Is this a good portfolio mix for a retiree?

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Topic Author
ricks1433
Posts: 7
Joined: Thu Sep 19, 2019 6:46 pm

Is this a good portfolio mix for a retiree?

Post by ricks1433 » Thu Sep 19, 2019 7:00 pm

Hello,

I'm looking for a simple 2-4 ETF Fund strategy for a retiree with cash sitting in the bank and currently not invested. Need something simple.

Age: 67 and retired
Funds: low seven figures all in cash now.
Income: none
Debt: none
Six month emergency fund: already funded



Here's where I plan on investing:

VTI - 30%. - US TOTAL MARKET STOCKS ETF
BND - 50%. - US TOTAL MARKET BONDS ETF
VIG - 15% - Dividend Stocks ETF
VXUS 5% - International Stocks ETF

Is this a good approach or any better recommendations/strategy/mix? Need something fairly conservative but not too conservative. Maybe a 4 on 1-10 scale. Was going to take all cash (except for 6 months of emergency) and put into the above mix and then extract 4% annually (.0033 each month).
Last edited by ricks1433 on Thu Sep 19, 2019 7:38 pm, edited 4 times in total.

HomeStretch
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Re: Is this a good portfolio mix for a retiree?

Post by HomeStretch » Thu Sep 19, 2019 7:17 pm

Welcome!

A 50/50 equity/bond asset allocation, 6-month emergency fund and a 4% withdrawal rate are all reasonable.

For the best feedback, suggest you edit your original post to use the “Asking Portfolio Questions” format using the pencil icon in the upper right corner.
https://www.bogleheads.org/wiki/Asking_ ... _questions

Topic Author
ricks1433
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Re: Is this a good portfolio mix for a retiree?

Post by ricks1433 » Thu Sep 19, 2019 8:45 pm

Thanks. I updated the post a bit.

bltn
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Re: Is this a good portfolio mix for a retiree?

Post by bltn » Thu Sep 19, 2019 9:06 pm

I think that plan wii do fine. With interest rates as low as they are I would think more short term with my bond funds for now.

lakpr
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Re: Is this a good portfolio mix for a retiree?

Post by lakpr » Fri Sep 20, 2019 8:30 am

Perhaps that portfolio could be a bit more optimized? The Dividend stocks are already within the S&P500 index, so you are essentially over-weighting them. I would reduce it to the simpler 3-fund portfolio, with 50:50 ratio, and 20% of the stock allocation to international.

VTI - 40%. - US TOTAL MARKET STOCKS ETF
VXUS 10% - International Stocks ETF
BND - 50%. - US TOTAL MARKET BONDS ETF

RevFran
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Re: Is this a good portfolio mix for a retiree?

Post by RevFran » Fri Sep 20, 2019 5:08 pm

A bit more international than 5%?

stlutz
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Re: Is this a good portfolio mix for a retiree?

Post by stlutz » Fri Sep 20, 2019 5:17 pm

As a retiree, your "deep risk" is inflation. Not saying high inflation is likely (I don't think it is), but that if it happens, it's a bigger problem in your situation. As such, you may want to consider including inflation-protected bonds in your asset mix.

Conventional wisdom here is to have 1/4 to 1/2 of your stocks in international--the US has done better recently but that tends to run in cycles.

So, if you are keeping to 4 funds or less, one possible approach would be:

30% BND (total bond)
25% SCHP (Schwab TIPS ETF)
30% VTI
15% VXUS

This would have about the same volatility level as your original proposal.

dbr
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Re: Is this a good portfolio mix for a retiree?

Post by dbr » Fri Sep 20, 2019 5:28 pm

I'm not suggesting some kind of idea portfolio, but along with the others my suggestions would be:

1. No need for VIG.

2. More in international, say 30% of stocks for sake of specificity.

3. Half your bond allocation in a TIPS fund.

Northern Flicker
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Re: Is this a good portfolio mix for a retiree?

