Creating a three fund portfilo for retirement

[Acres250Farm1]

Emergency funds: Three to six months of expenses - Yes

Debt: Indicate if you have any debt - None

Tax Filing Status: Married Filing Jointly

Tax Rate: 22% Federal, 6% State

State of Residence: New York

Age: 65
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 0% of stocks

Please provide an approximate size of your total portfolio $3 million

Show us your current portfolio including all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans.

Show each fund or holding as a percentage of the entire portfolio, not as a percentage of the account that holding is in. If this instruction is not clear, see the example under the Key Points section below. For example:

Current retirement assets
* The format below is shown using his/her pronouns. Use whatever pronouns or identifying names you prefer as long as it is clear which assets belong to which person.

Taxable
0% cash
0% fund name (ticker symbol) (expense ratio)
0% stock company name (ticker symbol)

His 401k
43% VG Inst 500 index, VIIIX, .03%
12% VG Target Retirement Fund, VTXVX, .08%
Company match? No

His Roth IRA at Fidelity
21% Fidelity 500 Index fund, FXAIX. .01%

His Rollover IRA at Fidelity
6% Fidelity Asset Manager 50%, FASMX, .28%

Her Roth IRA at Fidelity
0.7% Fidelity Freedom Fund 2025, FFTWX, .61%

Her Rollover IRA at Northwest Mutual
17.3% Multiple Northwest Mutual Fund
_______________________________________________________________
Note: Total percentage of all the above accounts together (not each account individually) should equal 100%.

Contributions

New annual Contributions
$0 his 401k (also specify any employer matching contributions)
$0 his IRA/Roth IRA
$0 her IRA/Roth IRA
$0taxable (for retirement, not short term goals)

Available funds



Questions:
1. Is my asset allocation ok for my age?

2.How would I implement a Bogle head three fund portfolio for my investments?

3. What would be the best way to diversify my portfolio?

[Mike Scott]

80/20 is more stock than some would recommend (but my target is 75/25 with pension and SS). You can check your risk tolerance level with some of the brokerage quizzes.
It's only a two fund portfolio if you are skipping international.
You can combine total stock market funds and bond funds to your desired allocation.
Consider combining and moving accounts to simplify at a single location.
You have a couple of Fidelity funds with relatively high costs.
With all tax advantaged accounts, you could easily pick a single balanced fund to hold in all accounts.
There should not be any tax cost to make changes in these accounts.
You have a lot of good options but take enough time to be sure you know what you want before making any big changes.

[Beensabu]

1. Is my asset allocation ok for my age?

As long as you can hold it.

2.How would I implement a Bogle head three fund portfolio for my investments?

You pretty much already have. You just have to get rid of at least this high expense ratio fund:

Fidelity Freedom Fund 2025, FFTWX 0.61%

By switching it to this:

Fidelity Freedom® Index 2025 Fund FQIFX 0.12%

You could also switch the other active Fidelity fund (Fidelity Asset Manager 50%, FASMX 0.28%) to FQIFX, but it's not a big deal if you don't feel like it.

Also, what are these funds and their expense ratios?

"Multiple Northwest Mutual Fund"

3. What would be the best way to diversify my portfolio?

Increasing your international equity allocation. But if you don't want to do that, then it's fine.

[delamer]

By my count, you’ve got at least 74% of your portfolio in equities.

But what is in the Northwest Mutual investment?

With the exception of that, your portfolio is pretty Bogleheadish already. 80% in stocks is a more aggressive stance than that of most 65-year-olds, but it may be fine for you. What are your other sources of retirement income? If, for instance, you can cover your retirement expenses with pensions and Social Security then being aggressive with your portfolio is a reasonable choice.

[ruralavalon]

Welcome to the forum .

Emergency funds: Three to six months of expenses - Yes

Debt: Indicate if you have any debt - None

Tax Filing Status: Married Filing Jointly

Tax Rate: 22% Federal, 6% State

State of Residence: New York

Age: 65
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 0% of stocks
. . . . .
Questions:
1. Is my asset allocation ok for my age?

At age 65 and retired I suggest in the area of 40-50% of portfolio in fixed income.

That could be bonds, bond funds, CDs, I-bonds, money market funds, a Stable Value Fund or Guaranteed Income Fund.

Please provide an approximate size of your total portfolio $3 million

Show us your current portfolio including all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans.

Show each fund or holding as a percentage of the entire portfolio, not as a percentage of the account that holding is in. If this instruction is not clear, see the example under the Key Points section below. For example:

Current retirement assets
* The format below is shown using his/her pronouns. Use whatever pronouns or identifying names you prefer as long as it is clear which assets belong to which person.

Taxable
0% cash
0% fund name (ticker symbol) (expense ratio)
0% stock company name (ticker symbol)

His 401k
43% VG Inst 500 index, VIIIX, .03%
12% VG Target Retirement Fund, VTXVX, .08%
Company match? No

What funds are offered in his employer's 401k plan? Please give fund names, tickers and expense ratios.

There may be better funds to use in the 401k account.

Bond funds are not very tax-efficient and ordinarily should be held in a tax-advantaged account, preferably a traditional tax-deferred account like a traditional 401k or traditional IRA.

His Roth IRA at Fidelity
21% Fidelity 500 Index fund, FXAIX. .01%

For a little more diversification you could consider Fidelity® Total Market Index (FSKAX) ER 0.015%.

His Rollover IRA at Fidelity
6% Fidelity Asset Manager 50%, FASMX, .28%

I suggest a very diversified index fund with a very low expense ratio. That could be a bond fund like Fidelity® US Bond Index (FXNAX) ER 0.025%.

Her Roth IRA at Fidelity
0.7% Fidelity Freedom Fund 2025, FFTWX, .61%

I suggest a very diversified stock index fund with a very low expense ratio.

That could be Fidelity® Total Market Index (FSKAX) ER 0.015%.

Her Rollover IRA at Northwest Mutual
17.3% Multiple Northwest Mutual Fund

I suggest rollover of her IRA at Northwest Mutual into an IRA at Fidelity.

I suggest a very diversified index fund with a very low expense ratio. That could be a bond fund like Fidelity® US Bond Index (FXNAX) ER 0.025%.

[Navillus1968]

Since you & DW have ceased contributing to retirement accounts, one assumes you are both now retired, yes?
What are your annual income needs in retirement & what percentage of that income needs to come from your 401k/IRA accounts?
Has either of you claimed Social Security?

An 80/20 asset allocation with no pension & limited or zero current SS income is quite aggressive. However, if your annual spending needs are modest, you can make it work.
20% bonds/fixed income out of a portfolio of $3M is about $600k. Depending on your annual withdrawal levels, that amount of fixed income could cover 4-8 years of income, or more, but without details on your intended spending in retirement it's hard to say if 80/20 is too stock heavy.

I think more information is needed to provide better advice for you.

PS- You should read the wiki on Roth IRA conversion since your portfolio is very tilted towards tax-deferred accounts vs Roth and you have about $2.4M in TDA. Since you will doubtless be withdrawing TIRA/401k funds to live on prior to RMDs starting, any Roth conversions you perform will stack on top of TIRA/401k income (& possibly SS income), so the conversion amounts involved (if any) will probably be moderate-sized. https://www.bogleheads.org/wiki/Roth_conversion.
Pay close attention to the paragraph- 'Paying conversion taxes with converted funds' since that describes your situation.