I would love to pick the collective BH wisdom on the proposed allocations.
Plan to retire: Dec2017 from a Mega-Corp.
Expected Withdrawal Rate: Under 3%
Social Security: Me - 70, DW - 67 (and then shift to spousal)
IRA/401K: Mid 7 figures
Roth: Low 5 figures
Taxable: Mid 6 figures.
Emergency Funds: $50,000
Debt: Mortgage, $130,000 remaining, paid off in Feb2028 - 15 year 2.75%
Tax Filing: Married Filing Jointly
Children: Daughter, already launched (hoping for marriage and grand-babies)
Fed Tax Rate:28%
CA Tax Rate: 9.3%
Age: Me-58, DW-57
Desired Asset Allocation: 57%/39%/4% (start of Retirement)
Desired International allocation: 33% of Equities
Current Asset Allocation: 57%/39%/4%
Currently funds are partially invested with an FA at Merrill Lynch and the other portion is part of my 401K at my Mega-Corp. Plan is to Roll-over the 401K in Jan2018 (after retirement) to an IRA already at Merrill Lynch. In late 2018 I will shift all of the funds to Merrill Edge and begin managing them myself. In addition, I plan a series of Roth Conversions from age 58-70 to fund living expenses and reduce the expected Taxes when RMDs begin.
**Note the Asset breakdown has been revised based on feedback in this thread-revision posted as response below**
In the meantime, I have been working with my FA and have come up with a proposed allocation strategy:
- 5% IEMG ISHARES INC CORE MSCI EMERGING MKTS ETF
14% EFA ISHARES MSCI EAFE
14% VUG VANGUARD GROWTH ETF
5% VBK VANGUARD SMALL CAP GROWTH ETF
14% VTV VANGUARD VALUE ETF
5% VNQ VANGUARD REAL ESTATE
Fixed Income - this represents 12 years of expenses which will take me to age 70 when SS begins. Plan is to reduce this over time to 10 years of expenses and hold there through retirement
- 5% PONPX PIMCO INCOME FUND
27% BIV VANGUARD INTERMEDIATE TERM BOND ETF 31L53
7% BSV VANGUARD SHORT TERM BOND 31L60
Cash - this represents 1 year of expenses + emergency fund
- 4% CASH Cash (USD)
My plan will be to shift my IRA holdings (managed by Merrill Lynch) to the portfolio proposed above once it has been finalized. When the 401K is rolled over in Jan2018, I will re-balance those funds into this portfolio as well. In the mean-time, I do not plan to adjust any holdings in the 401K since none of the options in my desired portfolio is available. We have been managing the portfolio as a whole despite the fact that only a portion is with Merrill Lynch.
- 1. What are your thoughts on the proposed portfolio?
2. Any thoughts on the Asset Allocation Strategy?
3. Any concerns with the International Exposure?
4. Other suggestions or concerns?