Post by Northern Flicker » Fri Sep 20, 2019 5:40 pm

35% VTI
15% IXUS (more tax-efficient than VXUS)
25% VGIT
25% SCHP

Intermediate corporate bonds have had a moderately high correlation to intermediate TIPS in the past. If using total bond index I would thus prefer a short-term TIPS fund. But intermediate treasuries are a better diversifier of equity risk than a bond index so this will offset the somewhat higher risk of non-US equities at a higher allocation level.

Do you have assets in any tax-qualified accounts? If so, those and the taxable account should be wrapped into one portfolio with tax-efficient asset location mapping determined.
Risk is not a guarantor of return.

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ruralavalon
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Location: Illinois

Re: Is this a good portfolio mix for a retiree?

Post by ruralavalon » Sat Sep 21, 2019 10:01 am

ricks1433 wrote:
Thu Sep 19, 2019 7:00 pm
Hello,

I'm looking for a simple 2-4 ETF Fund strategy for a retiree with cash sitting in the bank and currently not invested. Need something simple.

Age: 67 and retired
Funds: low seven figures all in cash now.
Income: none
Debt: none
Six month emergency fund: already funded



Here's where I plan on investing:

VTI - 30%. - US TOTAL MARKET STOCKS ETF
BND - 50%. - US TOTAL MARKET BONDS ETF
VIG - 15% - Dividend Stocks ETF
VXUS 5% - International Stocks ETF

Is this a good approach or any better recommendations/strategy/mix? Need something fairly conservative but not too conservative. Maybe a 4 on 1-10 scale. Was going to take all cash (except for 6 months of emergency) and put into the above mix and then extract 4% annually (.0033 each month).
Not a bad idea at all, a 50/50 asset allocation and a 4% withdrawal rate at age 67.


lakpr wrote:
Fri Sep 20, 2019 8:30 am
Perhaps that portfolio could be a bit more optimized? The Dividend stocks are already within the S&P500 index, so you are essentially over-weighting them. I would reduce it to the simpler 3-fund portfolio, with 50:50 ratio, and 20% of the stock allocation to international.

VTI - 40%. - US TOTAL MARKET STOCKS ETF
VXUS 10% - International Stocks ETF
BND - 50%. - US TOTAL MARKET BONDS ETF
My suggestion as well.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

dandinsac
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Re: Is this a good portfolio mix for a retiree?

Post by dandinsac » Sat Sep 21, 2019 10:17 am

If simple is the primary goal, consider these funds, which have about 50% invested in stocks:

Vanguard Tax-Managed Balanced Fund Admiral Shares (VTMFX)
Vanguard Managed Payout Fund (VPGDX)

lakpr
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Re: Is this a good portfolio mix for a retiree?

Post by lakpr » Sat Sep 21, 2019 10:30 am

dandinsac wrote:
Sat Sep 21, 2019 10:17 am
If simple is the primary goal, consider these funds, which have about 50% invested in stocks:

Vanguard Tax-Managed Balanced Fund Admiral Shares (VTMFX)
Vanguard Managed Payout Fund (VPGDX)
Based on the selection of ETFs in the first post, I believe the OP is looking for an index-based portfolio rather than actively managed fund. Both the suggestions above are actively managed. Not bad suggestions at all, just pointing out the philosophical differences

retiredflyboy
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Re: Is this a good portfolio mix for a retiree?

Post by retiredflyboy » Sun Sep 22, 2019 12:33 am

I think 2 fund is also fine. Total stock index and total bond index. Lots of the stocks have international exposure.
Facts are stubborn things. Everything works until it doesn’t.

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patrick013
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Re: Is this a good portfolio mix for a retiree?

