Passive investment help before I meet with Fidelity FA this week.

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
vipertom1970
Posts: 17
Joined: Fri Jun 21, 2019 7:06 pm

Passive investment help before I meet with Fidelity FA this week.

Post by vipertom1970 » Sun Jun 23, 2019 4:57 pm

First post, ready to learn and just want to simplify my overall investment with as low fees as possible !

I am new to passive investing and ready to retire at 50 July 4th, 2019. I just sold 30 individual stocks and moved most of my $$ to FIDO becasue it was difficult {edit Moderator Jbranx} to keep an eye for 30 stocks. I like to roll over my 401k from Jonh Hancocks to FIDO and eventually move all my $$$ to Fidelity. Since I don't need more income then should I invest for growth ? I am looking at Fidelity ZERO but not sure how I structure my asset allocation.

Goal: to simplify my over all investments and enjoy life
Age:50
debt: ZERO
yearly exspense: $60,000 per year
Passive income: $60,000 per year(rental proterties, no mortgage)
Fidelity Roth: $165,000 (80% Fidelity Zero Total Market and 20% Fidelity)
Fidelity Brokerage: $1,000,000(sold 30+ individual stocks)
Hanckocks 401K: $1,400,000(multiple mutual funds)
Muni bonds: $600,000($25,000 per year)

Total:$3,165,000

retiredjg
Posts: 36739
Joined: Thu Jan 10, 2008 12:56 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by retiredjg » Sun Jun 23, 2019 5:41 pm

vipertom1970 wrote:
Sun Jun 23, 2019 4:57 pm
First post, ready to learn and just want to simplify my overall investment with as low fees as possible !

I am new to passive investing and ready to retire at 50 July 4th, 2019. I just sold 30 individual stocks and moved most of my $$ to FIDO becasue it was difficult {edit Moderator Jbranx} to keep an eye for 30 stocks. I like to roll over my 401k from Jonh Hancocks to FIDO and eventually move all my $$$ to Fidelity. Since I don't need more income then should I invest for growth ? I am looking at Fidelity ZERO but not sure how I structure my asset allocation.

Goal: to simplify my over all investments and enjoy life
Age:50
debt: ZERO
yearly exspense: $60,000 per year
Passive income: $60,000 per year(rental proterties, no mortgage)
Fidelity Roth: $165,000 (80% Fidelity Zero Total Market and 20% Fidelity)
Fidelity Brokerage: $1,000,000(sold 30+ individual stocks)
Hanckocks 401K: $1,400,000(multiple mutual funds)
Muni bonds: $600,000($25,000 per year)

Total:$3,165,000
Welcome to the forum. :happy

You probably need to post your information in the format we use to help people with their portfolio question. See the link below.

retiredjg
Posts: 36739
Joined: Thu Jan 10, 2008 12:56 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by retiredjg » Sun Jun 23, 2019 5:46 pm

PS. Don't be too eager to sign up with any type of assets under management agreement with the financial advisor. People here can help you with your portfolio.

HomeStretch
Posts: 740
Joined: Thu Dec 27, 2018 3:06 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by HomeStretch » Sun Jun 23, 2019 5:59 pm

+1.

I suggest you update your post to add the requested information to get feedback on your portfolio before your meeting. Update again after your meeting to get feedback on the Fidelity advisor’s suggestions before committing to any suggested changes.

Advisors’ suggestions can sometimes be costly and more in the advisor’s best (financial) interest than yours. Be extra cautious if you receive advice from the advisor to use advisor services to manage your accounts for a fee, or to use high-fee actively managed funds, or to invest in annuities, or to rollover your Hancock 401k to a Fidelity advisor-managed IRA, or ....

User avatar
Taylor Larimore
Advisory Board
Posts: 28387
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Passive investment help before I meet with Fidelity FA this week.

Post by Taylor Larimore » Sun Jun 23, 2019 6:02 pm

vipertom1970:

Welcome to the Bogleheads Forum!

Fidelity is a good for-profit company. You must be careful to keep your portfolio as inexpensive and simple as possible. Fidelity has excellent, zero fee, total market index funds (recommended by Jack Bogle). Be wary of expensive, complicated recommendations.

It might be a good idea to run Fidelity's recommended portfolio by us. You are sure to receive comments which will be helpful for your final decision.

One portfolio you should consider is my favorite Three-Fund Portfolio which you can probably manage yourself. This is a link to its many benefits:

The Three-Fund Portfolio

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

Topic Author
vipertom1970
Posts: 17
Joined: Fri Jun 21, 2019 7:06 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by vipertom1970 » Fri Jul 12, 2019 12:05 am

Finally have time to list what I got accordingly.


Emergency funds: $120,000( 2 years)

Debt: zero and no mortgage

Tax Filing Status: married file jointly

Tax Rate: 22%

State of Residence: CA

Age: wife 50/ me 50(just retired), daughter is on her own.

