the stock portion of your portfolio will be cut in half. You must be able to endure that, both financially (still have enough money to get by in the short-term) and emotionally (not sell your holdings at the bottom). So if you're 40/60 (40% stocks / 60% bonds), you can expect and need to be able to handle a 20% drop.

Once you have your asset allocation picked, then building a 3-fund portfolio is pretty trivial. We can help there, if you use the suggested "Asking Portfolio Questions" template. Then, you can worry about tiny details like how much of your fixed income allocation should be bonds (and what duration), how much should be CDs (and what sort of laddering), and how much should be TIPS for inflation protection. But it's most important to get the big details right first, before you worry about the smaller ones.

sdcruiser2001
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Re: Retired one month, now what?

Post by sdcruiser2001 » Sun Mar 30, 2014 10:36 am

mnvalue wrote:The nature of stable value funds is such that they can only exist in 401k accounts, not on the open market. So if it's not in your 401k, don't bother looking elsewhere.

But what you cannot do is look at the past performance of funds and assume that's somehow useful in choosing where to invest. You said you've "just selected 5 or 6 Vanguard index funds that did pretty well". That's bad. Note, I'm not saying to pick funds that did poorly. I'm saying that past performance of specific funds is useless as a factor in how you should build your portfolio.

Once you have your asset allocation picked, then building a 3-fund portfolio is pretty trivial. We can help there, if you use the suggested "Asking Portfolio Questions" template. Then, you can worry about tiny details like how much of your fixed income allocation should be bonds (and what duration), how much should be CDs (and what sort of laddering), and how much should be TIPS for inflation protection. But it's most important to get the big details right first, before you worry about the smaller ones.


I wanted to clarify one thing. I picked these index funds probably in 2004 or so. I did base it on trying diversify my holdings. The only one I sold early was the real estate index fund. And while they dropped like everything else in 2008, they all recovered well and grew with the market since then and I didn't panic or sell off until I decided I wanted less risk. It was only Nov. of last year when I knew I was retiring that I took out the profits plus some of the principal and put them into a MM since I was very near retirement. I think the mistake I did make was not having a very clear plan of where this money was to go other than into a MM.

Having all tech stocks in 2000 was a huge mistake of course. This time around I had a modest exposure thru QQQ and whatever the other funds held in tech stocks. And tech has been good for my portfolio. I did resist the urge to put everything into QQQ for instance.

Ally bank does have IRA accounts so the CD's can be purchased thru those and I think I could transfer one of my IRA accounts there for the laddering portion of my portfolio. I agree with you that I need to consider allocations first and I'm leaning towards the 30-35/65-70 stock to bond split which says the 2015 fund doesn't really meet that. I think the 2010 fund is almost about at that level.

Yes a 20% drop does seem to be hard to bear but as long as I'm pretty diversified I would not panic and didn't in 2008 in spite of how bad it looked.

Thanks for all your thoughtful comments. It will take me some time to think about all of this and respond.

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Phineas J. Whoopee
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Joined: Sun Dec 18, 2011 6:18 pm

Re: Retired one month, now what?

Post by Phineas J. Whoopee » Mon Mar 31, 2014 2:33 pm

sdcruiser2001 wrote:...
Notice I didn't say return. Sorry if I misled you. I said increase. I put the max into the my 401K every year, including the make up amount of about $5000.-5500K. My company matched with 6-7% for 7 out of 9 years there. It was only about 3-4% the last two years. I also funded a SEP IRA during that time to which I think I contributed $40-50K.

No Beardstown Lady thou! :happy
PJW

sdcruiser2001
Posts: 9
Joined: Wed Mar 26, 2014 1:13 pm

Re: Retired one month, now what?

Post by sdcruiser2001 » Mon Mar 31, 2014 7:37 pm

Phineas J. Whoopee wrote:
sdcruiser2001 wrote:...
Notice I didn't say return. Sorry if I misled you. I said increase. I put the max into the my 401K every year, including the make up amount of about $5000.-5500K. My company matched with 6-7% for 7 out of 9 years there. It was only about 3-4% the last two years. I also funded a SEP IRA during that time to which I think I contributed $40-50K.

No Beardstown Lady thou! :happy
PJW



Pretty funny now that I know who the Beardstown Ladies are. No I don't think I'll be starting an investment club real soon, lol.

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