Post by patrick013 » Sun Sep 22, 2019 7:42 am

ricks1433 wrote:
Thu Sep 19, 2019 7:00 pm

VTI - 30%. - US TOTAL MARKET STOCKS ETF
BND - 50%. - US TOTAL MARKET BONDS ETF
VIG - 15% - Dividend Stocks ETF
VXUS 5% - International Stocks ETF
I'd replace VIG with VPU for stability. LC's already have substantial foreign revenues. I'd replace VXUS with an EM index at no higher than 10% AA. It's a good VG portfolio.
age in bonds, buy-and-hold, 10 year business cycle

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dwickenh
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Location: Illinois

Re: Is this a good portfolio mix for a retiree?

Post by dwickenh » Sun Sep 22, 2019 8:40 am

ruralavalon wrote:
Sat Sep 21, 2019 10:01 am
ricks1433 wrote:
Thu Sep 19, 2019 7:00 pm
Hello,

I'm looking for a simple 2-4 ETF Fund strategy for a retiree with cash sitting in the bank and currently not invested. Need something simple.

Age: 67 and retired
Funds: low seven figures all in cash now.
Income: none
Debt: none
Six month emergency fund: already funded



Here's where I plan on investing:

VTI - 30%. - US TOTAL MARKET STOCKS ETF
BND - 50%. - US TOTAL MARKET BONDS ETF
VIG - 15% - Dividend Stocks ETF
VXUS 5% - International Stocks ETF

Is this a good approach or any better recommendations/strategy/mix? Need something fairly conservative but not too conservative. Maybe a 4 on 1-10 scale. Was going to take all cash (except for 6 months of emergency) and put into the above mix and then extract 4% annually (.0033 each month).
Not a bad idea at all, a 50/50 asset allocation and a 4% withdrawal rate at age 67.




lakpr wrote:
Fri Sep 20, 2019 8:30 am
Perhaps that portfolio could be a bit more optimized? The Dividend stocks are already within the S&P500 index, so you are essentially over-weighting them. I would reduce it to the simpler 3-fund portfolio, with 50:50 ratio, and 20% of the stock allocation to international.

VTI - 40%. - US TOTAL MARKET STOCKS ETF
VXUS 10% - International Stocks ETF
BND - 50%. - US TOTAL MARKET BONDS ETF
My suggestion as well.
Ditto +1
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

cognovimus
Posts: 71
Joined: Sat Aug 10, 2019 1:07 pm

Re: Is this a good portfolio mix for a retiree?

Post by cognovimus » Sun Sep 22, 2019 9:13 am

Could someone post the analogous funds at Fidelity? (Taking some baby steps, hoping to consolidate many funds into 3 as well.)

Thx.

ClaycordJCA
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Location: SF Bay Area

Re: Is this a good portfolio mix for a retiree?

Post by ClaycordJCA » Sun Sep 22, 2019 10:20 am

cognovimus wrote:
Sun Sep 22, 2019 9:13 am
Could someone post the analogous funds at Fidelity? (Taking some baby steps, hoping to consolidate many funds into 3 as well.)

Thx.
For Fidelity mutual funds:

FSKAX - Total US Stock (or FZROX if you wish to use their zero ER fund)
FTIHX - Total International Index (or FZILX for zero ER)
FXNAX - Total US Bond Index

In a taxable account, consider the ITOT eft for Total US and IXUS for Total international because of their better tax efficiency. They trade for free at Fidelity. I assume your bonds will be in tax advantaged, for which FTBFX is fine.

(Edited to correct Total Bond Index ticker.)
Last edited by ClaycordJCA on Sun Sep 22, 2019 10:41 am, edited 1 time in total.

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ruralavalon
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Re: Is this a good portfolio mix for a retiree?

Post by ruralavalon » Sun Sep 22, 2019 10:34 am

ClaycordJCA wrote:
Sun Sep 22, 2019 10:20 am
cognovimus wrote:
Sun Sep 22, 2019 9:13 am
Could someone post the analogous funds at Fidelity? (Taking some baby steps, hoping to consolidate many funds into 3 as well.)

