Better late than never

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Better late than never

Post by serlvz » Wed Jun 13, 2018 6:47 pm

Hello, My name is Scott. I just turned 61, and for reasons that no longer apply I squandered much of my earnings through the years. I so wish it wasn't so, but it is reality. I certainly crippled myself by doing so, but it is what it is.

So, I start from this point forward. I want to invest and make the most of my cash and income, for whatever days I have left.

I am single with no wife, no ex-wife and no kids, no ex-kids.

I have a fixed annual income from a gov't pension (CSRS) of roughly $31,300, as well as a small fixed military disability retirement of $6,100 annual. That is a laying-in-bed income of $37,400. I retired from that gov't job on 1/31/2014.
I am working in a second career, having started in late Dec. 2014. It consumes 950-1250 hours/yr. It pays me 38-43K a year. I am an on call employee at various companies, as dispatched by my union. I plan on working at this for another five years or so at which time I will slow way down to where I either no longer work or, possibly, work roughly 500 hours/year.
At that point I should start receiving another pension of 8,500 to 11,000/year.
As a recipient of a gov't pension I am not eligible for normal Social Security, having not paid into it for those 30 or so years that I paid into the CSRS. However, I will be eligible for, what I believe is called, Social Security offset. I've computed it on the SS website, and it comes to $279/month ( 3348/yr ) at 62, or 479/month (5748/yr ) at 65.5. I am leaning on collecting the earlier, lesser amount as it would take me until past 70 y.o to recoup the money of not having started early. It is kind of counter intuitive to me in a way, as obviously, I like bigger numbers. But seeing as my Dad died at 75 and my Mom at 71, I'm not really sure how long I'll live.

Although my health is fairly robust, I am a cancer survivor. I had bladder cancer surgery in Aug. of 2009, but have had clean checkups ( no sign of cancer ) since that time. Almost nine years, now. Thank God.

I'm thinking I'll end up with an annual "retired" income of roughly 50K. However, as long as my health is good, I'll probably work 500/hrs a year after my retirement. For cash flow and to have earned income for investing purposes.

Some other info, Other than a $515/month mortgage payment (total, including taxes and insurance ) on a 74,000 balance ( theoretical value of house is 225K, at least according to Zillow ), I have no debt. I pay off credit cards, in full monthly. I have a late model car which I like a lot and plan on holding for as long as I can. I paid off the car last January.

The cash is starting to pile up. And I need to figure out the best way to deal with it.

Currently, I have 3K+ in one CD, and 4K+ in another. I also have 22K plus in a "high yield" savings acct ( 1.75% ), a grand or so in my credit union's MM savings acct and 3 or 4 grand in checking.

So, 32-33K, all in "cash". I am not eligible for a 401K as I'm not a regular employee of any one company.

I can't reduce my income enough by a regular IRA to get me into a different tax bracket. So, what I plan on doing is to open a Roth IRA, so as to let my money grow tax-free.
I've been reading some books on investing, having just finished Bogle's Little Book of Common Sense Investing, and Andrew Tobias's The Only Book You'll Ever Need... ( or whatever it is called; it's back in the library now ). I am in the process of reading The Richest Man in Babylon, as well as Your Money or Your Life. I'm getting book educated quickly, but have zero experience. I have three or four others that will be next.

I am anxious to get started, but know I cannot make up for all the wasted years. What I don't want to do is make a major misstep right off the bat.

Although I am convinced that a low cost, low fee index based fund is my best bet, I am a little wary of the Market, as a whole, at this point. It would seem as if it is due for a major correction. What I'm fearful of is, dumping 6,500 in a fund, with another 6,500 next year, only to have the market have a strong downturn shortly after.

Sitting on the sidelines is probably not a good idea. But where/how to start?
My thought is to get into a Vanguard fund that is weighted conservatively towards bonds ( though I'd really like to be able to let the money grow faster ). I could change the asset allocation later.


Is there anyone in here who'd like to offer some solid advice?


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Re: Better late than never

Post by dandinsac » Wed Jun 13, 2018 7:30 pm


Welcome to the forum! I don't know a lot about the social security offset program, but if you can get more by waiting, then that would be the best way to go. For example, for the next 4 years, you could save at least $26,000 in Roth IRAs, and you'll be 65. If at that point, you stop working, you can withdraw at least $200 / month for the next 10-11 years. AND, most importantly, since you delayed the social security, you get the extra $200 from it as well. Since your cash is "piling up", that doesn't seem to be too tough of a go.

