Ideas on simple portfolio?

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PGHunt24
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Ideas on simple portfolio?

Post by PGHunt24 »

I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Harmanic
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Re: Ideas on simple portfolio?

Post by Harmanic »

The simplest way to invest it is to buy a SPIA. A check arrives in your account every month and you spend it. That's about as simple as it gets.
The question isn't at what age I want to retire, it's at what income. | - George Foreman
Topic Author
PGHunt24
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Re: Ideas on simple portfolio?

Post by PGHunt24 »

Harmanic wrote: Sat Jul 06, 2024 10:12 pm The simplest way to invest it is to buy a SPIA. A check arrives in your account every month and you spend it. That's about as simple as it gets.
Do they get your money when you die?
tibbitts
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Re: Ideas on simple portfolio?

Post by tibbitts »

PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Maybe you should explain what you feel is complex about this portfolio, and say whether it's taxable with unrealized gains (which may limit what you want to do with it.)
samson
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Re: Ideas on simple portfolio?

Post by samson »

One way to make it simpler is to have fewer bond funds, but that will not keep you from thinking about it. I think there is nothing wrong with that, as long as you don't keep trying to improve it all the time. Rebalancing about once a year is OK.
By the way, remember to start Required Minimum Distributions (RMDs) now that you are 73, if you have not already done so, or the IRA will get upset and nasty.
I am 91 years old, and have been following and learning from the Bogleheads forever, although I rarely post.
I still manage all our investments and do our own taxes.
For comparison, here is an approximate breakdown of our ETF portfolio plus or minus 2%. My version of a 4 fund portfolio.
Stocks 38%: 25% VTI (Total stock market)
10% VTV (Total Value Index)
3% VXUS (Total International)
Bonds 57%: 57% BND (Total bond market)
Cash 5%: 5% Money Market Funds and some paper I - Bonds
I think about them every day, but have learned to roll with the punches. The investments and and RMDs are on autopilot, so that when I am no longer around my wife who is only 86, will have a fairly easy transition. Keep on trucking.
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PGHunt24
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Re: Ideas on simple portfolio?

Post by PGHunt24 »

samson wrote: Sun Jul 07, 2024 12:04 am One way to make it simpler is to have fewer bond funds, but that will not keep you from thinking about it. I think there is nothing wrong with that, as long as you don't keep trying to improve it all the time. Rebalancing about once a year is OK.
By the way, remember to start Required Minimum Distributions (RMDs) now that you are 73, if you have not already done so, or the IRA will get upset and nasty.
I am 91 years old, and have been following and learning from the Bogleheads forever, although I rarely post.
I still manage all our investments and do our own taxes.
For comparison, here is an approximate breakdown of our ETF portfolio plus or minus 2%. My version of a 4 fund portfolio.
Stocks 38%: 25% VTI (Total stock market)
10% VTV (Total Value Index)
3% VXUS (Total International)
Bonds 57%: 57% BND (Total bond market)
Cash 5%: 5% Money Market Funds and some paper I - Bonds
I think about them every day, but have learned to roll with the punches. The investments and and RMDs are on autopilot, so that when I am no longer around my wife who is only 86, will have a fairly easy transition. Keep on trucking.
Thank you for sharing your information.
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PGHunt24
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Re: Ideas on simple portfolio?

Post by PGHunt24 »

tibbitts wrote: Sat Jul 06, 2024 11:48 pm
PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Maybe you should explain what you feel is complex about this portfolio, and say whether it's taxable with unrealized gains (which may limit what you want to do with it.)
As I get older I become more market/interest rate adverse. Looking to see if there is something I don't have to think about.
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KingRiggs
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Re: Ideas on simple portfolio?

Post by KingRiggs »

Perhaps the Vanguard Balanced Fund? It aims to maintain a steady 60/40 stock/bond split, and does all the rebalancing for you...

This might be a slightly higher stock allocation than you carry, but it would eliminate all the various fixed income components you are currently juggling...
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goblue100
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Re: Ideas on simple portfolio?

Post by goblue100 »

PGHunt24 wrote: Sun Jul 07, 2024 7:57 am
tibbitts wrote: Sat Jul 06, 2024 11:48 pm
PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Maybe you should explain what you feel is complex about this portfolio, and say whether it's taxable with unrealized gains (which may limit what you want to do with it.)
As I get older I become more market/interest rate adverse. Looking to see if there is something I don't have to think about.
There are all in one funds, like Vanguard Life strategy moderate growth, but those don't eliminate market risk. But you don't have to think about it unless you choose to. The SPIA would be the choice if you want to eliminate market risk, but as you noted the money won't go to your heirs. You can do a SPIA with a guaranteed 10 years paid so if you died early your heirs would get some money.
"Confusion has its cost" - Crosby, Stills and Nash
Django Ii
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Re: Ideas on simple portfolio?

