Retirement Allocation

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MGJMimi
Posts: 2
Joined: Wed Apr 19, 2017 2:15 pm

Retirement Allocation

Post by MGJMimi » Wed Apr 19, 2017 2:34 pm

Hello Everyone! I just found this, wish I'd know about it a few months ago. My husband received a lump sum retirement payment last year. He is still working. On the advice of the financial planner in his corporation (salaried, not commissioned), we completed a very detailed retirement plan which included all assets, liabilities, expected expenses, living expenses, etc..... and they advised us to allocate our funds 10%cash; 35% US Govt/Corp Bonds; 35%US Large Cap Stocks; 10%US Small Cap Stocks and Real Estate; and 10% Int'l Stocks. (about $800,000.00).

We chose Vanguard and have done as they advised, sort of. There are just SO MANY choices of funds in each of the above categories. The planner at his employment will not be more specific..... I am happy with the stock/bond ratio, but I'd love to have more advice about which bond fund to choose, which Large cap stock fund, etc..... Do you even KNOW how many bond funds there are????? :)

Does any of this sound reasonable to you? The total amount of money is large, at least it seems large to us, but it has to last us the rest of our lives. He plans to retire within the next year. We have figured we can live very comfortably with a 3% withdrawal rate plus his social security. We have no debt.

Thank you for helping....

LeeMKE
Posts: 1538
Joined: Mon Oct 14, 2013 9:40 pm

Re: Retirement Allocation

Post by LeeMKE » Wed Apr 19, 2017 4:04 pm

See this:

https://www.bogleheads.org/wiki/Three-fund_portfolio

The reason the advisor cannot do more is because he is not a licensed advisor. The advice and help you got is excellent. You just need to make the final selection yourself, and around here, we're not reluctant to provide information about how to keep it simple and save yourself paying more in fees than you should.

Welcome!
The mightiest Oak is just a nut who stayed the course.

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FelixTheCat
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Joined: Sat Sep 24, 2011 12:39 am

Re: Retirement Allocation

Post by FelixTheCat » Wed Apr 19, 2017 4:11 pm

+1 on the three fund portfolio.
Felix is a wonderful, wonderful cat.

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Duckie
Posts: 4900
Joined: Thu Mar 08, 2007 2:55 pm

Re: Retirement Allocation

Post by Duckie » Wed Apr 19, 2017 4:23 pm

MGJMimi wrote:and they advised us to allocate our funds 10%cash; 35% US Govt/Corp Bonds; 35%US Large Cap Stocks; 10%US Small Cap Stocks and Real Estate; and 10% Int'l Stocks. (about $800,000.00).

Assuming this is a tax-sheltered account, using the above percentages you could have:

Rollover IRA at Vanguard -- 100%
45% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)
10% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
35% (VBTLX) Vanguard Total Bond Market Index Fund Admiral Shares (0.06%)
10% Cash

If not tax-sheltered, replace VBTLX with (VWIUX) Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares (0.09%).

You should be looking at all your retirement assets as one portfolio. Any employer plans, IRAs, or other accounts earmarked for retirement should be in the mix along with the above account.

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blueblock
Posts: 786
Joined: Sun Oct 19, 2014 6:06 pm
Location: Wisconsin

Re: Retirement Allocation

Post by blueblock » Wed Apr 19, 2017 7:33 pm

MGJMimi wrote:I'd love to have more advice about which bond fund to choose, which Large cap stock fund, etc..... Do you even KNOW how many bond funds there are?????


I retired in 2015 and am very happy with my three-fund portfolio, as mentioned and linked above, not least because it eliminates the guesswork that is troubling you.

For me, "owning the market" allows me to get on with my retirement, without spending inordinate amounts of time tracking the performance of my investments, which is not something I enjoy doing. (You'll want to rebalance from time to time, of course.)

Sconie
Posts: 515
Joined: Sun Feb 07, 2010 10:23 am
Location: Arizona

Re: Retirement Allocation

Post by Sconie » Wed Apr 19, 2017 7:52 pm

I use the four fund portfolio----similar to the Vanguard three fund, however, with the addition of Int'l bonds:

https://www.bogleheads.org/wiki/Vanguar ... _portfolio
I know that you think you understand what you thought I said, but I don't think you realize that what I said is necessarily what I meant......

MGJMimi
Posts: 2
Joined: Wed Apr 19, 2017 2:15 pm

Re: Retirement Allocation

Post by MGJMimi » Thu Apr 20, 2017 4:05 pm

thank you all so much. Looks like I have work to do and a few changes to make.... :)

lostdog
Posts: 501
Joined: Thu Feb 04, 2016 2:15 pm

Re: Retirement Allocation

Post by lostdog » Fri Apr 21, 2017 3:51 pm

Duckie wrote:
MGJMimi wrote:and they advised us to allocate our funds 10%cash; 35% US Govt/Corp Bonds; 35%US Large Cap Stocks; 10%US Small Cap Stocks and Real Estate; and 10% Int'l Stocks. (about $800,000.00).

Assuming this is a tax-sheltered account, using the above percentages you could have:

Rollover IRA at Vanguard -- 100%
45% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)
10% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
35% (VBTLX) Vanguard Total Bond Market Index Fund Admiral Shares (0.06%)
10% Cash

If not tax-sheltered, replace VBTLX with (VWIUX) Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares (0.09%).

You should be looking at all your retirement assets as one portfolio. Any employer plans, IRAs, or other accounts earmarked for retirement should be in the mix along with the above account.


+1

So simple. He basically did it for you.
"Our life is frittered away by detail. Simplify, simplify." -Thoreau | Vanguard Total World Index

sweeden22
Posts: 29
Joined: Fri Nov 18, 2016 6:11 am

Re: Retirement Allocation

Post by sweeden22 » Fri Apr 21, 2017 4:14 pm

MGJMimi wrote:thank you all so much. Looks like I have work to do and a few changes to make.... :)


The work advice was very good and the advice here excellent!!

I am sure you did an acceptable job beforehand and now you get to tweak it. It is wonderful to hear of someone who went to Vanguard from the start than give over a huge chunk of their retirement funds to fees!

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