If your 500 hours per year continues from 65-70, you may be able to delay social security even a bit longer. My rule of thumb is to get pensions or social security whenever they max out, but not sooner. If you have income from working a bit, that makes it really easy.

To get started, I would start a conservative balanced fund at the minimum needed and then automatically add so much per week until you have maxed it out for the year. (If you are using Vanguard, they will calculate the maximum for you.) Next year the withdrawals will change to reflect the new maximum. (It is $6500 in 2018 for those of us over 50.)

Then forget about it until you turn 65. Once you get to be 65, you will have another decision to delay even longer to a higher age.

Good Luck,


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Taylor Larimore
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Re: Better late than never

Post by Taylor Larimore » Wed Jun 13, 2018 7:33 pm


Welcome to the Bogleheads Forum!

You have read one of the best books on investing ever written: Jack Bogle's The Little Book of Common Sense Investing. You have no need to read further (including my book coming out this month).

These are Books I have read.

You may find that this portfolio is what you want:

The Three-Fund Portfolio.

This is the portfolio I would own if I could start over.

Best wishes.
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Better late than never

Post by sschullo » Wed Jun 13, 2018 8:13 pm

Take a look at Vanguard's Wellesley (It might be closed to new investors). Since you relatively risk adverse but open to suggestions, this fund is already balanced between stocks and bonds and appropriate for people our age. I am 70. I own this fund which holds about 12.5% of my entire portfolio. Wellesley has 35% stocks and 65% bonds.

BTW I am no stranger to starting late. While I remained frugal all of my life because I did not make much money, I do have a pension and had a spouse for 40 years (until his death 2.5 years ago), and together we saved a ton.

I did not know investing the boglehead way until my middle 50s after losing a bundle in the Tech bubble disaster.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Better late than never

Post by serlvz » Thu Jun 14, 2018 2:40 am

Thanks all, for the help thus far. I have set up a Vanguard brokerage account with plans to set up a Roth IRA.

A big question for me is, can I switch plans w/o a cost penalty ( other than slight differences in fees ), providing I do so within the IRA.

For instance, I am leaning towards the Vanguard LifeStrategy Moderate Growth Fund (VSMGX). At some point I may wish to switch to a more, or less, aggressive fund. Would there be a "penalty" in costs?

Furthermore, at some point I may wish to move to a highly suggested 3 fund approach, once my capital outside of the IRA increases and I start to have taxable investments.

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Re: Better late than never

Post by craimund » Thu Jun 14, 2018 3:34 am

You can switch funds within your Vanguard IRA without incurring any costs unless the fund you are selling has a redemption fee. Most Vanguard funds do not have redemption fees. See link below for those that do.

Are you an independent contractor with 1099 income? If so, you can set up an individual or solo 401k and make pretax or ROTH contributions (up to $24,500.00/year for those over 50). Can also make "employer" contributions to a solo 401K up to almost 20% of your 1099 income.

Best of luck.
"When you ain't got nothing, you got nothing to lose"-Bob Dylan 1965. "When you think that you've lost everything, you find out you can always lose a little more"-Dylan 1997

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Re: Better late than never

Post by serlvz » Fri Jun 15, 2018 7:07 pm

Thank you on the best wishes. :) I am not an independent contractor. I retired from the USPS a few years back.
Now, I am a Teamster journeyman in the convention industry in Las Vegas. As such, I work for several different companies depending on the job dispatches I get. Kind of a free agent in that if I don't want to work ( after a layoff ), then I don't sign in onto the out-of-work list.

I usually work for one of the two large general contractors, but am not a regular employee. I'm only an employee of a company, as long as the dispatch is. I need to look into if they have a 401K available, but I imagine that may be only for the "regular" employees. But who knows, I might be pleasantly surprised. Doesn't hurt to look. It would be nice to be able to contribute to an additional tax advantaged investment account.

Speaking of which, I opened my first investment account. It is with Vanguard. It is in an all-in-one type account. Went conservative, at least for now. with a 40% stock, 60% bond allocation. These are in 4 total market indexes. $42% Total Domestic Bond index, 18% Int'l Bond Market and a 24.5 Total domestic, 15.5 Int'l Total stock index.

Once money starts piling up, as I invest more over time, I will be going to a three fund portfolio.
I like the simplicity of the one fund, for now.

I am excited I finally did this. Have never owned an IRA or dealt w stocks or bonds, before, other than in a TSP for a while I was with the Post Office. Glad to be on the road, finally.

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Re: Better late than never

Post by livesoft » Fri Jun 15, 2018 7:20 pm

Just read this and wanted to say that this thread is Inspirational! Good luck @serlvz! You are on your way again. :sharebeer
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