Got more than enough for retirement. What to do now?

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Sleepless
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Got more than enough for retirement. What to do now?

Post by Sleepless » Thu Jul 04, 2019 5:02 am

My spouse and I have accumulated a very nice sum. Almost all of it is in ETFs, and also some cash. We live a modest, middle class life. We can conveniently and safely retire now (although we plan to keep on working). We have about 3x the amount that we need for retirement according to the various calculators.

We want minimum risk from now on.

What would be the safest thing to do with our money?
I was tired yesterday and I'm tired again today. I'm retired.

RobLyons
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Re: Got more than enough for retirement. What to do now?

Post by RobLyons » Thu Jul 04, 2019 5:11 am

CDs, high interest savings accounts, lend or gift it to fellow BHs :D
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bltn
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Re: Got more than enough for retirement. What to do now?

Post by bltn » Thu Jul 04, 2019 5:30 am

In your position, I would keep working if I liked my job. More accumulation would allow us to safely enjoy a nicer lifestyle in the future.
I would balance my current savings between safety and growth . For me that would mean an allocation of 50/35/15. I could sleep at night with that allocation, regardless of a market correction.

Call_Me_Op
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Re: Got more than enough for retirement. What to do now?

Post by Call_Me_Op » Thu Jul 04, 2019 5:43 am

Depends. Do you have heirs to whom you wish to leave a lot of money?
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midareff
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Re: Got more than enough for retirement. What to do now?

Post by midareff » Thu Jul 04, 2019 5:54 am

At three times projected needs and the desire to be conservative ... 1/3 would fit nicely into a TIPS ladder providing inflation security, 1/3 in a mix of intermediate term treasuries and CDs for liquidity protection and the remaining 1/3 in diversified equities such as the Total Stock Market or S&P500 with or without a touch of Total International. That last third providing some growth possibilities. I think the entire concept of don't risk what you do have and do need to make more that you don't need or can't spend is perfectly logical.

There are annuities both with and without inflation adjustments but that (IMHO) is just giving your money to someone and hoping they give it back later.
Last edited by midareff on Thu Jul 04, 2019 5:57 am, edited 1 time in total.

GoldenFinch
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Re: Got more than enough for retirement. What to do now?

Post by GoldenFinch » Thu Jul 04, 2019 5:57 am

I would have a 50/50 stock/bond allocation and set it and forget it.

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welderwannabe
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Re: Got more than enough for retirement. What to do now?

Post by welderwannabe » Thu Jul 04, 2019 6:30 am

GoldenFinch wrote:
Thu Jul 04, 2019 5:57 am
I would have a 50/50 stock/bond allocation and set it and forget it.
+1, or possibly a 40/60 portfolio. At vanguard Vanguard LifeStrategy Conservative Growth Fund (VSCGX) would be a simple choice.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

lakpr
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Re: Got more than enough for retirement. What to do now?

Post by lakpr » Thu Jul 04, 2019 6:47 am

welderwannabe wrote:
Thu Jul 04, 2019 6:30 am
GoldenFinch wrote:
Thu Jul 04, 2019 5:57 am
I would have a 50/50 stock/bond allocation and set it and forget it.
+1, or possibly a 40/60 portfolio. At vanguard Vanguard LifeStrategy Conservative Growth Fund (VSCGX) would be a simple choice.
I like this approach better than midareff's, only because everything sits in ONE fund and withdrawals / RMDs to be considered from ONE fund. Simplicity. midareff's suggestion is essentially a 33:67 split of stocks to bonds; Life Strategy Conservative Growth is 40:60. Both close enough for the purposes of preserving the capital plus adding growth to counter inflation.

Wellesley Income fund is another suggestion I would throw in the mix, actively managed and has zero international equities or bonds, but had excellent results over the past decade and half, including 2008 crisis.

MathIsMyWayr
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Re: Got more than enough for retirement. What to do now?

Post by MathIsMyWayr » Thu Jul 04, 2019 6:51 am

Sleepless wrote:
Thu Jul 04, 2019 5:02 am
We have about 3x the amount that we need for retirement according to the various calculators.
Simple. Protect 1x and do whatever you like to do with the rest. 67/33? If equity drops by 50%, you still have 2x.

Rus In Urbe
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Re: Got more than enough for retirement. What to do now?

Post by Rus In Urbe » Thu Jul 04, 2019 7:01 am

We are in a similar situation. DH is retired and I'm pulling the trigger in December. We glide-pathed to an overall AA of 50/50 and created some "fail-safes" so that in the event of a catastrophic market downturn, we will be okay.

