Please Help me Simplify my IRA - Fidelity 3 fund?

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MidwestInvest
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Joined: Mon Jul 15, 2019 9:55 am

Please Help me Simplify my IRA - Fidelity 3 fund?

Post by MidwestInvest » Mon Jul 15, 2019 10:21 am

Hi!
I am a 62 year old guy, own my home ($425K value).
I have about 1.1 million in 1-2 year CDs, SEP and an IRA. I am a conservative investor.
I have a 130k SEP at my current job which is invested in Vanguard Target Retirement 2015 Fund (VTXVX)

My main question is how to simplify my IRA. I will retire in about 6 months and work part-time to supplement my income.

Currently this is my IRA investment that I need some feedback on, It is about 60% of investment portfolio :

FIEUX FIDELITY EUROPE 32%
FSANX FIDELITY ASSET MANAGER 60% 6%
FSCHX FIDELITY SELECT CHEMICALS 35%
FSDPX FIDELITY SELECT MATERIALS PORTFOLIO 15%
FSHBX FIDELITY SHORT TERM BOND 12%

1. Should I move it all into a 3 fund portfolio?
2. Should I move it all at once or should I do it over a series of months?

Thanks for any insight!

J

bloom2708
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Location: Fargo, ND

Re: Please Help me Simplify my IRA - Fidelity 3 fund?

Post by bloom2708 » Mon Jul 15, 2019 2:03 pm

I think the 3 fund portfolio would be a big improvement.

If this is 60% of your portfolio, that means those "sliced" stock funds are 53% of your portfolio. A quite narrow slice. I'm not sure what Asset Manager is.

I'd rather see you with Total US and Total International (maybe 80/20 or 70/30 mix). The balance in Short or Intermediate Term Bond indexes and your CDs.

What is your desired retirement mix of stocks/bonds/cash? How does it compare to your current full allocation?

In the IRA (SEP too), make moves at once. No tax consequences inside the IRA and SEP.

You might benefit from doing the full "Asking Portfolio Questions" format.

viewtopic.php?t=6212

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retiredjg
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Re: Please Help me Simplify my IRA - Fidelity 3 fund?

Post by retiredjg » Mon Jul 15, 2019 3:16 pm

You might just put the IRA into one of the Fidelity Freedom Index target funds (not the ordinary Fidelity Freedom funds that are more costly. that would be pretty simple.

mervinj7
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Re: Please Help me Simplify my IRA - Fidelity 3 fund?

Post by mervinj7 » Mon Jul 15, 2019 3:51 pm

retiredjg wrote:
Mon Jul 15, 2019 3:16 pm
You might just put the IRA into one of the Fidelity Freedom Index target funds (not the ordinary Fidelity Freedom funds that are more costly. that would be pretty simple.
+1. Since its an IRA and you are primary interested in simplicity, just pick the fund that most closely matches your 401k's Vanguard 2015 fund, Fidelity Freedom Index 2020 Fund (FPIFX) with an ER of 0.12%. Do it all at once. After a couple of months/quarters/years, you can fine-tune to a three-fund portfolio if you really want to.

https://fundresearch.fidelity.com/mutua ... =sq-NavBar

Breakdown:
Domestic Equities 37.34%
International Equities 16.81%
Bonds 35.97%
Short-Term Debt & Net Other Assets 9.88%

Topic Author
MidwestInvest
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Joined: Mon Jul 15, 2019 9:55 am

Re: Please Help me Simplify my IRA - Fidelity 3 fund?

Post by MidwestInvest » Tue Jul 16, 2019 9:21 am

Thanks for all of the input. I will investigate the Fidelity Freedom fund. I was also concerned that i have so much of my portfolio in FIEUX FIDELITY EUROPE and FSCHX FIDELITY SELECT CHEMICALS.

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Watty
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Re: Please Help me Simplify my IRA - Fidelity 3 fund?

Post by Watty » Tue Jul 16, 2019 10:32 pm

retiredjg wrote:
Mon Jul 15, 2019 3:16 pm
You might just put the IRA into one of the Fidelity Freedom Index target funds (not the ordinary Fidelity Freedom funds that are more costly. that would be pretty simple.
+1

When I retired in 2015 I just put almost all my funds into the 2015 Vanguard Target Retirement fund that is like that.

In the right situation they are a great choice. The main reasons not to use them are;

1) You don't have a good target date fund in your 401k

2) You also have a lot of retirement money in taxable accounts where tax efficiency is an issue.

One of the reasons that I like the target date funds is that they will be easier to manage when I am older and I may be less financially capable or if my wife who knows less about investing has to manage it some day.

As one of the prior posts mentioned make sure that you use the index version at Fidelity since it has a lower expense ratio.

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