Early Retiree Portfolio

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dreamrider
Posts: 27
Joined: Fri Jan 21, 2011 8:14 pm

Early Retiree Portfolio

Post by dreamrider » Sat Mar 10, 2018 1:43 am

I like to retire in 2-5 years and need some opinion on my investment allocation. I'm 40 years old and am maxing out my 401k, ROTH, and putting everything else remaining in my taxable account. The taxable account will continue to grow at a higher rate than my 401k due to the larger contributions. Hopefully they will even out when I retire.

I plan to draw 3-4% in retirement. Is my investment too aggressive? How can I improve my investment? I like to be in more conservative in retirement than I'm currently at. I feel like I'm lacking diversification? I want to make $$ in a bull market but don't want to lose in a bear. ;-)

Thanks in advance.

401k, 53%
VINIX 14.7%
VMCIX 12.5%
VSCIX 12.5%
VTSNX 11%
VEIRX 3.2%

ROTH IRA, 11%
VNQ 11%

Taxable account, 36%

VTI 28.6%
VXUS 3%
Money Market 4%

Emergency fund/Checking, 20k

AlohaJoe
Posts: 3918
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: Early Retiree Portfolio

Post by AlohaJoe » Sat Mar 10, 2018 1:53 am

You should edit your post to list the fund names. Most people don't memorise ticker symbols, which will reduce the number of people who are able to give appropriate feedback. (For instance, I only recognise 3 of the 8 symbols.)

radiowave
Posts: 1868
Joined: Thu Apr 30, 2015 5:01 pm

Re: Early Retiree Portfolio

Post by radiowave » Sat Mar 10, 2018 1:59 am

So what are your annual expenses, and what is the total value of your portfolio? Divide your expenses into your portfolio (accounting for taxes from tax-deferred savings) and that is a rough estimate of how many years you have funded. Have you considered the cost of health insurance until reaching 65 (Medicare)?
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

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raven15
Posts: 359
Joined: Sun Nov 30, 2014 8:01 pm

Re: Early Retiree Portfolio

Post by raven15 » Sat Mar 10, 2018 2:32 am

https://earlyretirementnow.com/2017/09/ ... lidepaths/

This is a good resource for the basic outline. You'll want about 45% US stocks, 30% international stocks, and 25% bonds for an optimal early retiree static portfolio assuming past history is similar to future history and 30-33 times annual expenses are in that portfolio. Perhaps 40-30-20-10 if you are set on REITs (as the 10).


You look light on bonds and international but I don't know 2 of the tickers.
It's Time. Adding Interest.

rkhusky
Posts: 5878
Joined: Thu Aug 18, 2011 8:09 pm

Re: Early Retiree Portfolio

Post by rkhusky » Sat Mar 10, 2018 2:52 pm

Take a look at Vanguard Target Retirement 2025-2035. The allocations in TR 2025 would be on the conservative side, those in 2035 would be on the aggressive side, which may be appropriate for a longer retirement. If you can live on 3% or less, then you can afford to be conservative. If you need 4%, you may need to be aggressive and take higher risk in order to avoid running out of money.

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