So, several years ago, we opened a DAF (Donor Advised Fund), which consolidates our philanthropy. I used Vanguard Charitable, which requires $25K to open it and the minimum gift to charities is $500, and this easily fit our giving profile. I understand that Fidelity has a more flexible one in terms of lower limits.

Of course, the DAF has the benefit of lowering your taxes too---especially under the new tax rules, if you are philanthropic enough. Our beneficiaries are taken care of and we won't be able to take it with us, so we may as well do some good since we can.

For more on "giving back" read about the life of John Bogle, and especially his book, "Enough." Food for thought.

Congratulations on your success! :beer

Rus
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Re: Got more than enough for retirement. What to do now?

Post by Longdog » Thu Jul 04, 2019 7:07 am

lakpr wrote:
Thu Jul 04, 2019 6:47 am
welderwannabe wrote:
Thu Jul 04, 2019 6:30 am
GoldenFinch wrote:
Thu Jul 04, 2019 5:57 am
I would have a 50/50 stock/bond allocation and set it and forget it.
+1, or possibly a 40/60 portfolio. At vanguard Vanguard LifeStrategy Conservative Growth Fund (VSCGX) would be a simple choice.
I like this approach better than midareff's, only because everything sits in ONE fund and withdrawals / RMDs to be considered from ONE fund. Simplicity. midareff's suggestion is essentially a 33:67 split of stocks to bonds; Life Strategy Conservative Growth is 40:60. Both close enough for the purposes of preserving the capital plus adding growth to counter inflation.

Wellesley Income fund is another suggestion I would throw in the mix, actively managed and has zero international equities or bonds, but had excellent results over the past decade and half, including 2008 crisis.
The OP did not state where the money resides (taxable accounts, pre-tax accounts, Roth accounts) so, while those are good funds, they may not be the best choices from a tax perspective. There's not enough information in the OPs original post to make specific recommendations.
Steve

gamboolman
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Re: Got more than enough for retirement. What to do now?

Post by gamboolman » Thu Jul 04, 2019 7:09 am

bltn wrote:
Thu Jul 04, 2019 5:30 am
In your position, I would keep working if I liked my job. More accumulation would allow us to safely enjoy a nicer lifestyle in the future.
I would balance my current savings between safety and growth . For me that would mean an allocation of 50/35/15. I could sleep at night with that allocation, regardless of a market correction.
What Bitn said

We are in a similar position to OP post and questions. Very relevant to us.

We are planning to retire at the end of the year. Having said that, I'm struggling with working until the end of May 2020 as the extra money will as discussed by others in the thread give us a extra cushion.

We are very cognizant of Sequence of Returns risk to the new/early retiree, especially after 2018. The year 2018 drove home the perspective of having ~3 years worth of living expenses readily available to ms gamboolgal and I. For us it was textbook real life example we lived thru of Sequence of Returns risk to the new/early retiree's portfolio. Right or wrong - we want and need the "sleep good at night monies" available.

We figure that we'll be able to weather 3 to 5 years of a rough patch and not gut our portfolio at our planned AA and amount of monies we will be starting out retirement with. We will cut back on expenses naturally if we get in a downturn / Bear market.

We're currently at 55/30/15 and 50/35/15 is our exact AA we are targeting for retirement.

We are planning to consolidate our Megacorp funds into our existing Vanguard accounts at retirement. We use the simple 3 Fund Portfolio and are pretty well the type to leave it alone.

We are currently at 55/30/15 but we're heavy in company stock and are planning to sell it over the next few months and put into the bond fund at Vanguard to get us to the target of 50/35/15.

As Bitn said, that AA is what we are most comfortable with for now. I'm sure we'll re-evaluate in retirment.

gamboolman...

Dandy
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Re: Got more than enough for retirement. What to do now?

Post by Dandy » Thu Jul 04, 2019 7:17 am

What I did was roughly follow Dr. Wm Bernstein's idea. He suggests putting 20-25 years worth of expected draw down dollars in "safe" products and then invest the rest anyway you want--even 100% equities.

For me I decided that made sense. So I used FDIC products, money markets and short term bonds which at the time was about 2/3 of my fixed income allocation. I decided to make it 22 years which at that time took me to age 90. My overall allocation is 43/57 and the "risk" portion is about 75/25.