Desired Asset allocation: 60% stocks / 40% bonds
Desired International allocation: 20% of stocks
Passive Income for 2020: $60,000 from building rentals

Profolio (Roth, TIRA, Roll-over IRA, Brokerage) : $3,113,000

Current retirement assets not including real state: $3,113,000

Taxable
Cash:(emergency funds): $120,000
Fidelity ZERO Total market(Fzrox-0 expense ratio): $550,000
Fidelity Zero international(FZILX-0 expense ratio) :$149,000
Microsoft(MSFT):$176,000
Amazon: $16,000
Fidelity US Bond(FXNAX): $267,000
40 muni bonds: $622,000


His Roth IRA at Fidelity:
Fidelity ZERO Total market(Fzrox-0 expense ratio)$74,000
Fidelity Zero international(FZILX-0 expense ratio)$14,000


His Rollover IRA to Fidelity form 401K(will be funded next week)
Cash: $1,050,000


Her Roth IRA at Fidelity
Fidelity ZERO Total market(Fzrox-0 expense ratio): $60,000
Fidelity Zero international(FZILX-0 expense ratio):$15,000



_____________________________________________________________________________
New annual Contributions: ZERO

Questions:
1. Like to keep to just a 3 fund Portfolio with allocation 60% Equities(80% US and 20 % international), 40% bond. How should I invest the $1,050,000 roll over IRA where I have the most tax efficient benefit ?

2. I know Fidelity Zero is new, I am little nervous to sink so much $$ in it and looking for alternative Fidelity funds.

3. Market is all time high, should I go in slowly or go for one shot ?

4. Should I over weight bond fund in the Roll over IRA ?

5. What account do I use to rebalance the over all portfolio( I assume the IRA account)

6. When should I start to do a Roth Conversion from my TIRA account ? next 10 years ???



I am here to learn about asset location and the important of rebalancing yearly. I was 100% in equities mostly stocks the last 24 years until beginning of 2019 and just retired this month.

thank you

bltn
Posts: 443
Joined: Mon Feb 20, 2017 9:32 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by bltn » Fri Jul 12, 2019 5:23 am

My simple rule for tax efficient investment is:
1. Fixed income investment in the tax deferred accounts.
2.Equity investments in the form of (tax efficient) index funds in the taxable accounts.
3. More aggressive investment, equities, in the Roth IRA.
It seems as though you ll be ok with your retirement plans.

I would set an asset allocation at 50-60% equities, 25-35% bonds, 15% liquid fixed income. I would feel safe during a market downturn with this kind of cushion .

student
Posts: 3381
Joined: Fri Apr 03, 2015 6:58 am

Re: Passive investment help before I meet with Fidelity FA this week.

Post by student » Fri Jul 12, 2019 6:01 am

vipertom1970 wrote:
Fri Jul 12, 2019 12:05 am
Questions:
1. Like to keep to just a 3 fund Portfolio with allocation 60% Equities(80% US and 20 % international), 40% bond. How should I invest the $1,050,000 roll over IRA where I have the most tax efficient benefit ?

2. I know Fidelity Zero is new, I am little nervous to sink so much $$ in it and looking for alternative Fidelity funds.

3. Market is all time high, should I go in slowly or go for one shot ?

4. Should I over weight bond fund in the Roll over IRA ?

5. What account do I use to rebalance the over all portfolio( I assume the IRA account)

6. When should I start to do a Roth Conversion from my TIRA account ? next 10 years ???
thank you
1) I suggest you take at look at wiki page https://www.bogleheads.org/wiki/Tax-eff ... _placement
2) I would not worry about it. I think Fidelity Zero is fine.
3) Research shows that one shot is best but for psychological reasons, I would DCA into it over 1 to 2 years.
4) This is related to 1)
5) I think this is a good idea, if there is room, since there are no tax consequences.
6) No idea.

retiredjg
Posts: 36739
Joined: Thu Jan 10, 2008 12:56 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by retiredjg » Fri Jul 12, 2019 6:20 am

vipertom1970 wrote:
Fri Jul 12, 2019 12:05 am
1. Like to keep to just a 3 fund Portfolio with allocation 60% Equities(80% US and 20 % international), 40% bond. How should I invest the $1,050,000 roll over IRA where I have the most tax efficient benefit ?
Tax-efficiency usually applies to what you put in your taxable account. What you have there is probably fine. We need to know more about the 40 muni bonds. Are they CA bonds?

2. I know Fidelity Zero is new, I am little nervous to sink so much $$ in it and looking for alternative Fidelity funds.
In the rollover IRA, I suggest that you do not use the exact same funds that you have in taxable. Consider Fidelity Total Stock Index and Fidelity Total International Index and Fidelity Total Bond Index. I suggest the same for your Roth IRAs too.

3. Market is all time high, should I go in slowly or go for one shot ?
You should look at this as a sideways move of money that is already in the market (unless your 401k was in cash). Put it all in now. Leaving your money out of the market in order to wade back in is a poor choice in my opinion.

4. Should I over weight bond fund in the Roll over IRA ?
Put enough in bonds to reach your goal of 40% in the portfolio. If you need help with that, just ask.

