Get Rid of FA. Create Single Fund Retirement Portfolio

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eastreal
Posts: 1
Joined: Sat Sep 07, 2019 1:11 pm

Get Rid of FA. Create Single Fund Retirement Portfolio

Post by eastreal » Wed Sep 11, 2019 5:18 pm

We are a soon-to-be retired couple preparing for his $120,000 income to end in December. Current living expenses are $5,000 excluding any travel / vacation expenses which we plan on increasing soon. Our only debt is a $145,000 mortgage balance to be paid over the next 12 years. She plans on working for another year and a half and expects to earn $60,000 - $70,000 during that time. When we are fully retired our income from SS, pensions, and savings income will be approximately $84,000 a year before taxes. We have retirement accounts with approximately $1,100,000 invested by a financial advisor who charges 1% of funds managed. We have non-retirement funds of approximately $180,000 mostly in a savings account. Our goals are to
1) Get rid of our FA.
2) Open retirement accounts at Vanguard and roll our TD Ameritrade retirement accounts into them.
3) Simplify our retirement portfolio drastically. (I don’t like the number of funds our FA has us invested in.
4) Reduce investment costs. (I find the ERs on some of the funds we are in are high.)
5) Invest more for income than growth.

Emergency funds: 3+ months living expenses

Debt: 145K mortgage loan at 3.5% - 12 years to payoff. Home value ~ $450,000.

Tax Filing Status: Married filing jointly. No dependents

Tax Rate: 12% (projected) Federal, 0% State

State of Residence: Texas

Age: He 62. Retiring Dec 2019. Social Security of $2211 at age 62 ½. Pension income of $2418 at age 63.
She 63 ½. Self-employed until Mar. 2021. Social Security of $2237 at age 65.

Desired Asset allocation: 30% stocks / 60% bonds
Desired International allocation: 10% of stocks

Current total portfolio is low 7 figures. (<1.3mm)

Current retirement assets

Taxable
11.35xx% cash (4% 1 yr CD @ 2.85% matures 5/20, 7.5% savings account @ 2%)
4.1% Dimension TA US Core Equity 2 (DFCTX) (.24% ER)
1.5% AT&T (T)

His Roth IRA at TD Ameritrade Institutional
0.26% Money Market
0.41% Vanguard Intermediate-Term Bond Index Fund Admiral (VBILX) (.07% ER)
0.64% Dimensional Emerging Markets Core Equity Portfolio (I) (DFCEX) (.52% ER)
2.22% Dimensional Real Estate Securities Portfolio (I) (DFREX) (.18% ER)
1.65% PIMCO Commodity Real Return Strategy (PCRIX) (1.46% ER)

His Rollover IRA at TD Ameritrade Institutional
0.60% Money Market
8.0% Dimensional Short-Term Extended Quality Portfolio (DFEQX) (.22% ER)
6.25% Dimensional Five-Year Global Fixed Income Portfolio (I) (DFGBX) (.27% ER)
13.53% Vanguard Intermediate-Term Bond Index Fund Admiral (VBILX) (.07% ER)
8.47% Loomis Sayles Bond Fund Institutional (LSBDX) (.66% ER)
9.82% Dimensional US Core Equity 2 Portfolio (I) (DFQTX) (.22% ER)
8.29% Dimensional International Core Equity Portfolio (I) (DFIEX) (.30% ER)
0.42% PIMCO Commodity Real Return Strategy (PCRIX) (1.46% ER)

Her Roth IRA at TD Ameritrade Institutional
0.34% Money Market
3.39% Dimensional Emerging Markets Core Equity Portfolio (I) (DFCEX) (.52% ER)

Her Rollover IRA at TD Ameritrade Institutional
0.28% Money Market
5.90% Dimensional US Core Equity 2 Portfolio (I) (DFQTX) (.22% ER)

Her SEP IRA at TD Ameritrade Institutional
0.42% Money Market
1.06% Loomis Sayles Bond Fund Institutional (LSBDX) (.66% ER)
9.74% Dimensional US Core Equity 2 Portfolio (I) (DFQTX) (.22% ER)
_______________________________________________________________
Note: Total percentage of all the above accounts together (not each account individually) should equal 100%.


New annual Contributions
None


Questions

1. Firstly, do my wife and I have enough to retire on? We don’t spend wildly on anything much. We will probably spend more on travel and vacations and are talking about possibly buying a small, used motorhome. We are also considering a move to the Florida panhandle.