My suggestion is the the "risk" portfolio should ideally be at least equal to the "safe" portfolio. I think the concept is useful even with less than 20 years. I'd cut the years a bit to make sure there was enough "risk" assets to promote growth/inflation protection.

I view my "safe" portfolio as insurance vs an ATM. By that I mean I take any withdrawals from a mixture of "safe" fixed income and "risk" assets unless equities have a major decline. That tends to under utilize the "safe" assets. I can then use the excess "safe" assets to invest in the "risk" portfolio, spend more or extend the "safe" asset coverage.

I found this approach gave me peace of mind. I enjoy the benefits of equity growth and dislike when equities take a hit but I feel it doesn't affect the security of my retirement funding. Periodically I track my expense run rate and make sure I still have enough "safe" assets. At some point, say when I'm 80 I'll just decide to keep 10 years "safe" no matter what.

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Sandtrap
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Re: Got more than enough for retirement. What to do now?

Post by Sandtrap » Thu Jul 04, 2019 7:20 am

Sleepless wrote:
Thu Jul 04, 2019 5:02 am
My spouse and I have accumulated a very nice sum. Almost all of it is in ETFs, and also some cash. We live a modest, middle class life. We can conveniently and safely retire now (although we plan to keep on working). We have about 3x the amount that we need for retirement according to the various calculators.

We want minimum risk from now on.

What would be the safest thing to do with our money?
Congratulations on having everything in place to retire well, very well.
Curious
Age?
3X retirement expenses?
Based on the "average" "not always accurate" rule of thumb of 25X retirement expenses to retire at age 65.
Does this mean you have 75X ???

Otherwise, keep working full or part time as long as its rewarding. Consider retirement lifestyle options going forward. Will this impact your spending?
Estate planning.
Enjoy

j
Last edited by Sandtrap on Thu Jul 04, 2019 7:27 am, edited 1 time in total.
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TomatoTomahto
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Re: Got more than enough for retirement. What to do now?

Post by TomatoTomahto » Thu Jul 04, 2019 7:21 am

IMO, when you get to more than you need for retirement AND
- you are WELL past the amount necessary to fund your retirement
- you have a bequest motive (heirs and/or charity)
- you don't want to be thinking about this that much
- you want to withstand serious stormy weather without losing sleep

you should go to some kind of Liability Matching Portfolio (LMP). Pick an amount of safe investments that you think will tide you over. This can be $1M, $5M, and I guess if you're really conservative, $10M. I personally would not go lower than $1M, but it's your call. We personally picked $3M. That's your safe money. If you have enough tax deferred (not tax free) space, put it there. If it has to go to taxable, make choices based on your tax situation.

Every other penny of post-expense money goes to equities. We have a mix of Total Stock, PRIMECAP, and Total International Stock. The particular flavor of fund doesn't matter that much; the goal is to not have to fret. Since we had enough tax deferred space for our safe LMP assets, this goes to taxable and Roth.

Easy peasy.

ETA: I notice that while I was typing (I'm slow!), Dandy posted. We are roughly on the same page.
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Sandtrap
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Re: Got more than enough for retirement. What to do now?

Post by Sandtrap » Thu Jul 04, 2019 7:26 am

Dandy wrote:
Thu Jul 04, 2019 7:17 am
What I did was roughly follow Dr. Wm Bernstein's idea. He suggests putting 20-25 years worth of expected draw down dollars in "safe" products and then invest the rest anyway you want--even 100% equities.

For me I decided that made sense. So I used FDIC products, money markets and short term bonds which at the time was about 2/3 of my fixed income allocation. I decided to make it 22 years which at that time took me to age 90. My overall allocation is 43/57 and the "risk" portion is about 75/25. (confused)

My suggestion is the the "risk" portfolio should ideally be at least equal to the "safe" portfolio. I think the concept is useful even with less than 20 years. I'd cut the years a bit to make sure there was enough "risk" assets to promote growth/inflation protection.

I view my "safe" portfolio as insurance vs an ATM. By that I mean I take any withdrawals from a mixture of "safe" fixed income and "risk" assets unless equities have a major decline. That tends to under utilize the "safe" assets. I can then use the excess "safe" assets to invest in the "risk" portfolio, spend more or extend the "safe" asset coverage.

I found this approach gave me peace of mind. I enjoy the benefits of equity growth and dislike when equities take a hit but I feel it doesn't affect the security of my retirement funding. Periodically I track my expense run rate and make sure I still have enough "safe" assets. At some point, say when I'm 80 I'll just decide to keep 10 years "safe" no matter what.
Also a fan of Bernstein's LMP.
Congratulations on a well thought out plan.

