Sell it all

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videocrafters
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Sell it all

Post by videocrafters » Wed Oct 10, 2018 7:40 pm

I am a few months away from 70 years old at which time I will retire. I have been self-employed and have managed my own pension accounts.

1 - SEP IRA
Husband & wife IRA's
Husband and wife Roth

My accounts are a mess. Not much in the way of rhyme or reason, but have done well. It is time to put on my big boy pants and set up my accounts to last us the rest of our lives. I have read about the lazy portfolio with 3 funds, I like this idea. It is simple and something I can deal with.

Here is what I currently own: BND, VOO, VTI, FSPHX, POAGX, SEQUX, SWPPX, VASVX, VBMFX, VDIGX, VFINX, VSIAX, VTSMX, VTTVX, VTWNX, VWELX, YACHX

So what i am thinking of doing is selling everything and buying the 3 funds.

VTSAX
VBTLX
VTIAX

i understand that the next issue is what percentage to put in each fund, but that is a question for another post. My question now is does selling everything at once to reinvest in a different style of investing make sense or am i missing something?

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Dale_G
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Location: Central Florida - on the grown up side of 81

Re: Sell it all

Post by Dale_G » Wed Oct 10, 2018 8:17 pm

It makes perfect sense. And be sure to make "exchanges" into the new funds so you remain fully invested.

I am sure you won't be guilty, but some people sell the current funds and go to cash. Then ..... well, maybe it takes a very long time for the money to get back into the market.

Dale
Volatility is my friend

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Duckie
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Re: Sell it all

Post by Duckie » Wed Oct 10, 2018 8:18 pm

videocrafters, welcome to the forum.
videocrafters wrote:My question now is does selling everything at once to reinvest in a different style of investing make sense or am i missing something?
Simplifying does make sense and you are not missing anything. Combine the SEP IRA with one of the TIRAs to reduce the number of accounts and put the bonds in the pre-tax accounts so that the Roth IRAs can be all stocks.

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GerryL
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Re: Sell it all

Post by GerryL » Wed Oct 10, 2018 8:20 pm

If all of the investments are in retirement accounts (meaning the transactions would not be taxable events) it would be simpler to make the moves all at once. Sort of like rebalancing. Just make sure to check the dividend schedule so you don't execute any of the transactions just as dividends are about to be paid out.

Question: Are all these funds held at the same place? The place where you intend to set up your 3-fund portfolio? If they are at different brokerages, this may add some nuance to the answer.

Does anyone have any input as to why once-and-done would be a bad idea?

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Watty
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Re: Sell it all

Post by Watty » Wed Oct 10, 2018 8:35 pm

Dale_G wrote:
Wed Oct 10, 2018 8:17 pm
It makes perfect sense. And be sure to make "exchanges" into the new funds so you remain fully invested.

I am sure you won't be guilty, but some people sell the current funds and go to cash. Then ..... well, maybe it takes a very long time for the money to get back into the market.

Dale
+1

You might just put it into a low cost target date fund that will set the allocation and rebalance automatically.

hesson11
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Re: Sell it all

Post by hesson11 » Thu Oct 11, 2018 8:44 pm

As GerryL suggested, don't we need to know the tax consequences of making this move before offering advice? Or did I miss something? (Not trying to be a smart aleck; I'm just not as sophisticated as most BHeads and want to know.)

delamer
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Re: Sell it all

Post by delamer » Thu Oct 11, 2018 8:49 pm

hesson11 wrote:
Thu Oct 11, 2018 8:44 pm
As GerryL suggested, don't we need to know the tax consequences of making this move before offering advice? Or did I miss something? (Not trying to be a smart aleck; I'm just not as sophisticated as most BHeads and want to know.)
The OP said there were 5 accounts, all tax-advantaged:

1 SEP-IRA
2 Traditional IRAs
2 Roth IRAs

So there are no tax consequences to selling and buying within each account.

MotoTrojan
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Re: Sell it all

Post by MotoTrojan » Thu Oct 11, 2018 8:58 pm

Dale_G wrote:
Wed Oct 10, 2018 8:17 pm
It makes perfect sense. And be sure to make "exchanges" into the new funds so you remain fully invested.

I am sure you won't be guilty, but some people sell the current funds and go to cash. Then ..... well, maybe it takes a very long time for the money to get back into the market.

Dale
For your ETFs (the 3 letter long holdings) you will not be able to use the exchange function. For these I would plan to sell them in the afternoon, perhaps with 10-60 minutes left in the trading day. Once you know how much you made in the sale, you can purchase that much of any of your 3 funds.

May be worth starting with smaller transactions or spreading this process out over a few days just to prevent any costly mistakes.

I also agree with others that a Target Retirement or Lifestrategy fund may make a lot of sense as all of your holdings are tax-advantaged and then you can simply withdraw from that fund as you please, and focus more on deciding whether to take from pre-tax tIRA or Roth holdings. Only reason you wouldn't take this approach is if you can't find a fund that meets your desired asset allocation, which is frequently a result of not wanting the ~40% International equity ratio that many funds have now.

videocrafters
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Re: Sell it all

Post by videocrafters » Thu Oct 11, 2018 9:38 pm

The problem with target funds as I see it is they don’t allow me to have a bucket approach to my allocations from more conservative to more risky.

Lafder
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Re: Sell it all

Post by Lafder » Sat Oct 13, 2018 10:23 am

oops duplicate
Last edited by Lafder on Sat Oct 13, 2018 1:16 pm, edited 1 time in total.

Lafder
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Re: Sell it all

Post by Lafder » Sat Oct 13, 2018 10:24 am

Target funds such as Vanguard's target date retirement funds or their Life Strategy funds come in varying asset allocations from aggressive (Life Strategy Growth, or a many years from now retirement date) to conservative (Life Strategy Retirement, or a current retirement date fund).

The advantage to all in one funds is that they rebalance for you and you only have to choose to invest or withdraw, not which category of holding. But they do not allowed the more detailed fine tuning of choosing to sell just bonds or just stocks.

These all in one funds are funds of funds made up of (usually with Vanguard) 4 mutual funds in varying asset allocations. You can also hold the subfunds yourself.

lafder

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CABob
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Re: Sell it all

Post by CABob » Sat Oct 13, 2018 10:32 am

videocrafters wrote:
Thu Oct 11, 2018 9:38 pm
The problem with target funds as I see it is they don’t allow me to have a bucket approach to my allocations from more conservative to more risky.
You could have a "mental" buckets with your overall allocations reflecting the issues of risk, goals, etc.
Bob

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