2. I am considering a single fund portfolio for all our retirement funds. Is this wise? The Vanguard funds I am considering are Vanguard LifeStrategy Conservative Growth (VSCGX), Vanguard Wellesley Income Fund Admiral Shares (VWIAX), and Vanguard Target Retirement Income (VTINX).

3. How do we take income from our IRAs?

I am leaning toward VTINX as I like that it’s an index fund and holds a TIPS component. Any other advice on ditching the financial adviser and investing our retirement funds ourselves?

This is my first time posting on Bogleheads, so apologies if the format of the post is not right.

[Edited to touch up formatting -- mod oldcomputerguy]

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

Re: Get Rid of FA. Create Single Fund Retirement Portfolio

Post by elainet7 » Wed Sep 11, 2019 8:01 pm

Fire the advisor
Use your allocation for vanguard total stock, bond and intl

HomeStretch
Posts: 1425
Joined: Thu Dec 27, 2018 3:06 pm

Re: Get Rid of FA. Create Single Fund Retirement Portfolio

Post by HomeStretch » Wed Sep 11, 2019 8:08 pm

Agree with getting rid of FA. Invest in one fund (LifeStrategy or Target Date Fund) or a simple 3-fund portfolio in low-cost stock and bond total market funds.

What are your projected annual total retirement expenses including healthcare, travel and income taxes?

You mention SS before full retirement age at 62-1/2 for you and age 65 for spouse. Have you looked into the best SS-claiming strategy? It might mean claiming at age 70 for the high earner for the maximum benefit indexed for inflation and claiming at an earlier age for the other.

Does the pension receive cost-of-living adjustments?
Last edited by HomeStretch on Wed Sep 11, 2019 8:17 pm, edited 2 times in total.

Dottie57
Posts: 6701
Joined: Thu May 19, 2016 5:43 pm

Re: Get Rid of FA. Create Single Fund Retirement Portfolio

Post by Dottie57 » Wed Sep 11, 2019 8:14 pm

How firm is your knowledge of expenses? Do they include medical insurance and taxes - two fairly large items?

You look like you will have about 6.8k monthly $ From SS and pension.

Looks like you will be fine.

User avatar
Mlm
Posts: 413
Joined: Sat Apr 09, 2016 6:00 pm

Re: Get Rid of FA. Create Single Fund Retirement Portfolio

Post by Mlm » Wed Sep 11, 2019 8:16 pm

Is there a reason to take SS @ 62.5? That doesn't seem optimal considering your investments.

prioritarian
Posts: 38
Joined: Tue Jul 16, 2019 6:00 pm

Re: Get Rid of FA. Create Single Fund Retirement Portfolio

Post by prioritarian » Thu Sep 12, 2019 1:35 pm

eastreal wrote:
Wed Sep 11, 2019 5:18 pm
1. Firstly, do my wife and I have enough to retire on? We don’t spend wildly on anything much. We will probably spend more on travel and vacations and are talking about possibly buying a small, used motorhome. We are also considering a move to the Florida panhandle.

2. I am considering a single fund portfolio for all our retirement funds. Is this wise? The Vanguard funds I am considering are Vanguard LifeStrategy Conservative Growth (VSCGX), Vanguard Wellesley Income Fund Admiral Shares (VWIAX), and Vanguard Target Retirement Income (VTINX).

3. How do we take income from our IRAs?

I am leaning toward VTINX as I like that it’s an index fund and holds a TIPS component. Any other advice on ditching the financial adviser and investing our retirement funds ourselves?

This is my first time posting on Bogleheads, so apologies if the format of the post is not right.

[Edited to touch up formatting -- mod oldcomputerguy]
1. Given that SS and pension cover your expenses, I'd say definitely

2. Single fund portfolios are great for those who do not want to spend the time needed to rebalance periodically. the lifestrategy and target funds have lower costs so I'd recommend those. (For an active fund Wellesley is conservative enough that it's also a decent choice.)

3. Not sure what you mean here.

prioritarian
Posts: 38
Joined: Tue Jul 16, 2019 6:00 pm

Re: Get Rid of FA. Create Single Fund Retirement Portfolio

Post by prioritarian » Thu Sep 12, 2019 1:35 pm

duplicate post.

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