So, then you will need a total of 44X
Meaning 44 times annual retirement expenses based on the above.
Is this correct?

*(FWIW: We have the same LMP approach) :D :D :D
Thanks for the help.
j :happy
Last edited by Sandtrap on Thu Jul 04, 2019 7:31 am, edited 1 time in total.
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Sandtrap
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Re: Got more than enough for retirement. What to do now?

Post by Sandtrap » Thu Jul 04, 2019 7:30 am

TomatoTomahto wrote:
Thu Jul 04, 2019 7:21 am
IMO, when you get to more than you need for retirement AND
- you are WELL past the amount necessary to fund your retirement
- you have a bequest motive (heirs and/or charity)
- you don't want to be thinking about this that much
- you want to withstand serious stormy weather without losing sleep

you should go to some kind of Liability Matching Portfolio (LMP). Pick an amount of safe investments that you think will tide you over. This can be $1M, $5M, and I guess if you're really conservative, $10M. I personally would not go lower than $1M, but it's your call. We personally picked $3M. That's your safe money. If you have enough tax deferred (not tax free) space, put it there. If it has to go to taxable, make choices based on your tax situation.

Every other penny of post-expense money goes to equities. We have a mix of Total Stock, PRIMECAP, and Total International Stock. The particular flavor of fund doesn't matter that much; the goal is to not have to fret. Since we had enough tax deferred space for our safe LMP assets, this goes to taxable and Roth.

Easy peasy.

ETA: I notice that while I was typing (I'm slow!), Dandy posted. We are roughly on the same page.
Okay.
I type slow as well, keep editing to death.

That makes 3 of us with the same Bernstein LMP approach and setup. :D (very nice. . . . )
(though I'm sure valuations differ) :shock:

Why PRIMECAP?

j :happy
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livesoft
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Re: Got more than enough for retirement. What to do now?

Post by livesoft » Thu Jul 04, 2019 7:31 am

Generally, projected annual spending times 25 is enough to retire. So 3X projected needs is 75 times projected annual spending and a withdrawal rate of less than 1.5% per year. The OP could give away two-thirds of their money and still be good. That would be a good way to help alleviate human pain and suffering.
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Watty
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Re: Got more than enough for retirement. What to do now?

Post by Watty » Thu Jul 04, 2019 7:33 am

Sleepless wrote:
Thu Jul 04, 2019 5:02 am
We want minimum risk from now on.

What would be the safest thing to do with our money?
There is a school of thought that says "Once you have won the game, then stop playing." and you could just put your needed living expenses into individual tips if you have enough money in retirement accounts to fund your retirement. Because of the way that TIPS are taxed they don't work well in a taxable account.

For example if you expect to need $30K a year in addition to Social Security then you would buy individual TIPS that mature in 2020,2021,2022, etc until you are 95 or 100. The longest TIPS you can buy is 30 years so if you are younger than 65 you would need to keep buying them as they become available in the future.

You would need to look at your expenses and Social Security three ways, as a couple and as if one of you survives the other.

You can figure out the optimal ages to start Social Security on this website that was created by a poster here who has written a book on social security.

https://opensocialsecurity.com/

That would cover your expected expenses but you could also have large expenses like if you need expensive care in an Alzheimer's nursing home for 10+ years so I would not be quick to give away your other money. The long term care insurance that is sold today is not as good as what was sold 20 years ago so that likely is not a good choice.

How to invest the rest of the money will depend on the rest your situation including what tax bracket you are in and how much of the money is taxable and retirement accounts. If you post your information in this suggested format you will get better suggestions on that.

viewtopic.php?f=1&t=6212

Topic Author
Sleepless
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Re: Got more than enough for retirement. What to do now?

Post by Sleepless » Thu Jul 04, 2019 8:20 am

Longdog wrote:
Thu Jul 04, 2019 7:07 am
lakpr wrote:
Thu Jul 04, 2019 6:47 am
welderwannabe wrote:
Thu Jul 04, 2019 6:30 am
GoldenFinch wrote:
Thu Jul 04, 2019 5:57 am
I would have a 50/50 stock/bond allocation and set it and forget it.
+1, or possibly a 40/60 portfolio. At vanguard Vanguard LifeStrategy Conservative Growth Fund (VSCGX) would be a simple choice.
I like this approach better than midareff's, only because everything sits in ONE fund and withdrawals / RMDs to be considered from ONE fund. Simplicity. midareff's suggestion is essentially a 33:67 split of stocks to bonds; Life Strategy Conservative Growth is 40:60. Both close enough for the purposes of preserving the capital plus adding growth to counter inflation.