5. What account do I use to rebalance the over all portfolio( I assume the IRA account)
Probably.

6. When should I start to do a Roth Conversion from my TIRA account ? next 10 years ???
You can start now if you want.

Topic Author
vipertom1970
Posts: 17
Joined: Fri Jun 21, 2019 7:06 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by vipertom1970 » Sat Jul 13, 2019 11:32 pm

2. I know Fidelity Zero is new, I am little nervous to sink so much $$ in it and looking for alternative Fidelity funds.
In the rollover IRA, I suggest that you do not use the exact same funds that you have in taxable. Consider Fidelity Total Stock Index and Fidelity Total International Index and Fidelity Total Bond Index. I suggest the same for your Roth IRAs too.




are these the right funds and it's the same as the Fidelity ZERO ? Since I got a chunk in Fidelity Zero I don't mind the little ER for established equal funds.

FSKAX=FZROX
FTIHX=FZILX

retiredjg
Posts: 36739
Joined: Thu Jan 10, 2008 12:56 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by retiredjg » Sun Jul 14, 2019 6:33 am

Yes, those are the ones. And I gave the wrong name to their total bond index fund which is callee Fidelity® US Bond Index Fund ( FXNAX ).

Topic Author
vipertom1970
Posts: 17
Joined: Fri Jun 21, 2019 7:06 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by vipertom1970 » Tue Jul 16, 2019 10:32 am

My rollover IRA is 100% funded this morning and sitting on 1 mill cash. My allocation is 60/40, should I go in slowly or do a small chunk the next couple months ? I have been very disciplined the last 25 years with my investments but I never had 1mil one time so the nervous level is 1000% higher specially with the all time high market.

User avatar
nedsaid
Posts: 11801
Joined: Fri Nov 23, 2012 12:33 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by nedsaid » Tue Jul 16, 2019 10:52 am

Taylor Larimore wrote:
Sun Jun 23, 2019 6:02 pm
vipertom1970:

Welcome to the Bogleheads Forum!

Fidelity is a good for-profit company. You must be careful to keep your portfolio as inexpensive and simple as possible. Fidelity has excellent, zero fee, total market index funds (recommended by Jack Bogle). Be wary of expensive, complicated recommendations.

It might be a good idea to run Fidelity's recommended portfolio by us. You are sure to receive comments which will be helpful for your final decision.

One portfolio you should consider is my favorite Three-Fund Portfolio which you can probably manage yourself. This is a link to its many benefits:

The Three-Fund Portfolio

Best wishes
Taylor
I do second what Taylor has said here. I visited with a Fidelity advisor back in December. I have a substantial part of my retirement at Fidelity and you will likely get a gentle pitch for an advisory service, I did. I also got a gentle pitch for an annuity, but in fairness I had shown some interest. Also had recently moved a Variable Annuity to Fidelity. The advisor surprisingly mentioned the Fidelity Zero funds. So you will get a nudge but not high pressure. I think you will find your visit to be enjoyable and informative.

My portfolio at Fidelity is mostly their index funds. I own three ETFs there, two are iShares ETFs and the other Wisdom Tree. I bought everything with no fee except the Wisdom Tree ETF which had a $4.95 commission. I also own two active funds with them, their Ginnie Mae fund (bonds) and their International Small-Cap Fund. Last I looked, my expense ratio there was 0.13%.

Great suggestion by Taylor to have us look at your recommended portfolio.
A fool and his money are good for business.

dbr
Posts: 29417
Joined: Sun Mar 04, 2007 9:50 am

Re: Passive investment help before I meet with Fidelity FA this week.

Post by dbr » Tue Jul 16, 2019 10:57 am

It is definitely possible to come out of a conversation with Fidelity both signed up to pay a fee for advising and to put your money in higher cost funds. It is also possible to come out of that conversation doing neither of those things. Caveat Emptor.

User avatar
nedsaid
Posts: 11801
Joined: Fri Nov 23, 2012 12:33 pm

Re: Passive investment help before I meet with Fidelity FA this week.

Post by nedsaid » Tue Jul 16, 2019 11:29 am

I know this is a minority opinion here but remember to be a good customer too. Many folks here are for the very lowest costs no matter what. Keep in mind that the folks at Fidelity need to eat too and that the Zero products are loss leaders for them. I think of folks who shop at Wal-Mart and have literally shopped away their own jobs.

No reason for you to buy expensive products from Fidelity. You don't need expensive Wealth Management services. If you need help constructing a portfolio, you could use the Fidelity Go service which is run by robots and your all in costs are 0.35%. If you choose your own funds, you should aim to keep your costs below that, you could probably get them down to 0.05% or so. I would aim to get your all-in costs to about 0.10% to 0.15% but certainly at or below the 0.35% mentioned above.

What I would say is don't be afraid to let Fidelity make a little money off of you. Something has to pay for the excellent customer service, their website, the advisors, and the local investor offices. I think of all the folks here who complain about customer service at Vanguard and yet want rock bottom expenses. They can't see the connection.
A fool and his money are good for business.

Post Reply