Request Advice/Opinion on Rearranging New Brokerage Account

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goldy18
Posts: 21
Joined: Sat May 05, 2018 12:30 pm

Request Advice/Opinion on Rearranging New Brokerage Account

Post by goldy18 » Sun Jun 10, 2018 4:01 pm

I posted last month requesting assistance with improving my portfolio ( viewtopic.php?f=1&t=248853&hilit=Reques ... +Portfolio ) and received several helpful suggestions. I finally got out of my inertia and opened a brokerage account at Vanguard. These are the funds I transferred from another brokerage and I was informed Friday that they are now successfully in my new brokerage account at Vanguard:

2% of portfolio in Intel stock
2% of portfolio in Microsoft stock
3% of portfolio in American Funds Capital Income Builder (CIBFX)
2% of portfolio in American Funds Europacific Growth (AEPGX)
3% of portfolio in American Funds Investment Co. of America (AIVSX)
2% of portfolio in American Funds Smallcap World (SMCWX)

I am in my mid-80's. My total portfolio is low-mid six figures. No debt. Pension and social security cover majority of my needs. Other than the monies in the above new account, the rest of my portfolio held elsewhere is:

32% cash in Money Market & Credit Union savings accounts

23% Credit Union CD's

Inherited IRA at Vanguard:
2% Vanguard Wellington Fund

Traditional IRA at Vanguard:
14% Vanguard Life Strategy Income fund
14% Vanguard Wellesley Income fund

In the new brokerage account at Vanguard, I plan to keep the Intel and Microsoft stock but to sell the American funds and purchase Vanguard funds. But first, I also need to take distribution from both the traditional and inherited IRA and plan to have those monies moved over to the new brokerage account to buy Vanguard funds with. Then I will start exchanging the American funds for Vanguard funds. Does the following (one step at a time) plan of action seem reasonable?

1. Take distribution from inherited IRA (all 2%) - transfer Wellington fund to brokerage account as investor shares
2. Take distribution from traditional IRA (2%) - transfer monies to settlement account and buy more Wellington fund to make it eligible for admiral shares (I have sentimental attachment to Wellington but would a different fund be more appropriate?)
3. Figure out if I can sell any of the American funds now in the new brokerage account without capital gains affecting my income tax and, if so, which American funds to sell first and which Vanguard funds to exchange them for? I thought maybe I could/should be a little more aggressive with the mutual funds in the new account since I already have almost a quarter of my total portfolio in CD's ??? Funds that I thought might be appropriate are: Life Strategy Conservative Growth, Balanced Index admiral, Total Stock Market Index admiral - or some of each. Suggestions welcome. I will do these exchanges gradually so as not to incur higher taxes from the capital gains.

Going forward, I plan to have IRA distributions transferred over to the brokerage account (as opposed to just taking the distributions in cash which I have wrongly been doing). I probably will use some of the cash currently in the savings accounts to purchase more of the Vanguard funds after I get them set up; still nervous/undecided about that.

Sorry this is so long. I didn't see how to make it any shorter. I would appreciate any thoughts/suggestions as I am really not very sure of myself at all. I have read about all of the different funds and expense ratios and percentages of stocks/bonds at Vanguard and on these forums until my mind is spinning. I very much appreciate this site as a sounding board and source of guidance. It is so generous of the contributors to share their time and expertise with those of us who need it

Goldy .

Jablean
Posts: 70
Joined: Sat Jun 02, 2018 2:38 pm

Re: Request Advice/Opinion on Rearranging New Brokerage Account

Post by Jablean » Sun Jun 10, 2018 5:31 pm

What's your goal(s)?

How much above your pension/ss do you need - Are the RMDs enough?

How are you covered for long term care?

Do you want to leave money to heirs/charity?

Does your net worth also include a house w/ or w/o mortgage?

goldy18
Posts: 21
Joined: Sat May 05, 2018 12:30 pm

Re: Request Advice/Opinion on Rearranging New Brokerage Account

Post by goldy18 » Mon Jun 11, 2018 10:05 am

Jablean wrote:
Sun Jun 10, 2018 5:31 pm
What's your goal(s)? to expire before my money does

How much above your pension/ss do you need - Are the RMDs enough? -pension/ss provides necessities; RMD's provide extras]

How are you covered for long term care? I have long term care insurance

Do you want to leave money to heirs/charity? Yes, if possible - but not essential

Does your net worth also include a house w/ or w/o mortgage? No - I own small townhouse, no mortgage

Jablean
Posts: 70
Joined: Sat Jun 02, 2018 2:38 pm

Re: Request Advice/Opinion on Rearranging New Brokerage Account

Post by Jablean » Tue Jun 12, 2018 2:25 pm

2. Take distribution from traditional IRA (2%) - transfer monies to settlement account and buy more Wellington fund to make it eligible for admiral shares (I have sentimental attachment to Wellington but would a different fund be more appropriate?)
Buy more Wellington fund where? I only see it in your inherited IRA and you can't buy more there.

goldy18
Posts: 21
Joined: Sat May 05, 2018 12:30 pm

Re: Request Advice/Opinion on Rearranging New Brokerage Account

Post by goldy18 » Wed Jun 13, 2018 8:53 am

Jablean wrote:
Tue Jun 12, 2018 2:25 pm
2. Take distribution from traditional IRA (2%) - transfer monies to settlement account and buy more Wellington fund to make it eligible for admiral shares (I have sentimental attachment to Wellington but would a different fund be more appropriate?)
Buy more Wellington fund where? I only see it in your inherited IRA and you can't buy more there.
What I meant was: take distribution from inherited IRA (all 2% of Wellington) and take distribution from traditional IRA (2%) and purchase shares of Wellington in new Vanguard brokerage account. Is that a sensible fund for me to hold in brokerage account? After I take care of my RMD's, I would then figure out which American funds I could sell in order to purchase (which?) Vanguard funds.

Thank you. Goldy

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