Wellesley Income fund is another suggestion I would throw in the mix, actively managed and has zero international equities or bonds, but had excellent results over the past decade and half, including 2008 crisis.
The OP did not state where the money resides (taxable accounts, pre-tax accounts, Roth accounts) so, while those are good funds, they may not be the best choices from a tax perspective. There's not enough information in the OPs original post to make specific recommendations.
Thanks for asking and your help!
10% in cash.
90% is 3/4 in regular taxable accounts, 1/4 in various retirement accounts: 401/SE401/403/457 etc, a little bit in Roths
I was tired yesterday and I'm tired again today. I'm retired.

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Re: Got more than enough for retirement. What to do now?

Post by Dandy » Thu Jul 04, 2019 8:21 am

So, then you will need a total of 44X
Meaning 44 times annual retirement expenses based on the above.
Is this correct?
You want to think not of retirement expenses but retirement draw down dollars to supplement any other retirement income. So in my case 44 X my expected yearly draw down dollars at age 68 to fund "safe" portfolio to age 90.
Keep in mind this isn't Dr. Bernstein's suggestion it is mine and I am less qualified for sure.

Example: retirement portfolio of 2 million. Need to draw down $40,000 per year to supplement Social Security and a small pension . Want 20 years in "safe" portfolio. $40k x 20 = $800,000. "Safe" portfolio is $800k "Risk" portfolio is $1.2 million. I think that is a reasonable relationship between the size of both portfolios.

If the total portfolio was $1.5 million vs $2 million that would give you an $800k "safe" portfolio and $700k "risk" portfolio. I would feel a bit uncertain that the "risk" portfolio would provide enough growth/inflation protection especially in early retirement. I would probably drop the size of the "safe" portfolio to have equal or a bit more in the "risk" portfolio especially in the early years of retirement. That might mean "only" 17 years in the "safe" portfolio.

Hope this clarifies my approach and your question.

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Sleepless
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Re: Got more than enough for retirement. What to do now?

Post by Sleepless » Thu Jul 04, 2019 8:43 am

Rus In Urbe wrote:
Thu Jul 04, 2019 7:01 am
We are in a similar situation. DH is retired and I'm pulling the trigger in December. We glide-pathed to an overall AA of 50/50 and created some "fail-safes" so that in the event of a catastrophic market downturn, we will be okay.

So, several years ago, we opened a DAF (Donor Advised Fund), which consolidates our philanthropy. I used Vanguard Charitable, which requires $25K to open it and the minimum gift to charities is $500, and this easily fit our giving profile. I understand that Fidelity has a more flexible one in terms of lower limits.

Of course, the DAF has the benefit of lowering your taxes too---especially under the new tax rules, if you are philanthropic enough. Our beneficiaries are taken care of and we won't be able to take it with us, so we may as well do some good since we can.

For more on "giving back" read about the life of John Bogle, and especially his book, "Enough." Food for thought.

Congratulations on your success! :beer

Rus
Thank you for the good advice!

Philanthropy is super hard to get right. Well-meaning money often creates problems instead of solving them. I worked pro-bono for a few years in NGO-heavy countries. The road to hell is indeed paved with good intentions. My solution at this point is to donate directly to tiny mom-and-pop kind of organizations that I know personally and that have a very well-defined target.

I haven't read Bogle's "Enough" yet, I wonder what he suggests.
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TomatoTomahto
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Re: Got more than enough for retirement. What to do now?

Post by TomatoTomahto » Thu Jul 04, 2019 8:51 am

Sandtrap wrote:That makes 3 of us with the same Bernstein LMP approach and setup. :D (very nice. . . . )
(though I'm sure valuations differ) :shock:

Why PRIMECAP?
We were in PRIMECAP back when it was open to new investors. It has done well for us, and since it’s now closed, we put in what we’re allowed to ($25k per account annually). It’s not something I’ve thought a lot about; it has become reflex action in January. I like their tech leanings, but until you mentioned it, hadn’t looked up their top 10 holdings. Out of sight, out of mind.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Got more than enough for retirement. What to do now?

Post by Lynette » Thu Jul 04, 2019 8:58 am

I would have a spreadsheet until at least 75 with annual projections of taxes and medicare costs. Understand the advantages of Roth conversions before you start SS and RMDs. Also look at Medicare IRMAA. You can save a lot of money by having a good tax strategy before you have to take RMDs. QCDs (Qualified Charitable Distributions) have been a great vehicle for me to reduce taxes. I did not know about Medicare IRMAA ...