Post by Django Ii »

I've been happy with VTINX (Target Date Income) I have enough saved (actually quite a bit less than the OP) and all I really care about is keeping up with inflation. The 30% stock allocation with a healthy dose of short term TIPs is about perfect for me.
Last edited by Django Ii on Sun Jul 07, 2024 8:31 am, edited 1 time in total.
tibbitts
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Re: Ideas on simple portfolio?

Post by tibbitts »

PGHunt24 wrote: Sun Jul 07, 2024 7:57 am
tibbitts wrote: Sat Jul 06, 2024 11:48 pm
PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Maybe you should explain what you feel is complex about this portfolio, and say whether it's taxable with unrealized gains (which may limit what you want to do with it.)
As I get older I become more market/interest rate adverse. Looking to see if there is something I don't have to think about.
Market risk for equities or bonds is one thing, but that has nothing to do with simplicity. If you want to limit market risk some solutions may actually be more complicated. And you may still be limited by your unrealized capital gains in taxable accounts so without that information we're just speculating.
ScubaHogg
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Re: Ideas on simple portfolio?

Post by ScubaHogg »

With no more info how about an all in one Vanguard fund. The ultimate in simplicity

viewtopic.php?t=287967

40% stocks, 60% bonds

https://investor.vanguard.com/investmen ... file/vscgx
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury.” | ― Judge Learned Hand
Harmanic
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Re: Ideas on simple portfolio?

Post by Harmanic »

PGHunt24 wrote: Sat Jul 06, 2024 11:07 pm
Harmanic wrote: Sat Jul 06, 2024 10:12 pm The simplest way to invest it is to buy a SPIA. A check arrives in your account every month and you spend it. That's about as simple as it gets.
Do they get your money when you die?
You never mentioned a bequest motive. The more detailed the question, the more detailed the responses can be.

A SPIA can be structured as a joint policy with survivor benefits of between 50 to 100% of the payments, or you can have a 10 or 20 year guarantee that gives back the remaining principal to a beneficiary. If your beneficiary is a spouse, I would recommend a joint policy with at least 2/3 survivor benefit.
The question isn't at what age I want to retire, it's at what income. | - George Foreman
Blue456
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Re: Ideas on simple portfolio?

Post by Blue456 »

Vanguard Target Date Retirement Income (VTINX)
- average 3-4% dividends/capital gains
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ruralavalon
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Re: Ideas on simple portfolio?

Post by ruralavalon »

PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
My 60/40 portfolio is all invested in just one fund, Vanguard Balanced Index Fund (VBIAX).

You could use a single target date fund, single allocation fund, or single balanced fund. I am not aware of any that use a 50/50 asset allocation.

That's simpler, but can't say if it's less volatile.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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retired@50
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Re: Ideas on simple portfolio?

Post by retired@50 »

PGHunt24 wrote: Sat Jul 06, 2024 11:07 pm
Harmanic wrote: Sat Jul 06, 2024 10:12 pm The simplest way to invest it is to buy a SPIA. A check arrives in your account every month and you spend it. That's about as simple as it gets.
Do they get your money when you die?
To be clear, they get your money when you purchase the SPIA, not when you die.

Depending on the "features" of the SPIA, if you die soon after purchase, your heirs might get something, if that was part of your choice when purchasing.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
bonesly
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Re: Ideas on simple portfolio?

Post by bonesly »

PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Simpler = less funds to rebalance/manage.
Less Volatile = more bonds and less stocks.

Simpler is not necessarily less volatile (a single fund is simple, but if it's VTI then it's pretty volatile).

Is this $1M all in a tax-deferred and/or tax-free accounts or is some/all of it in a taxable brokerage account?

I do like @ruralavalon's suggestions of Vanguard Balanced Index (VBIAX) which auto-rebalances at a 60/40 allocation, but that would not be tax-efficient in a Taxable account (might still be acceptable if you're in a low marginal tax bracket and state taxes are low/zero).
ruralavalon wrote: Sun Jul 07, 2024 10:09 am I am not aware of any that use a 50/50 asset allocation.
I'm pretty sure Tax-Managed Balanced is 50/50 rather than 60/40 like Balanced Index. Not appropriate for a tax-advantaged account, but probably suitable for a taxable account.
Last edited by bonesly on Mon Jul 08, 2024 1:57 am, edited 1 time in total.
Don't do what Bogleheads tell you. Listen to what we say, consider other sources, and make your own decisions, since you have to live with the risks & rewards (not us or anyone else).
tomd37
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Re: Ideas on simple portfolio?

