Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
debrajo61
Posts: 33
Joined: Sat Mar 08, 2014 9:57 pm

Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by debrajo61 » Mon Sep 09, 2019 2:52 pm

We are a retired couple, both 60 years young, both retired from the Govt, both under the old CSRS retirement plan.
No debt/home paid off, value $300,000
Status: Married File Jointly
Tax Bracket 24%
Annual Income = $100,000 after taxes from two pensions (would be cut in half if one of us die). We currently pay no state tax on our pension in Illinois.

Cash/Taxable: $150,000 (money market, checking, savings)

Investment/Taxable:
VTIAX Intl Stock Fund $30.000
VTSAX total Stock Mkt Index $185,000

Current Allocation:

His TSP - $406,000 (currently all G fund, Govt Securities)
Her TSP - $378,000 (currently all in G fund Govt Securities)

His Roth IRA: VSCGX Life Strategy Conservative Growth Fund - $302,000 40% stock/60% bond
VTIAX Total Intl Stock Fund Admiral - $24,000

Her Roth IRA: VGMGX Life Strategy Moderate Growth Fund - $340,000 60% stock/40% bond
VTSAX Total Stock Market Index Fund - $15,000

College Savings Plan for one grandson $17,000 with $200 invested each month

Total assets minus home = ~ $1,800,000
Currently ~32% invested in stocks / ~68% in cash/vanguard bond funds
Would like to increase to 40% stocks with monthly investments into Vanguard funds.
Not investing at all currently.

QUESTIONS:

-Where should we consider investing the approximately $75,000 in cash we want to move out of savings over time (plus any additional monies we save annually), to get to around 40% stock investments @ Vanguard?

- Roth IRA funds - any suggestions to tweak allocations?

- Govt TSP - suggestions to tweak allocations and get back into some stocks, or wait until the market drops considerably to do anything? Or leave as is?

Obviously you can see we are on the conservative side. We moved all TSP monies into the G fund about two years ago (hindsight 20/20). Although we are conservative, we also would like to continue investing into taxable stock funds to continue accruing some income over time.

Spending & Goals:

We currently winter in gulf coast of Florida, renting 4 months @ ~$10,000 total. No intent to purchase a vacation home.
We travel elsewhere @~10,000 annually.
We would like to age in place as long as possible (estimate 5-7 years), then downsize (which may end up costing more...or less depending on area and age of property) to either a condo or smaller home. This is our biggest variable down the road as we would like to be a cash buyer (works fine if we go with same or lower price home).
The only other large purchase aside from this is potentially a newer vehicle in the next couple years.
We are living comfortably on our joint pension and see no reason that we can't continue to live on that alone (and save probably 20-30% of it) for the foreseeable future as long as there are two checks coming in, and we are healthy. We've been retired three years and are doing more than fine on pension alone so far.

Side note: We have already gifted both of our adult (and thankfully financially responsible) children close to $150,000 each over a period of a few years and we don't intend large monetary gifts to either for many more years.

Appreciate any input. I've learned so much here in the forums over the years.

bloom2708
Posts: 6673
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by bloom2708 » Mon Sep 09, 2019 3:33 pm

I don't think you need to change much. The pensions are great.

The easy thing to do is move some of your cash into Total US + Total International in your taxable account to get to ~40% stocks.

I am good with the G fund in your TSPs, LifeStrategy mix in your Roth IRAs is completely fine too. Good funds.

You don't mention your spending. You still do have a good 30+ window, so staying in that 40% stock range is a nice place to be. Splurge here and there on good years. Tighten the belt if stocks have a big pullback and re-balance.

Hopefully others have good points to add. Enjoy retirement!
"We are not here to agree with you; we are here to provoke thoughtfulness." Unknown Boglehead

Topic Author
debrajo61
Posts: 33
Joined: Sat Mar 08, 2014 9:57 pm

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by debrajo61 » Mon Sep 09, 2019 4:30 pm

thanks for your response. i would say that we spend around $50,000 annually, which includes winters in Florida and some cushion. two years ago we put in a new kitchen @ 20k; last year we bought our son a car @ 25k. without any type of more expensive purchases, though, we can stay around $50,000 including all living and home/vehicle expenses, insurance (already taken out of pension), medical/dental expenses (as of now), entertainment, gifts and other travel. That would be my estimate if the stars align correctly any given year.

ohai
Posts: 989
Joined: Wed Dec 27, 2017 2:10 pm

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by ohai » Mon Sep 09, 2019 4:36 pm

The pensions are like a fixed income asset, which means that you can probably tolerate a rather high exposure to equities or other risky asset. Even higher than 50% would be fine, if you had appetite for that risk.

retiredflyboy
Posts: 160
Joined: Sun Dec 02, 2018 10:02 pm

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by retiredflyboy » Mon Sep 09, 2019 4:40 pm

To increase equity exposure with Vanguard, the Total Stock Market Index Fund gives you instant diversification with extremely low fees in a very tax efficient manner.
Facts are stubborn things. Everything works until it doesn’t.

delamer
Posts: 8688
Joined: Tue Feb 08, 2011 6:13 pm

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by delamer » Mon Sep 09, 2019 4:57 pm

You could just use your savings each year to add to your stock position and leave your cash as is. If you keep saving each year, you’ll need to eventually put money in bonds to keep your preferred allocation.

