Planning retirement income

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Rubydee
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Joined: Wed Aug 19, 2020 10:26 am

Planning retirement income

Post by Rubydee »

Retiring next year and planning a withdrawl strategy. I have 2 457's that I would like to use first. Both are at Fidelity. Planning on withdrawing from the first 457 starting in 2022 over 3 years and the other one will be used in the following year. Now that I have decided to use them in this way I think it would be best to allocate all of these funds into a bond fund or two since they are going to be used in the next 2-6 years.


Any advice on which Fidelity bond funds to choose? Currently have some in Fidelity Total Bond but am wondering if I should add another fund, perhaps an inflation protected fund? Thoughts?

Thanks!
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Duckie
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Re: Planning retirement income

Post by Duckie »

Rubydee wrote:Any advice on which Fidelity bond funds to choose? Currently have some in Fidelity Total Bond but am wondering if I should add another fund, perhaps an inflation protected fund?
I would choose (FXNAX) Fidelity U.S. Bond Index Fund (0.025%) over (FTBFX) Fidelity Total Bond Fund (0.45%). FXNAX is an index fund and FTBFX is an active fund with an expense ratio 18 times the cost.
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Peter Foley
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Re: Planning retirement income

Post by Peter Foley »

I'm not familiar with Fidelity's bond funds so I won't comment about that approach. Don't just look at bond funds. Fidelity may have some good paying, no risk stable value funds that would be appropriate for part of your fixed income allocation. Look at CD's as well.

I would be inclined to spread the risk a bit, even with non stock assets.
rgs92
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Re: Planning retirement income

Post by rgs92 »

No, Fidelity has no Stable Value funds available to the general public. There are several threads asking about where to stash cash in Fidelity, and there are no good answers. All the cash-equivalent funds have near zero return.
The 457 accounts may have Stable Value options though since they are institutional accounts, even if Fidelity is the custodian, so that would probably make sense.
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JoMoney
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Re: Planning retirement income

Post by JoMoney »

If I was going to use a "bond fund at Fidelity" for money to be used in the next 2-6 years, it would be Fidelity® Short-Term Bond Index Fund ( FNSOX ), which has a weighted average maturity of about 2.8 years
That said, it's not yielding much right now, neither are any other bond funds.. which is in part why I don't own any of them.
All of my short-term money is in high-yield bank accounts and Series I Savings Bonds.

Fidelity does offer brokered bank CD's, but if you go that route you should really be sure you'll hold them to their maturity... and even then, you're not looking at great yields.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Peter Foley
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Re: Planning retirement income

Post by Peter Foley »

rgs92

Just an FYI regarding context.

My wife has a 403b account at Fidelity and it has excellent stable value funds. Sable value funds are not often available to the general public. My guess (I honestly don't know) is that it is because many stable value funds come with restrictions on withdrawals.
SimplicityNow
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Re: Planning retirement income

Post by SimplicityNow »

IMO if these are funds you plan to draw on in the very near term the goal is to protect the principal rather then searching for yield.

As was already mentioned if you have a decent stable value fund available in your plan that would probably be a good option.
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ram
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Re: Planning retirement income

Post by ram »

If I had money at Fidelity then for the portion that I plan on using in the next 12 months I would consider:
FUMBX (ER 0.03) Fidelity short term treasury bond index.
Ram
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