retirement and portfolio planning

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Topic Author
jbinpa59
Posts: 10
Joined: Wed Jul 10, 2019 3:29 pm

retirement and portfolio planning

Post by jbinpa59 » Wed Jul 10, 2019 5:51 pm

Looking to retire no sooner than three years but more likely in five years

me
60 yo employed by usps in FERS system
spouse
58 yo retail clerk

my current investments
trad tsp 632k+ 5% match for contributions (3500/yr at current base pay)
roth tsp 50k will be adding 17k more by year end to max out contributions &catch ups
both 75%C fund s&p 500 index, 25%S fund mid-small cap index giving n 8.3% net return in last 12mo
will be attempting to maintain that contribution level till retirement

roth ira 25k maxed for this year in TRP Health sci mutual fund
taxable 13k in TRP health sci mutual fund intended to prefund 2020&2021 roth ira contributions as fund transfers

about 1year normal spending in local accounts for EMF, looking to move most to money market for better returns

spouse current investments
two small old employer 401K of $ 9500 combined planning to be rolled over/converted into aroth ira in a large cap index fund
roth ira 7k maxed for this year in TRP Com Tech mutual fund
taxable 13k in TRP Com Tech mutual fund intended to prefund 2020&2021 roth ira contributions as fund transfers

pretty much a lazy stock heavy indexes with a small sector play, split 95% stocks 5% cash
plan to roll 10 to15%of total portfolio into bonds and or treasuries 6mo before retirement (probably within tsp G fund)

also planning to convert at least 100k of trad tsp to a roth ira before retirement the tax credits at time of contribution were higher than my 12% effective tax rate plus as much more as i can while staying below 15%effective tax rate
i'm wanting to reduce traditional balances to mitigate the potential RMD survivor tax torpedo


any suggestions on above?
understanding that I dont like the risk vs returns on tsp international fund
and for most of my career tsp bond fund was also under performing

my pension in 3 years will be 26k per year with some inflation protection obviously a bit higher if i go later
spouse no pension

social security
me
FRA 66-10 pia 2610 planning to claim at fra or later
spouse
FRA 67 pia 896 planning to claim at 62 on hers and jump to mine when i claim

if we both retire and immediately claim ss in 2023 we'd get 61k per year from pension and early ss claims
which would need about another 10k from investments

more likely to split file and draw down trad tsp till i take ss
with our level of more or less annuity equivalent inflation protected income i dont see a big need for bonds beyond 2 years expenses


TIA
JB

dbr
Posts: 29547
Joined: Sun Mar 04, 2007 9:50 am

Re: retirement and portfolio planning

Post by dbr » Wed Jul 10, 2019 6:23 pm

Your investments can easily support more withdrawal than $10k/year at any asset allocation. In that sense you don't need any particular choice between either stocks or bonds/cash.

The question to be addressed, then, is how interested are you in how large your assets grow and how much do you care how uncertain that outcome is. If you want lots of money but very uncertainly then put it all in stocks. If you want great certainty but not a lot of growth, put it all in TIPS. An obvious middle course that suits the needs of lots of people in retirement would be a 50/50 asset allocation.

User avatar
Watty
Posts: 16535
Joined: Wed Oct 10, 2007 3:55 pm

Re: retirement and portfolio planning

Post by Watty » Wed Jul 10, 2019 6:31 pm

jbinpa59 wrote:
Wed Jul 10, 2019 5:51 pm
social security
me
FRA 66-10 pia 2610 planning to claim at fra or later
spouse
FRA 67 pia 896 planning to claim at 62 on hers and jump to mine when i claim
You can use this web site to get a suggested Social Security claiming strategy.

https://opensocialsecurity.com/
jbinpa59 wrote:
Wed Jul 10, 2019 5:51 pm
with our level of more or less annuity equivalent inflation protected income i dont see a big need for bonds beyond 2 years expenses
You are doing good so there is no reason to be overly aggressive and if something happens like one of you might need alzheimers care for ten years you will need the money so you should be cautious about taking unnecessary risk.

dbr
Posts: 29547
Joined: Sun Mar 04, 2007 9:50 am

Re: retirement and portfolio planning

Post by dbr » Wed Jul 10, 2019 6:35 pm

Watty wrote:
Wed Jul 10, 2019 6:31 pm
[

You are doing good so there is no reason to be overly aggressive and if something happens like one of you might need alzheimers care for ten years you will need the money so you should be cautious about taking unnecessary risk.
I do agree with that. I think a big risk in retirement is not in the investments but in anticipating what the needs could be. That is one reason things like 50/50 are a good idea.

Topic Author
jbinpa59
Posts: 10
Joined: Wed Jul 10, 2019 3:29 pm

Re: retirement and portfolio planning

Post by jbinpa59 » Wed Jul 10, 2019 8:44 pm

thanx to dbr and watty

looking at ltc policies as well as watty mentioned might be needed, thats mostly what the extra above pension and ss would be for

also forgot to mention we live in pa so no state taxes on pensions, ss, and iras/401ks are all handled like a roth taxed going in taxfree coming out
and we have no current debt, cars/house/toys all paid off
credit card is for convenience and milking rewards, pay in full each mo

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