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Topic Author
HotRod140
Posts: 86
Joined: Tue Apr 15, 2008 12:24 pm

Help

Post by HotRod140 » Sun Aug 25, 2019 11:39 am

Hi All,

I am very much a lurker as opposed to a poster. I am seeking some advice or opinions. I am almost 60, retired in New York with a $80,000 a year pension. My wife will work for two more years and earns a salary of Approximately 65,000. We have a paid off condo And have zero debt of any kind. Right now we have 1.3 million in investments, of which 130,000 is in a taxable account. We also have Approximately 400,000 in various Internet banking accounts. We have not decided When we will draw upon social security and I Won’t get into a debate whether to take it early or not. When we feel like it, we will take it. To get to the point, I have lost the stomach To put up with the daily up and downs of the market. It is very easy to say don’t pay attention and continue on with your life. I got Married at a young age and all three of my children are grown and successful in their lives. Right now I am a babysitter to two of my grandchildren and I love it. Never in my wildest dreams did I think I’d be in this position of my life with this kind of money. My current investments are a 40/60 split, all with Vanguard index funds. I am thinking of just taking all the money and do some kind of CD ladder. I have no plans for this money at this time of my life and feel there is no reason for me to take any more risks. I just don't want to anymore. Can anyone provide me with any wisdom to my thinking. Thanks in advance

livesoft
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Re: Help

Post by livesoft » Sun Aug 25, 2019 11:42 am

I read your post as "Here is someone who is changing their mind" which made me think: Will they change their mind again in the near future?
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HEDGEFUNDIE
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Re: Help

Post by HEDGEFUNDIE » Sun Aug 25, 2019 11:59 am

Stick with 40/60. That is plenty conservative.

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Sandtrap
Posts: 8715
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Location: Hawaii No Ka Oi , N. Arizona

Re: Help

Post by Sandtrap » Sun Aug 25, 2019 12:07 pm

HotRod140 wrote:
Sun Aug 25, 2019 11:39 am
Hi All,

I am very much a lurker as opposed to a poster. I am seeking some advice or opinions. I am almost 60, retired in New York with a $80,000 a year pension. My wife will work for two more years and earns a salary of Approximately 65,000. We have a paid off condo And have zero debt of any kind. Right now we have 1.3 million in investments, of which 130,000 is in a taxable account. We also have Approximately 400,000 in various Internet banking accounts. We have not decided When we will draw upon social security and I Won’t get into a debate whether to take it early or not. When we feel like it, we will take it. To get to the point, I have lost the stomach To put up with the daily up and downs of the market. It is very easy to say don’t pay attention and continue on with your life. I got Married at a young age and all three of my children are grown and successful in their lives. Right now I am a babysitter to two of my grandchildren and I love it. Never in my wildest dreams did I think I’d be in this position of my life with this kind of money. My current investments are a 40/60 split, all with Vanguard index funds. I am thinking of just taking all the money and do some kind of CD ladder. I have no plans for this money at this time of my life and feel there is no reason for me to take any more risks. I just don't want to anymore. Can anyone provide me with any wisdom to my thinking. Thanks in advance
This is easier for others to read:

Age: 60
Status: Retired (New York)
Condo: No Mortgage
Debt: None
SS: delayed.
Income: spouse 65k/year (2 more years)
Income: pension: 80,000/year
Total income: 145k/year

Total investments: == 1.3 million.
Current AA = 40/60 (Vanguard Index Funds)

Taxable space: 130k
401k/etc.: 770k
Internet banking accounts: 400k (CD's, High Yield Accounts???? Correct?) Or is this part of the Vanguard Index Funds?

Is this correct?

Missing data:
**** Total annual expenses in retirement?
annual health care premiums? Or part of pension?
list of Vanguard Index Funds and percent of total for each?

Are you asking the sense of moving "all" of your investments/cash/etc. to a cd ladder? (large capital gains doing this?)
Or, only the funds that are not Vanguard Index funds?
j
Last edited by Sandtrap on Sun Aug 25, 2019 12:11 pm, edited 2 times in total.
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ram
Posts: 1367
Joined: Tue Jan 01, 2008 10:47 pm
Location: Midwest

Re: Help

Post by ram » Sun Aug 25, 2019 12:09 pm

Consider Vanguard Wellesly as your single fund for the $900 K. It has 38% stocks and with 400K in CDs gives you 26% stocks which is near the lowest recommended portion of stocks. It has less ups and downs than other funds.
Ram

student
Posts: 4360
Joined: Fri Apr 03, 2015 6:58 am

Re: Help

Post by student » Sun Aug 25, 2019 12:17 pm

Is your pension COLA adjusted? If so, $80,000 already put you in about the top 20% of earners. I assume you have health insurance through your wife. And you have SS that you can draw (whenever you want). You will be fine as long as you do not something "stupid."

