Asset Allocation 10 Years Out to Retirement at 55

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Kintora
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Asset Allocation 10 Years Out to Retirement at 55

Post by Kintora »

Hoping some of you can please give me feedback to make sure my plan is sound or if it needs tweaking.

I am currently 45 and hope to retire early somewhere around 55.
I currently have about $500k in my portfolio and hope to have around $1 million or more when I retire.
My SWR could be 3% or so, as $30,000/year should be OK for me retiring to a low cost of living country or area.
I could "semi-retire" at that time and still work a PT or FT low stress job if I need or want to for a while for extra income.
Not included in my portfolio numbers above is my HSA which I started this year and hope to max each year for 10 years for health costs buffer.

I just moved my portfolio over from Edward Jones to Vanguard and I am about to reallocate stocks/bonds.
My tentative plan is to go 70/30 stocks/bonds now at age 45 and increase bonds by 1% each year until at 55 I would be 60/40.
I could then stay at 60/40 until I start drawing SS which could be at anywhere from age 62 to 70 depending on if I need the income or not. Then switch to 50/50 for remainder of my life or slightly increase bonds as I age.

As long as I can maintain my current level of income for the next 10 years (around $60k/year) I should be able to max yearly contributions to 401k, Roth IRA and HSA for the next 10 years leading to retirement or semi-retirement.

Thoughts? Too conservative? Too aggressive? About right? Do you think this is a sound AA plan or any problems that anyone can see with this plan? I think I am fairly risk tolerant and can stick to my plan in downturns. I sincerely appreciate any and all feedback.
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retired@50
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Re: Asset Allocation 10 Years Out to Retirement at 55

Post by retired@50 »

The plan you've outlined in your post seems reasonable. If you can stick to a 3% withdrawal rate, you'll be in fine shape.

Can we presume you're using the Three-Fund Portfolio? If not, you may be putting your $1 million goal in jeopardy.

Regards,
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Chris K Jones
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Re: Asset Allocation 10 Years Out to Retirement at 55

Post by Chris K Jones »

It seems well thought out to me and the asset allocations seem reasonable. My only concern is that, if you live to 95, 40 years retirement is a long time and 30 k per year is not a lot of money. Your backup plan for a low stress job helps. The big bugaboo, however, is healthcare expenses, especially until you reach Medicare age. Otherwise, I like it.
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Kintora
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Location: Fargo, ND

Re: Asset Allocation 10 Years Out to Retirement at 55

Post by Kintora »

retired@50 wrote: Sun Feb 02, 2020 12:34 am The plan you've outlined in your post seems reasonable. If you can stick to a 3% withdrawal rate, you'll be in fine shape.

Can we presume you're using the Three-Fund Portfolio? If not, you may be putting your $1 million goal in jeopardy.

Regards,
Thank you for your reply. I am using three funds. Total US Stock Market and Total International Stock Market with an 80/20 split there. For bonds, Total US Bond Market. All Vanguard funds.
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Kintora
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Location: Fargo, ND

Re: Asset Allocation 10 Years Out to Retirement at 55

Post by Kintora »

Chris K Jones wrote: Sun Feb 02, 2020 12:34 am It seems well thought out to me and the asset allocations seem reasonable. My only concern is that, if you live to 95, 40 years retirement is a long time and 30 k per year is not a lot of money. Your backup plan for a low stress job helps. The big bugaboo, however, is healthcare expenses, especially until you reach Medicare age. Otherwise, I like it.
Yes, health care as I age is always a concern. Hoping the HSA investments will help with that. I should be able to keep health insurance costs low if I do move to SE Asia, for example, as you can get good coverage there for much less than in the US from my preliminary research. Thanks for your feedback.
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Mactheriverrat
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Re: Asset Allocation 10 Years Out to Retirement at 55

Post by Mactheriverrat »

There are a lot of other factors still to look at. Say you want to retire in 10 years - IMHO put in as much money into your 401-k . If you have any index funds slim down your holdings to 2 or 3 high growth funds . Buy John Bogle 3 fund portfolio book.

Also
SS links below
https://www.ssa.gov/OACT/ProgData/nra.html

https://www.ssa.gov/OACT/quickcalc/

I myself am married and file on my w4 married and 0 . I up my 401-k a point or 2 as your putting more into your 401-k through the less rather than getting a little less tax re-fund at the end of the year.

Then again there are a lot more experienced Bogleheads who can give you better ideas.
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