Please review and offer advice

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Topic Author
RVohioken
Posts: 3
Joined: Thu Nov 07, 2019 8:09 pm

Please review and offer advice

Post by RVohioken » Thu Nov 07, 2019 8:43 pm

Fairly new to the forum, looking forward to your advice. Hopefully I submitted all the information needed. Sold our house and we are traveling across the USA for the next couple years in a new 2019 truck/5th wheel trailer combo. We budget $50k spending/year which is why our emergency fund is 3 years (but is silly I realize). Worked Q1 2019 so tax rate this year is locked, but I don't know it. Since we will have little income next few years, don't expect much tax. Will consider Roth conversions if it makes sense. Using health care ministry now but could go to obama care? Last kid graduates college 2020 (529's cover).


Emergency fund/cash 3 years +
debt none
tax filing married jointly
tax rate ?
state of residence Ohio
age 51/52
desired allocation ?

taxable investments - vanguard
% investments
VDIGX 14% dividend growth
VGIAX 13% growth and income admiral shares

His 401k, some roth but can't see on Fidelity site, probably 20%. Retired now
TBCIX 5% t rowe price blue chip growth fund I class
FXAIX 5% fidelity 500 index fund

His rollover IRA at vanguard - traditional
VFIAX 18% 500 index admiral shares
VGIAX 13% growth and income admiral shares
VBILX 13% intermediate term bond index admiral shares
VWILX 13% international growth fund admiral shares

His rollover IRA at vanguard - Roth
VTSAX 4% total stock market index

Health savings account - Key bank from old work
MCGWX 1% mfs growth allocation fund class c
cash 1%

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David Jay
Posts: 7133
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Please review and offer advice

Post by David Jay » Thu Nov 07, 2019 10:14 pm

Welcome to the forum!

Congrats on full-timing, I also retired in January and we took a 10 week RV trip to the West Coast from Michigan (also a 5er).

Your portfolio is pretty good - Could be simplified and a couple of expensive funds, but nothing “dangerous”.

You might be a little bit stock-heavy, you are at peak sequence-of-returns risk right now and many would recommend something closer to 50/50 equity/bonds (include your cash in the bond pile). What would your retirement plan look like if all of your stocks lost 50% of their value next week?
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

Miriam2
Posts: 2662
Joined: Fri Nov 14, 2014 11:51 am

Re: Please review and offer advice

Post by Miriam2 » Fri Nov 08, 2019 10:38 pm

RVohioken wrote: Fairly new to the forum, looking forward to your advice. Hopefully I submitted all the information needed. Sold our house and we are traveling across the USA for the next couple years in a new 2019 truck/5th wheel trailer combo.
Welcome to the Bogleheads!
RVohioken wrote:We budget $50k spending/year which is why our emergency fund is 3 years (but is silly I realize).
Not silly to me :D
RVohioken wrote:Worked Q1 2019 so tax rate this year is locked, but I don't know it. Since we will have little income next few years, don't expect much tax. Will consider Roth conversions if it makes sense. Using health care ministry now but could go to obama care? Last kid graduates college 2020 (529's cover). . . .
This is where I would start -

(1) Where are your income streams, meaning, how is your retirement money coming in? Pensions, annuities, withdrawals from investments, dividends from your taxable account, inheritance?

(2) Your budget of $50k spending/year - is that for necessities or does it include fun also, how much? What is the difference between income and outflow?

(3) What do you believe your current asset allocation between stocks and bonds is and why did you select that allocation?

(4) Can you stay on the open road if your portfolio drops 20-30% in a bear market this next year?
Last edited by Miriam2 on Sat Nov 09, 2019 5:36 am, edited 1 time in total.

HomeStretch
Posts: 2503
Joined: Thu Dec 27, 2018 3:06 pm

Re: Please review and offer advice

Post by HomeStretch » Fri Nov 08, 2019 11:07 pm

Welcome!

Ohio has a state income tax. As you are traveling full-time for the next couple years, have you considered becoming a no-tax state resident especially if you plan to have taxable income due to Roth conversions?

3 years of cash as an emergency fund is fine (it’s a personal decision). Hopefully it is in a high yield savings account or Vanguard money market fund.