Thx.
For Fidelity mutual funds:

FSKAX - Total US Stock (or FZROX if you wish to use their zero ER fund)
FTIHX - Total International Index (or FZILX for zero ER)
FTBFX - Total US Bond Index wrong

In a taxable account, consider the ITOT eft for Total US and IXUS for Total international because of their better tax efficiency. They trade for free at Fidelity. I assume your bonds will be in tax advantaged, for which FTBFX is fine.
Instead of the actively managed, higher expense ratio, fund Fidelity® Total Bond Fund (FTBFX) ER 0.45%, use their total bond market index fund, with a low expense ratio, which is Fidelity® US Bond Index (FXNAX) ER 0.025%.
Last edited by ruralavalon on Sun Sep 22, 2019 10:38 am, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

ClaycordJCA
Posts: 304
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Location: SF Bay Area

Re: Is this a good portfolio mix for a retiree?

Post by ClaycordJCA » Sun Sep 22, 2019 10:38 am

ruralavalon wrote:
Sun Sep 22, 2019 10:34 am
ClaycordJCA wrote:
Sun Sep 22, 2019 10:20 am
cognovimus wrote:
Sun Sep 22, 2019 9:13 am
Could someone post the analogous funds at Fidelity? (Taking some baby steps, hoping to consolidate many funds into 3 as well.)

Thx.
For Fidelity mutual funds:

FSKAX - Total US Stock (or FZROX if you wish to use their zero ER fund)
FTIHX - Total International Index (or FZILX for zero ER)
FTBFX - Total US Bond Index wrong
In a taxable account, consider the ITOT eft for Total US and IXUS for Total international because of their better tax efficiency. They trade for free at Fidelity. I assume your bonds will be in tax advantaged, for which FTBFX is fine.
Instead of the actively managed, higher expense ratio, fund Fidelity® Total Bond Fund (FTBFX) ER 0.45%, use their total bond market index fund, with a low expense ratio, which is Fidelity® US Bond Index (FXNAX) ER 0.025%.
My mistake. Thanks for catching. Original post has been corrected.

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1789
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Re: Is this a good portfolio mix for a retiree?

Post by 1789 » Sun Sep 22, 2019 12:38 pm

For 50/50 i would go with

Us total stock and US total bond markets
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Trader Joe
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Re: Is this a good portfolio mix for a retiree?

Post by Trader Joe » Sun Sep 22, 2019 12:48 pm

ricks1433 wrote:
Thu Sep 19, 2019 7:00 pm
Hello,

I'm looking for a simple 2-4 ETF Fund strategy for a retiree with cash sitting in the bank and currently not invested. Need something simple.

Age: 67 and retired
Funds: low seven figures all in cash now.
Income: none
Debt: none
Six month emergency fund: already funded



Here's where I plan on investing:

VTI - 30%. - US TOTAL MARKET STOCKS ETF
BND - 50%. - US TOTAL MARKET BONDS ETF
VIG - 15% - Dividend Stocks ETF
VXUS 5% - International Stocks ETF

Is this a good approach or any better recommendations/strategy/mix? Need something fairly conservative but not too conservative. Maybe a 4 on 1-10 scale. Was going to take all cash (except for 6 months of emergency) and put into the above mix and then extract 4% annually (.0033 each month).
No. I recommend 60% VTSAX and 40% VBTLX.

Topic Author
ricks1433
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Re: Is this a good portfolio mix for a retiree?

Post by ricks1433 » Wed Oct 09, 2019 5:17 am

This site is awesome! Thank you all very much for the recommendations! :D :D :D

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tennisplyr
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Re: Is this a good portfolio mix for a retiree?

Post by tennisplyr » Wed Oct 09, 2019 12:33 pm

I'm roughly where you are proposing--retired 8 years, late sixties, no debt.
Those who move forward with a happy spirit will find that things always work out.

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