Post by tomd37 »

PGHunt,
We are an older couple average age of 88 and we recently decided to simplify our asset allocation and executed the exchange of funds on July 1st. We each have a traditional IRA, I have a Roth IRA, and we jointly hold a small taxable investment account holding the Vanguard 500 Index Fund (VFIAX) that can be added to if we annually have funds in excess of our needs. We also have cash position invested in 5+ percent CDs.

After a long and thoughtful process we decided to invest in just one account, the Vanguard Target Retirement Income Fund (VTINX), which for us has a good 30/70 asset allocation of both US and foreign stocks and bonds. It simplifies things for my spouse should I pass before her. Rebalancing is automatic and annual qualified charitable distributions (QCDs) are simplified. We have one surviving child and discussed this plan in detail with her and she understands and supports this financial decision.
Now to just sit back and enjoy life as best we can. It has been a great trip thus far! :sharebeer
Tom D.
samson
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Re: Ideas on simple portfolio?

Post by samson »

PGHunt24 wrote:
I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Samson's second reply:
Hi PG
Most of the reponses, including mine, seem to have missed or ignored the two words "less volatile" in your original post, and dealt with "simple" in your reference line and "simpler" in your question. Sorry about that.
If that is what you are thinking about, and it bothers you enough so that you are looking for help, then your problem is with your existing Asset Allocation of 50% stocks/50% bonds which by its very nature is quite volatile and somewhat aggressive.
The solution to your volatility problem is to change your Asset Alocation to a more consevative one, such as 45% stocks/55% bonds, or 40%/60%. Of course as you reduce the volatility of your portfolio, you will probably also reduce the total return on your portfolio. If high volatility is keeping you awake now, then lower volatility will hopefully let you sleep better.
Do some research about Asset Allocation and reducing volatility as we get older. It is a hot topic, but only you can decide what is right for you and your family.
Hope this helps, and lets you think about less stressful things that wont keep you up at night. Samson
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BolderBoy
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Re: Ideas on simple portfolio?

Post by BolderBoy »

PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
"The enemy of a good plan is a perfect plan."

As others have shown, you can nitpick the "simpler less volatile way" until it gives in.

What you are doing is fine.

(happens to be what I, at age 74, am doing)
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
Topic Author
PGHunt24
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Re: Ideas on simple portfolio?

Post by PGHunt24 »

BolderBoy wrote: Mon Jul 08, 2024 10:11 am
PGHunt24 wrote: Sat Jul 06, 2024 9:46 pm I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
"The enemy of a good plan is a perfect plan."

As others have shown, you can nitpick the "simpler less volatile way" until it gives in.

What you are doing is fine.

(happens to be what I, at age 74, am doing)
Thanks for sharing your information.
Topic Author
PGHunt24
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Re: Ideas on simple portfolio?

Post by PGHunt24 »

samson wrote: Sun Jul 07, 2024 11:22 pm PGHunt24 wrote:
I am 73 years old with $1.0 MM, 1/2 VTI, 1/2 various Vanguard bond funds (short and intermediate). Is there a simplier less volatile way to invest this money so I don't have to think about it?
Samson's second reply:
Hi PG
Most of the reponses, including mine, seem to have missed or ignored the two words "less volatile" in your original post, and dealt with "simple" in your reference line and "simpler" in your question. Sorry about that.
If that is what you are thinking about, and it bothers you enough so that you are looking for help, then your problem is with your existing Asset Allocation of 50% stocks/50% bonds which by its very nature is quite volatile and somewhat aggressive.
The solution to your volatility problem is to change your Asset Alocation to a more consevative one, such as 45% stocks/55% bonds, or 40%/60%. Of course as you reduce the volatility of your portfolio, you will probably also reduce the total return on your portfolio. If high volatility is keeping you awake now, then lower volatility will hopefully let you sleep better.
Do some research about Asset Allocation and reducing volatility as we get older. It is a hot topic, but only you can decide what is right for you and your family.
Hope this helps, and lets you think about less stressful things that wont keep you up at night. Samson
Thank you for your advice.
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