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Re: Got more than enough for retirement. What to do now?

Post by welderwannabe » Thu Jul 04, 2019 9:04 am

Longdog wrote:
Thu Jul 04, 2019 7:07 am
while those are good funds, they may not be the best choices from a tax perspective. There's not enough information in the OPs original post to make specific recommendations.
You make a valid point. Taxes are an important consideration, but so is simplicity. The vanguard tax managed balanced fund could work. although it is more stock heavy than the fund I suggested.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Sleepless
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Re: Got more than enough for retirement. What to do now?

Post by Sleepless » Thu Jul 04, 2019 9:05 am

midareff wrote:
Thu Jul 04, 2019 5:54 am
At three times projected needs and the desire to be conservative ... 1/3 would fit nicely into a TIPS ladder providing inflation security, 1/3 in a mix of intermediate term treasuries and CDs for liquidity protection and the remaining 1/3 in diversified equities such as the Total Stock Market or S&P500 with or without a touch of Total International. That last third providing some growth possibilities. I think the entire concept of don't risk what you do have and do need to make more that you don't need or can't spend is perfectly logical.

There are annuities both with and without inflation adjustments but that (IMHO) is just giving your money to someone and hoping they give it back later.
Thank you all.

I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?
I was tired yesterday and I'm tired again today. I'm retired.

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Re: Got more than enough for retirement. What to do now?

Post by Wiggums » Thu Jul 04, 2019 9:08 am

RobLyons wrote:
Thu Jul 04, 2019 5:11 am
CDs, high interest savings accounts, lend or gift it to fellow BHs :D
I graciously accept all gifts as well. :sharebeer

Congratulations on your retirement savings and selective charitable giving...
Last edited by Wiggums on Thu Jul 04, 2019 9:20 am, edited 1 time in total.

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Re: Got more than enough for retirement. What to do now?

Post by willthrill81 » Thu Jul 04, 2019 9:13 am

CDs, TIPS, and Treasuries are government guaranteed, so all are great choices.

Over the last 50 years, a 25% allocation to stocks and 75% allocation to intermediate-term Treasuries was actually less volatile than a 100% allocation to ITT and had a significantly higher return as well.
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Re: Got more than enough for retirement. What to do now?

Post by welderwannabe » Thu Jul 04, 2019 9:19 am

Sleepless wrote:
Thu Jul 04, 2019 9:05 am
I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?
The fund I suggested Vanguard LifeStrategy Conservative Growth Fund (VSCGX) includes:

18.1% International Bonds
15.7% International Stocks
42.80% US Bonds
23.4% US Stocks

It is highly diversified both domestically and internationally. It is a one stop shop.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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TomatoTomahto
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Re: Got more than enough for retirement. What to do now?

Post by TomatoTomahto » Thu Jul 04, 2019 9:20 am

Sleepless wrote:
Thu Jul 04, 2019 9:05 am
I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?
That's difficult to discuss without breaking rules here about politics.
As a start, I would put more in World Indexes (or Total International). Additionally, we have structured our physical environment to withstand infrastructure disruptions (e.g., electric, water, etc.) of moderate severity.
If you have enough money, you can always get out of Dodge. You might have to leave a fair amount of money behind.
Okay, I get it; I won't be political or controversial. The Earth is flat.

livesoft
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Re: Got more than enough for retirement. What to do now?

Post by livesoft » Thu Jul 04, 2019 9:26 am

Sleepless wrote:
Thu Jul 04, 2019 9:05 am
I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?
The way to spread this risk is to have close family living and working in multiple countries around the globe. And they would spread their risk by having you to fall back onto as well.
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willthrill81
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Re: Got more than enough for retirement. What to do now?

Post by willthrill81 » Thu Jul 04, 2019 9:26 am

TomatoTomahto wrote:
Thu Jul 04, 2019 9:20 am
Sleepless wrote:
Thu Jul 04, 2019 9:05 am
I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?
That's difficult to discuss without breaking rules here about politics.
As a start, I would put more in World Indexes (or Total International). Additionally, we have structured our physical environment to withstand infrastructure disruptions (e.g., electric, water, etc.) of moderate severity.
If you have enough money, you can always get out of Dodge. You might have to leave a fair amount of money behind.
For someone really concerned about such things, it might be worthwhile to hold a significant quantity of several major currencies in physical form, secured via safe deposit box(es) and possibly a home safe as well.