Just a FYI, while are numbers are somewhat different than yours, husband and I are in much the same position as you two. Pensions/Social Security are much higher than our expenses. Plus we have a significant nest egg.

We have stock allocation of 70% in our retirement funds with an eye toward maximizing the kids’ inheritance. Just something to consider.

User avatar
oldcomputerguy
Moderator
Posts: 5564
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods in East Tennessee

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by oldcomputerguy » Tue Sep 10, 2019 4:53 am

A couple of off-topic comments with political implications were removed. See Politics and Religion:
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited.
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

Chadnudj
Posts: 797
Joined: Tue Oct 29, 2013 11:22 am

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by Chadnudj » Tue Sep 10, 2019 5:08 am

ohai wrote:
Mon Sep 09, 2019 4:36 pm
The pensions are like a fixed income asset, which means that you can probably tolerate a rather high exposure to equities or other risky asset. Even higher than 50% would be fine, if you had appetite for that risk.
I'd second this post. With those pensions ($100k) essentially covering twice your annual spending ($50k) with little to no risk, you have a higher ability to take risk than many investors in retirement. Shifting to a higher equity or stock allocation in your portfolio would/could be lucrative to the surviving spouse and/or heirs/charities you decide to support down the line, or allow you to both travel more/more comfortably or live a bit more lavishly/comfortably.

I wouldn't go 100% stocks or anything, but certainly 50% or 60% stocks (in diversified index funds) would be more than appropriate in your situation. And if you didn't want to shift all at once, I'd just set all future contributions to investment accounts to stocks, and let your current stock/bond holdings reinvest dividends to keep them growing -- this will eventually over time let the stock portion of your portfolio creep upwards, while giving you some dollar-cost averaging comfort.

User avatar
Wiggums
Posts: 1345
Joined: Thu Jan 31, 2019 8:02 am

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by Wiggums » Tue Sep 10, 2019 6:19 am

Congratulations. You are doing well.

I wouldn’t change a thing if you are happy. I agree that you could hold more equities. Nothing crazy, but even 50/50 is still conservative.

Good luck to you...

Topic Author
debrajo61
Posts: 33
Joined: Sat Mar 08, 2014 9:57 pm

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by debrajo61 » Tue Sep 10, 2019 9:16 am

i appreciate all of this great advice and feel better hearing we seem to have our money pretty much where it should be. i am going to stick with leaving everything as it is now and begin adding to the taxable Vanguard Total Stock Market Index monthly, around 25% of our monthly pension check/around $2,000 a month and will consider keeping this going to get up closer 50% equities in this fund. I do see that logic and feel more comfortable doing so now that we have been retired three years and can see how our retirement finances are playing out (have always known we should have more in equities, but have always been conservative, and even though we have been, its working in retirement so we are pleased). We should hit about 40% equities in 6 years and if we go to 50% it take several more years which I'm comfortable with. Slow but steady progress. Let me know if this sounds like a good way to approach things for the coming years assuming things keep going as they are now with "life". Thanks again.

Chadnudj
Posts: 797
Joined: Tue Oct 29, 2013 11:22 am

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by Chadnudj » Tue Sep 10, 2019 3:14 pm

debrajo61 wrote:
Tue Sep 10, 2019 9:16 am
I do see that logic and feel more comfortable doing so now that we have been retired three years and can see how our retirement finances are playing out (have always known we should have more in equities, but have always been conservative, and even though we have been, its working in retirement so we are pleased). We should hit about 40% equities in 6 years and if we go to 50% it take several more years which I'm comfortable with. Slow but steady progress. Let me know if this sounds like a good way to approach things for the coming years assuming things keep going as they are now with "life". Thanks again.
Don't apologize -- your "conservative" approach won the game for you, and now you are in a great position to even grow your wealth in retirement. You've got a great approach, and know what you're doing. Enjoy your (hopefully healthy and happy) retirement!

elainet7
Posts: 261
Joined: Sat Dec 08, 2018 1:52 pm

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by elainet7 » Tue Sep 10, 2019 4:55 pm

How do you spend only 50k/yr

Topic Author
debrajo61
Posts: 33
Joined: Sat Mar 08, 2014 9:57 pm

Re: Retired Couple Age 60, Looking for Input and Suggestions on Current Portfolio Please

Post by debrajo61 » Tue Sep 10, 2019 7:02 pm

No debt. Not an extravagant lifestyle, but we don't go without what we want either. Like I said, some years are different if there is a bigger purchase... some not so much and $50k is pretty easy to do for two healthy retirees. Health insurance is already deducted from our 100k combined pension. The biggies $ are property taxes, winters in St. Pete Beach, and other vacations we may take. I included all of that in the $50k.

Post Reply