Topic Author
HotRod140
Posts: 86
Joined: Tue Apr 15, 2008 12:24 pm

Re: Help

Post by HotRod140 » Sun Aug 25, 2019 12:24 pm

Thanks for the responses, my health insurance is fully covered in my pension until Medicare. My current monthly expenses are approximately 2000 dollars. If i sold my taxable position(total stock index), my capital gains would only amount to 10,000 dollars.

delamer
Posts: 9492
Joined: Tue Feb 08, 2011 6:13 pm

Re: Help

Post by delamer » Sun Aug 25, 2019 12:25 pm

There is an inherent inconsistency in saying “I don’t need this money but I don’t want to take risk with it either.”

That said, if your bottom line is that you will not need to use your investments to to support you and your wife in retirement, then I would do two things (assuming you’ll leave the money to your kids):

Start gifting some money each year to your kids. Let them have use of it when they are young rather than inheriting it when they are 60.

Leave the $400K in the bank. Invest the rest based on your kids’ ages and risk tolerance, not yours.

Topic Author
HotRod140
Posts: 86
Joined: Tue Apr 15, 2008 12:24 pm

Re: Help

Post by HotRod140 » Sun Aug 25, 2019 12:32 pm

Thats a great idea, I am all about the kids, thanks

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Watty
Posts: 18154
Joined: Wed Oct 10, 2007 3:55 pm

Re: Help

Post by Watty » Sun Aug 25, 2019 12:35 pm

HotRod140 wrote:
Sun Aug 25, 2019 11:39 am
Can anyone provide me with any wisdom to my thinking.
I would be very cautious about putting all your money into one type of investment that you think is safe since things can work out in unexpected ways.

Taking a conservative stance might be reasonable but being well diversified(in a conservative way) might be a better approach than trying to trying to make a big bet on what you think is one "safe" asset class.

The big questions are;

1) What are your expenses?

2) Is your pension adjusted for inflation?

3) What is your condo worth? (The home equity can be a good safety net.

HotRod140 wrote:
Sun Aug 25, 2019 11:39 am
I am thinking of just taking all the money and do some kind of CD ladder.
A TIPs ladder might be a better idea since inflation may be your biggest enemy.

There is a school of thought that says, "Once you have won the game, stop playing." You could put a lot of the money in your retirement accounts into TIPs Those mature up to 30 years in the future. With your wife working you do not seem to an any immediate need for that income so in the retirement accounts you could buy a TIPs ladder of individual bonds where the first one matures in ten years and that last one matures in 30 years. If you bought $50K in TIPs that mature each year for those 20 years that would cost a million dollars. You would also need to have some money invested so you would have money to live on if your or your wife live more than 30 years.
HotRod140 wrote:
Sun Aug 25, 2019 11:39 am
We have not decided When we will draw upon social security and I Won’t get into a debate whether to take it early or not. When we feel like it, we will take it.
When you are deciding what to do about Social Security you may want to check out this web site to get a suggested claiming strategy.

https://opensocialsecurity.com/

In making your decision also be sure to consider the tax impact since the way Social Security is taxed is no intuitive and can put you in a much higher than expected effective tax bracket.

https://www.bogleheads.org/wiki/Taxatio ... y_benefits

You also need to look at your future taxes three ways, as a couple and as if one of your survives the other and is then filing tax returns in the higher single tax brackets.

student
Posts: 4360
Joined: Fri Apr 03, 2015 6:58 am

Re: Help

Post by student » Sun Aug 25, 2019 1:09 pm

HotRod140 wrote:
Sun Aug 25, 2019 12:24 pm
Thanks for the responses, my health insurance is fully covered in my pension until Medicare. My current monthly expenses are approximately 2000 dollars. If i sold my taxable position(total stock index), my capital gains would only amount to 10,000 dollars.
Then you are all set. You can comfortably live on what you have. I would probably go with the classic 60/40, or if you want to be more conservative 50/50.

HomeStretch
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Re: Help

Post by HomeStretch » Sun Aug 25, 2019 1:33 pm

With a pension of $80k, SS income and $24k of expenses, most likely your income will more than cover your expenses with inflation over your/spouse’s lifetime and you will never have to touch your portfolio.

If you believe that’s the case, then you could move your portfolio to CDs or treasuries and be fine. But I suggest you keep a minimum of 30% equities and consider 50-60% equities. There is no need to be fearful of the market in your financial position.

Do you have long-term care insurance or will that be self-pay if needed?

If you do find yourself with a growing untouched portfolio, consider while alive using it to share your good fortune - making donations, gifts to family, paying for family vacations, or funding your grandchildren’s education.

Best of luck with retirement.

Topic Author
HotRod140
Posts: 86
Joined: Tue Apr 15, 2008 12:24 pm

Re: Help

Post by HotRod140 » Sun Aug 25, 2019 1:39 pm

Thank you, Homestretch, for your good wishes. I have actually started with what you suggested. Cruise to Bermuda for 14 next year.

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