Someone might even make a pretty good case for holding some cryptocurrency for this purpose as well.

Holding some physical precious metals could be another option; I personally know one deca-millionaire who holds several hundred thousand dollars worth of precious metals in a very secure home safe.

Depending on the dollar amounts involved, I could even see a case could be made for owning one or two inexpensive houses in other nations with safe deposit boxes in those nations as well.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Got more than enough for retirement. What to do now?

Post by Longdog » Thu Jul 04, 2019 9:31 am

Sleepless wrote:
Thu Jul 04, 2019 9:05 am
midareff wrote:
Thu Jul 04, 2019 5:54 am
At three times projected needs and the desire to be conservative ... 1/3 would fit nicely into a TIPS ladder providing inflation security, 1/3 in a mix of intermediate term treasuries and CDs for liquidity protection and the remaining 1/3 in diversified equities such as the Total Stock Market or S&P500 with or without a touch of Total International. That last third providing some growth possibilities. I think the entire concept of don't risk what you do have and do need to make more that you don't need or can't spend is perfectly logical.

There are annuities both with and without inflation adjustments but that (IMHO) is just giving your money to someone and hoping they give it back later.
Thank you all.

I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?
In my opinion, the developed world is now one large interconnected economy, so as if the US becomes unstable, so will the rest of the developed world. And if the developed world becomes unstable, the developing world hasn't got a chance. (Again - my opinion!) To mitigate this risk, you can put a portion of your equities and even bonds into international funds. Or you could rationalize that it's not going to matter - we're all going to sink or swim together.

Alternatively, you can take a couple hundred thousand of your hard-earned dollars and book the first SpaceX flight to Mars (projected to be in 2024 according to the CEO, who is known to be super accurate in his timeline projections! :happy ) to help colonize it and become a pioneer. That could diversify your risk considerably!
Steve

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midareff
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Re: Got more than enough for retirement. What to do now?

Post by midareff » Thu Jul 04, 2019 9:57 am

Sleepless wrote:
Thu Jul 04, 2019 9:05 am
midareff wrote:
Thu Jul 04, 2019 5:54 am
At three times projected needs and the desire to be conservative ... 1/3 would fit nicely into a TIPS ladder providing inflation security, 1/3 in a mix of intermediate term treasuries and CDs for liquidity protection and the remaining 1/3 in diversified equities such as the Total Stock Market or S&P500 with or without a touch of Total International. That last third providing some growth possibilities. I think the entire concept of don't risk what you do have and do need to make more that you don't need or can't spend is perfectly logical.

There are annuities both with and without inflation adjustments but that (IMHO) is just giving your money to someone and hoping they give it back later.
Thank you all.

I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?
While an interesting point I believe we can assume that the US Government as represented by the Treasury and the US economy as represented by the Total US Stock Market or S&P500 should vanish, currency will most likely be some form of wan-pam, salt bags and ammunition. In any of those cases I can't image a safe civilized society to enjoy that retirement in.

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Re: Got more than enough for retirement. What to do now?

Post by bradinsky » Thu Jul 04, 2019 10:40 am

“I see that most advice assumes the political and relative economic stability of the US.
Is this wise, given a 30-50 year horizon? Should this be a consideration? Is there a way to spread this risk?”

OP,
With a scenario such as you describe, you might consider a tilt towards gasoline, guns, bullets & dehydrated food.

Rus In Urbe
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Re: Got more than enough for retirement. What to do now?

Post by Rus In Urbe » Thu Jul 04, 2019 10:43 am

Sleepless (OP) wrote:
Philanthropy is super hard to get right. Well-meaning money often creates problems instead of solving them. I worked pro-bono for a few years in NGO-heavy countries. The road to hell is indeed paved with good intentions. My solution at this point is to donate directly to tiny mom-and-pop kind of organizations that I know personally and that have a very well-defined target.
I haven't read Bogle's "Enough" yet, I wonder what he suggests.
I know just what you mean. But just because some NGOs are corrupt should not keep you from philanthropic endeavors----Vanguard Charitable uses GuideStar which ranks charities based on their efficiency and outcomes; that way, you can compare charities you are considering in terms of, for instance, how much of their income actually goes to the programs and how much is eaten up by administration. About half of our giving goes to local arts and cultural organizations, so we have direct experience with where the money is going and how it is being used.

I can't recommend Bogle's "ENOUGH" highly enough. Worth reading.