Your asset allocation at 87/13 seems aggressive at your age/in early retirement.

Some of your U.S. and International equity growth funds have higher ERs ranging from 0.22% to 0.57% (VDIGX, VGIAX, TBCIX, VWILX). You could instead hold Vanguard U.S. and International total stock market funds with lower ERs (VTSAX 0.04% and VTIAX 0.11%).

Your Key Bank HSA account holding MCGWX has a very high ER 1.76% and 1% load. Consider transferring your account to a Fidelity HSA with no account fees and low ER investment choices.

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Brianmcg321
Posts: 244
Joined: Mon Jul 15, 2019 8:23 am

Re: Please review and offer advice

Post by Brianmcg321 » Sat Nov 09, 2019 9:00 am

Roll his 401k into an IRA. This will save you some fees, and you can simplify the portfolio.

Get an HSA with Fidelity so you can put that money in something with lower fees.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.

Topic Author
RVohioken
Posts: 3
Joined: Thu Nov 07, 2019 8:09 pm

Re: Please review and offer advice

Post by RVohioken » Sat Nov 09, 2019 4:26 pm

Thanks for the initial replies. Few answers.

Staying in Ohio for instate college rate right now. Since we will have little income, only taxable investment earning, not worrying about taxes.

We will have no income. Living off 3 year emergency fund first couple years. Then, expect to cash out some taxable investments to live on each year. If at 59.5 we will consider taking some of that. Future part time work too if we are bored.

Yes, we can live easily if stock market drops a lot. Worse case, we could always go back to work.

Main reason I haven't rolled Fidelity 401K is because I read a 401K cannot be taken in a lawsuit like an IRA can. I guess I could just get an umbrella liability policy instead. We still have one child on our car insurance. When that kid falls off next June, my lawsuit risk drops a little.

$50k budget covers $8k health/auto insurance, travel costs, fun, charity, gift giving, etc. It was close to our pre retirement discretionary budget so we kept it pretty lenient in our new post working life.

Our emergency fund is in simple bank savings/checking accounts. Need to move it, lazy on my part.

I did not realize I could move HSA. I know KeyBank one is not great, but I thought it was only option.

I had 0% bonds before reading the forum, just moved 13% a month or so ago. I followed Dave Ramsey 100% stocks for years. I will consider bumping to 25%.

123
Posts: 5114
Joined: Fri Oct 12, 2012 3:55 pm

Re: Please review and offer advice

Post by 123 » Sat Nov 09, 2019 4:34 pm

RVohioken wrote:
Sat Nov 09, 2019 4:26 pm
...Future part time work too if we are bored...
Depending on your profession/experience the longer you are away from the work force the more difficult it becomes to step back into it. If you're open to other employment possibilities and earnings are not a priority it's easier.
The closest helping hand is at the end of your own arm.

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Wiggums
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Joined: Thu Jan 31, 2019 8:02 am

Re: Please review and offer advice

Post by Wiggums » Sat Nov 09, 2019 6:46 pm

Welcome to the forum and congratulations on your retirement.

I would do something with the expensive fund with the load. Also, the low interest bearing emergency fund. A quick change of banks is easy and free money that you deserve.

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Wiggums
Posts: 1708
Joined: Thu Jan 31, 2019 8:02 am

Re: Please review and offer advice

Post by Wiggums » Sat Nov 09, 2019 8:11 pm

RVohioken wrote:
Thu Nov 07, 2019 8:43 pm
Using health care ministry now but could go to obama care?
I have not heard of health sharing before. Its not an insurance company, so It sounds like the medical provider is treating you as uninsured. I was curious if you have any experience in submitting major medical expenses as their turn around is 120 days. It seems like you would have to be on a payment schedule with the medical provider while you wait for check to come from health care ministry.

I see that Dave Ramsey recommends them and yet he does not use them because his company provides low cost insurance.

Topic Author
RVohioken
Posts: 3
Joined: Thu Nov 07, 2019 8:09 pm

Re: Please review and offer advice

Post by RVohioken » Sun Nov 10, 2019 8:46 pm

For the health care, I am fortunate that we have not had to make any claims, so I cannot comment yet. Since I have a HSA and strong emergency fund, I am not worried waiting for reimbursement.

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