55 Single Divorced Female Looking To Invest!

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macav933
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55 Single Divorced Female Looking To Invest!

Post by macav933 » Thu Feb 04, 2016 4:42 pm

55 Single divorced Female looking to start investing with 10 year time horizon. $350k cash....small 401k and just started a Roth. No pension and a limited SS history. Given the complex nature of this market....how would you suggest I start to put some of my savings to work given my 10 year horizon. Was thinking of putting 100k to work. Do I dollar cost average over the next 12 months?
As for investments I was thinking of one of the following:
3 Fund Lazy Portfolio
Schwab Intelligent Portfolio
Target 2025 Retirement Fund
Wellington Fund

I was thinking a 40/60 AA. Your thoughts?

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rmelvey
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Re: 55 Single Divorced Female Looking To Invest!

Post by rmelvey » Thu Feb 04, 2016 4:57 pm

I think a 40/60 split would be very wise given your time horizon and assets. You could make it as simple as 30% US Stocks, 10% International Stocks, and 60% Vanguard total bond market. Try to keep funneling money into your 401ks and Roth (max them out each year) and try to put as much of your bond allocation as you can in those accounts. Stocks are best in taxable accounts and bonds are best in those retirement accounts because interest income gets taxed at a higher rate than dividends and capital gains.

Getting as much into the tax advantaged accounts should be a priority, even if it means selling stocks in your taxable account. Just maintain the 40/60 split in total. Once you get older I would consider a SPIA as long as leaving an inheritance isn't a priority.

dbr
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Re: 55 Single Divorced Female Looking To Invest!

Post by dbr » Thu Feb 04, 2016 5:02 pm

Do you have an actual need for all the money ten years from now or do you mean that you expect to retire at age 65? In the latter case the real time horizon for your investing is the rest of your life. It could actually be that you do mean to take all the money and do something else with it ten years from now. There would be a great deal of difference in how one would invest in one case rather than the other. One big difference is that a person with an actual ten year horizon is getting closer and closer to that end point every year while a person investing to go into retirement might pretty much consider their investments to be for the indefinite long term with no particular end in sight.

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Christine_NM
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Re: 55 Single Divorced Female Looking To Invest!

Post by Christine_NM » Thu Feb 04, 2016 5:09 pm

Do you mean 40% stock/60% bond or the other way round?

I had to look up Schwab Intelligent Ps, never heard of it. From what I saw it might be a convenience for someone who already knows what they want and how they want it managed (is there really any such person? or more than three of them? IDK). Are you sure enough of what you want to automate to such a high degree? Anyway, I'd never sign up for that.

Target Date funds are a bit different in that you do not pick the investments and you can always get out of them easily if you do not like what is happening. But these also are a bit too automated for me.

I do like a fixed-allocation balanced fund however, for a hands-off, buy-and-hold approach. You just add money and it takes care of rebalancing for you. Most widely advertised investment strategies are worse than this simple approach.

You mention Wellington (65% stock :confused maybe you meant Wellesley which is 40/60 ), but have you considered the 40/60 Vanguard LifeStrategy Conservative Growth fund? If you want a basic Vanguard index portfolio with 40% stock and 60% bond, this is a very good starting point. I'd put at least 100k in it, lump sum if you dare, DCA if you don't.

The next step up in aggressiveness is the 60/40 Vanguard Lifestrategy Moderate Growth fund. This would be a good choice if you want to consider your time horizon to be more than 10 years.

The difference between Wellington or Wellesley and the Lifestrategy funds would come down to how you feel about international investing. If that's not clear now, it will be when you look at what all these funds own.

Hope this helps.
18% cash 44% stock 38% bond. Retired, w/d rate 2.5%

Call_Me_Op
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Re: 55 Single Divorced Female Looking To Invest!

Post by Call_Me_Op » Thu Feb 04, 2016 5:39 pm

Why the 10 year horizon? Will you not be needing money 20 years from now?
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Coles
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Re: 55 Single Divorced Female Looking To Invest!

Post by Coles » Thu Feb 04, 2016 6:33 pm

Wasn't your name "Tom" at one point?
viewtopic.php?f=2&t=141600&p=2097799

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in_reality
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Re: 55 Single Divorced Female Looking To Invest!

Post by in_reality » Thu Feb 04, 2016 6:37 pm

macav933 wrote: I was thinking a 40/60 AA. Your thoughts?
1) You are entitled to payment equal to half of your ex-spouse's ss payment if you were married for 10 years I believe.

https://www.ssa.gov/planners/retire/divspouse.html

2) You need to have all of your money "at work". A FDIC insured savings account is fine too of course, but other than your "emergency savings", everything should be tallied. If you put $100k in 40/60, and then the rest in the bank, your actually allocation will be much lower right!

3) What are the options in your 401k (fund name and ER please)?

4) I like and use the Schwab's funds in the Intelligent Portfolios. I don't use the Intelligent Portfolio though and don't think you need a small value tilt to your portfolio. It may or may not outperform slightly (that is a topic of frequent and great debate here). There would be periods of underperformance (due to the value holdings) and greater fluctuation (due to the small holdings). Instead of tilting to get (possibly a little) higher returns, you could very sensibly go to 45%/55% or 50%/50% with a three fund portfolio that tracks the market precisely.

5) As for Dollar Cost Averaging, I see no need to do that. The market tends to rise. Generally it is usually slightly better to invest immediately.

(comparison of DCAing, perfect timing, immediate investment, worst luck and staying in cash) http://www.schwab.com/public/schwab/nn/ ... iming-Work

I think you have done well to find a number of good choices!!!! Perhaps more important than choosing the exact perfect one is being committed to saying the course. Once you are invested, if stocks drop 20% and the media is screaming 'they are going to drop all the way to 50% -- get out now!!!!!", you have to be able to ignore it and carry on with the plan. So pick a plan you can stick with and then stick with it. OK?!?

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Toons
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Re: 55 Single Divorced Female Looking To Invest!

Post by Toons » Thu Feb 04, 2016 6:41 pm

"10 year horizon"

Vanguard Balanced Index Fund Admiral Shares.
https://personal.vanguard.com/us/funds/ ... IntExt=INT

:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Christine_NM
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Re: 55 Single Divorced Female Looking To Invest!

Post by Christine_NM » Thu Feb 04, 2016 6:43 pm

Coles wrote:Wasn't your name "Tom" at one point?
viewtopic.php?f=2&t=141600&p=2097799
Ha. I suppose this could be the ex-Mrs. Tom who got custody of the computer and the BH account. :D
18% cash 44% stock 38% bond. Retired, w/d rate 2.5%

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in_reality
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Re: 55 Single Divorced Female Looking To Invest!

Post by in_reality » Thu Feb 04, 2016 7:07 pm

Christine_NM wrote:
Coles wrote:Wasn't your name "Tom" at one point?
viewtopic.php?f=2&t=141600&p=2097799
Ha. I suppose this could be the ex-Mrs. Tom who got custody of the computer and the BH account. :D
"Tom" wrote about expecting a pension.
...
My "bond/fixed asset allocation is some 400k in a future (4 years) DB Pension Plan
The OP states they don't have one.

Maybe "Tom" is asking on behalf of someone else. The OP's post and "Tom's posts" both end with 'Your thoughts?'

Anyway, aren't we being the suspicious types!

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