HAPPY FOURTH! Aren't we lucky to enjoy such freedom. :beer :sharebeer :beer :sharebeer :beer
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Sleepless
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Re: Got more than enough for retirement. What to do now?

Post by Sleepless » Fri Jul 05, 2019 8:31 am

Sandtrap wrote:
Thu Jul 04, 2019 7:20 am
Sleepless wrote:
Thu Jul 04, 2019 5:02 am
My spouse and I have accumulated a very nice sum. Almost all of it is in ETFs, and also some cash. We live a modest, middle class life. We can conveniently and safely retire now (although we plan to keep on working). We have about 3x the amount that we need for retirement according to the various calculators.

We want minimum risk from now on.

What would be the safest thing to do with our money?
Congratulations on having everything in place to retire well, very well.
Curious
Age?
3X retirement expenses?
Based on the "average" "not always accurate" rule of thumb of 25X retirement expenses to retire at age 65.
Does this mean you have 75X ???

Otherwise, keep working full or part time as long as its rewarding. Consider retirement lifestyle options going forward. Will this impact your spending?
Estate planning.
Enjoy

j
~50 y.o. and both still working.
Yes, around 75x.
I was tired yesterday and I'm tired again today. I'm retired.

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goodenyou
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Re: Got more than enough for retirement. What to do now?

Post by goodenyou » Fri Jul 05, 2019 9:50 am

Without utter meltdown and Armageddon, a balanced portfolio will be sufficient at 75x expenses. It is a dancing-on-the-head-of-a-pin discussion.

Why not increase your consumption? Buy a nicer car, bigger house, more luxury, indulge. Help the economy, employ more people and consume! I say that somewhat facetiously. I am facing a similar dilemma. As I have amassed more wealth, I have become less inclined to consume and have substituted it with saving additional multiples of retirement expenses. My desire to consume has decreased as wealth has increased. Creating a "safer" portfolio has become the "luxury".

Some are capable of extreme LBYM and being happy. That will serve you well.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

ohai
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Re: Got more than enough for retirement. What to do now?

Post by ohai » Fri Jul 05, 2019 9:53 am

If you really want to minimize risk, then you should get some kind of annuity to hedge your life risk, not just financial risk.

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willthrill81
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Re: Got more than enough for retirement. What to do now?

Post by willthrill81 » Fri Jul 05, 2019 10:00 am

goodenyou wrote:
Fri Jul 05, 2019 9:50 am
Without utter meltdown and Armageddon, a balanced portfolio will be sufficient at 75x expenses.
Historically, 50x would be adequate unless your country of residence becomes the target of war, in which case all bets are off.
goodenyou wrote:
Fri Jul 05, 2019 9:50 am
Why not increase your consumption?
That's certainly an option, but I would suggest that increasing one's giving would be wholly appropriate in such an enviable situation.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Sleepless
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Re: Got more than enough for retirement. What to do now?

Post by Sleepless » Fri Jul 05, 2019 10:20 am

goodenyou wrote:
Fri Jul 05, 2019 9:50 am
Why not increase your consumption
Sorry but I'm not an iPhone X kind of guy :)

The only major change in consumption is flying business on transatlantic flights. Economy becomes quite difficult as you "mature"

"If you don't fly business, your heirs will"
I was tired yesterday and I'm tired again today. I'm retired.

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TomatoTomahto
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Re: Got more than enough for retirement. What to do now?

Post by TomatoTomahto » Fri Jul 05, 2019 11:46 am

Sleepless wrote:
Fri Jul 05, 2019 10:20 am
goodenyou wrote:
Fri Jul 05, 2019 9:50 am
Why not increase your consumption
Sorry but I'm not an iPhone X kind of guy :)
The only major change in consumption is flying business on transatlantic flights. Economy becomes quite difficult as you "mature"
"If you don't fly business, your heirs will"
Good for you. Seriously. Just 5 minutes ago, my wife booked Coach to CA (from MA) and Premium Economy to Australia for herself and son. She (and somewhat me also) just can’t pull the trigger. I have an iPhone X; she has some older iPhone.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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goodenyou
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Re: Got more than enough for retirement. What to do now?

Post by goodenyou » Fri Jul 05, 2019 12:44 pm

I have an iPhone 7. Works great. That must be the new arbiter of frugality. The rest of my family all have the newest iPhones.

Milton Friedman once opined that parents often value the ability of their children to consume more than their own. I guess I exemplify that sentiment.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

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