Looking for Advise

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Topic Author
ssc45
Posts: 3
Joined: Sat Jan 12, 2019 9:19 pm

Looking for Advise

Post by ssc45 » Sat Jan 12, 2019 11:18 pm

I have read many of the threads and just joined. Due to various family and myself having health issues over the past couple of years, I have not concentrated on my portfolio. Hence, I am considering various options and do appreciate any advise.

Emergency Funds: I have this handled, but the funds are in saving accounts that pay very minimal interest. $90,000.

Debt: I have two homes with mortgages that are minimal but they both have substantial equity;
Very minimal debt. Four vehicles, two are paid for. My Office vehicle is one of the vehicles I owe. The other vehicle will be paid off soon.
Tax Status: MFJ
Currently a resident of CA, but intend on moving to our AZ Home full time. The intention is to retire and sell the CA house and pay off the AZ home and have an additional $400,000 in cash to invest. Age 58. Wife does not work and is 64. She recently signed up for her SS.

I have a high allocation in stock.

The majority of my holdings are in USAA. I do have a wealth manager due to the size of my portfolio, who has prepared a suggested AUM proposal. Currently, I am not in their AUM.

I have a SEP in the USCRX, cornerstone fund with approximately $900,000. The fees are high and the returns low. I still contribute $3,500 to $4,500 per month. I have approx $90,000 in the USAA S&P fund. (post Tax) I have post tax $90,000 in American century TWCUX. I have a brokerage account with USAA with individual stocks of approx $900,000.

Questions: 1. I know I need to do some diversifying. Especially with the SEP. The options I have considered are going with the USAA AUM program. My wealth manager is nice and available and they have great customer service. As said though, their fees are high. Option 2 is to open a Vanguard account and use the PAS or possibly just pick funds and do it myself. Option 3 is to move my account to MS with a FA who some of my friends utilize and have been happy with. Again, this has high fees.

I would appreciate input respecting the situation with the goal of retirement at the end of 2019.If you were going to use Vanguard, how would you structure the portfolio? I own my own business and am structuring a buy out.However, I want to structure retirement with the understanding that the buy out may not pay out as contracted, so as to cover all bases. The monthly payment would be $5,000 for 5 years. The wife's SS would be approximately $1,000 per month and our Dividends and capital gains average $60,000.

Regards, SSC

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Watty
Posts: 16861
Joined: Wed Oct 10, 2007 3:55 pm

Re: Looking for Advise

Post by Watty » Sun Jan 13, 2019 1:15 am

ssc45 wrote:
Sat Jan 12, 2019 11:18 pm
Option 2 is to open a Vanguard account and use the PAS or possibly just pick funds and do it myself.
That is what I would suggest, one you could use PAS for a year or two then start managing it yourself when your situation is cleaned up.

ssc45 wrote:
Sat Jan 12, 2019 11:18 pm
Emergency Funds: I have this handled, but the funds are in saving accounts that pay very minimal interest. $90,000.

Debt: I have two homes with mortgages that are minimal but they both have substantial equity;
Very minimal debt. Four vehicles, two are paid for. My Office vehicle is one of the vehicles I owe. The other vehicle will be paid off soon.
Unless there is something else that money is earmarked for then why not use maybe $50K of it to pay off some of your debt that is at a higher interest rate.
ssc45 wrote:
Sat Jan 12, 2019 11:18 pm
I have a brokerage account with USAA with individual stocks of approx $900,000.
If that means something like nine stocks with $100K in each stock that is a big diversification problems. You need to figure out the tax issues but I would take a hard look at selling those and buying a more diversified index fund.

Topic Author
ssc45
Posts: 3
Joined: Sat Jan 12, 2019 9:19 pm

Re: Looking for Advise

Post by ssc45 » Sun Jan 13, 2019 1:09 pm

Thank you Watty. I do appreciate the thoughts. I am leaning towards the Vanguard solution. I will be contacting them in the morning as well as my Wealth manager at USAA to ask about restructuring my Sep using vanguard or fidelity funds.

I feel more comfortable having the emergency cash on hand. I will pay off one of the cars in the next 6 months. It was purchased in late 17 with a 1.9% loan.

I have spoken to my acct about the stocks. The tax hit would be substantial. I will have to wait until I retire, if I understand correctly. I am currently in a high tax bracket.

Regards, SSC

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Alexa9
Posts: 1872
Joined: Tue Aug 30, 2016 9:41 am

Re: Looking for Advise

Post by Alexa9 » Sun Jan 13, 2019 1:16 pm

By all means, don't pay someone for AUM! It's not rocket science. However, certain other parts of insurance/social security/financial/tax/estate planning may be worth consulting someone for an hourly fee if you have a complicated situation.

https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Three-fund_portfolio
https://www.bogleheads.org/wiki/Vanguar ... tegy_Funds

Topic Author
ssc45
Posts: 3
Joined: Sat Jan 12, 2019 9:19 pm

Re: Looking for Advise

Post by ssc45 » Sun Jan 13, 2019 11:28 pm

Thank you Alexa. I have read the threads and they are helpful.

Regards, SSC

User avatar
BL
Posts: 9069
Joined: Sun Mar 01, 2009 2:28 pm

Re: Looking for Advise

Post by BL » Mon Jan 14, 2019 2:48 am

Also suggest you pick up Jane Bryant Quinn's book, "How to Make Your Money Last" and keep it on hand for a reference to any particular issue. Be sure your spouse is also keeping up on this. Jane has been writing articles in magazines now including AARP, and I saw her books in the library over the
years.

If you pay an advisor 1%, withdraw 4%/year, advisor gets 25% of your safe withdrawal amount. They are not the ones taking the risk.

V PAS would advise for 0.3% and put you in funds averaging under 0.1%; hard to get that with any other adviser.

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