Help w/balancing... older now / more bonds???

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
NEUCHATEL
Posts: 2
Joined: Thu Oct 12, 2017 1:01 pm

Help w/balancing... older now / more bonds???

Post by NEUCHATEL » Thu Oct 12, 2017 3:53 pm

Great "classroom" - great teaching! Thank you everyone!
Enjoy reading Forum and learning a lot!
Background:
Recently husband 81/wife 76: via Vanguard documents gave the authority to act on each other's accounts which brings "total" portfolio to $1,145,00.00.
Total portfolio 67% stock/33%bonds. Both good health (still mowing 1.5 ac.w/push lawnmower). Own home. No LT health insurance.
Both draw monthly RMD, sm. pension (his) plus social sec. His RMD + pension + his social sec. sufficient for daily living/monthly expenses. Hers covers any taxes (quarterly/home/cars and insurance = rest into savings (CD ladder) or for travel/fun. Also funding three 529s a little. Last three years, needed to withdraw from Vanguard from various funds for newer car, new heating system, new siding. Future need new roof and money for longer trips and helping with college for three grands starting 2019.

Been w/Vanguard since 1998 w/just a couple of taxable accounts (monthly allocations 2x$100.00. Same year, w/then Strong fully funded two Roth accounts. Moved both IRAs and Roth accounts to Vanguard (2012) at retirement (both worked till 70). Dividends always reinvested.

Looking at "total" (his+hers) and moving on in years, (hopefully many to come), wish to simplify it /rebalance it and thus, need a helping-hand! Would truly appreciate all you experts' thoughts and/or suggestions as to where (taxable/IRA/Roth) it is best to add/or move a certain amount/percentage in order to achieve a better balanced "joint" portfolio - assuming more bonds and "all" dividends to Money Market!

For now, planned is: A) to open very soon a Vanguard Money Market (which one???) moving into it $4000.00 from 500 Index (longest held taxable fund),
B) have all dividends and any capital gains transferred into a Money Market fund.
Taxes: (jointly)
Fed: 15%
State, SC: 2-3%

Emergency Funds: in CD ladder: about $185.000.00 w/online bank (will help w/college for grands)
CD ladder: about $ 40,000.00 w/CU
Current holdings at Vanguard:
Roll-over IRA Accounts = current mix: 60.8% stocks/39.2% bonds:
IRAs:
Hers: Intermediate-Term Investment-Grade Adm. VFIDX (0571) = $59,865.00
Total Bond Market Index Adm. VBTXL (0584) = $61,903.00
Total Stock Market Index Adm. VTSAX (0585) = $64,480.00
Wellesley Income Adm. VWIAX (0527) = $118,900.00
Wellington Adm. VWENX (0521) = $166,621.00

His: Total Int'l Bond Index Adm. VTABX (511) = $37,900.00
Total Stock Market Index Adm. VTSAX (0585 = $102,100.00
Wellesley Income Adm. VWIAX (0527) = $40,700.00
Roths:
Hers: Total Int'l Stock Adm. VTIAX (0569) = $56,425.00
Total Stock Market Index Adm. VTSAX (0585) = $68,880.00

His: Extended Market Index Adm. VEXAX (0598) = $36,415.00
Wellington Adm. VWENX (0521) = $57,282.00

Taxable Accounts: current mix:86.8% stocks/13.2 bonds:
Hers: 500 Index Adm. VFIAX (0540) = $89,270.00
REIT Index Adm. VGSLX (5123) = $18,520.00
Total Stock Market Adm. VTSAX (0585) = $64,188.00
Wellington Investor VWELX (0021) = $32,270.00

His: Wellington Adm VWENX (0521) = 72,248.00

Wow! Too many overlaps???
THANK YOU VERY MUCH IN ADVANCE!

retiredjg
Posts: 30819
Joined: Thu Jan 10, 2008 12:56 pm

Re: Help w/balancing... older now / more bonds???

Post by retiredjg » Sat Oct 14, 2017 11:11 am

Welcome to the forum. :happy

If I understand correctly, your income from pension, RMDs, and SS cover your ordinary living expenses. You have a portfolio of about $1.1 million that you currently use or will use for travel, college for grands, and other things like a new car, roof, etc. Your portfolio is currently about 67% stocks and 33% bonds.

You have adequate emergency funds and are in a low tax bracket.

I'm not sure I understand what your questions are other than which money market fund to use.

You do have a great deal of overlap, but if you know how to figure out your actual overall stock to bond ratio, and if you are happy with it the overlap is harmless. However, simplification might be a nice thing too.

Ah, looking at the title of the thread, you seem to be wondering if you need more bonds. That is entirely up to you.

A portfolio of 67% stocks at your age is quite aggressive. Since it appears you are investing for your heirs and can afford to do so, an aggressive portfolio is OK in your situation if you are completely comfortable with what happens during the crashes. I assume you've been through many crashes before. Would you be OK seeing your $1.1 million drop to something like $700- $800 for awhile during a crash?

Think about that carefully. It appears you have plenty of money for all your goals. It would be a shame for that "blessing" to become a burden or worry to you during market crashes.

Also, consider the cost of long term care if one or both of you should need it.

Post Reply