Investment/Retirement advice appreciated.

[rfrost77]

Hello,

I am nearing retirement and looking for suggestions to help ensure that I meet my retirement goals. I "believe" I am OK, but am always open to input and it certainly doesn't hurt to have another set of eyes checking to see that I haven't missed anything.

Looking at the "template" suggested by the forum, here is my information:

EMERGENCY FUNDS: I usually keep between 25K and 35K in our bank/savings accts. Current amount $31K

DEBT: Mortgage (15 yr-fixed) balance of $91K (2.48%) and 1 car loan (2.9%) with a balance of $20K. No CC debt, always pay off in full each month.

FILING STATUS: Married/filing jointly

TAX RATE: 22% Federal, 5% State

STATE OF RESIDENCE: Alabama

AGE: Just turned 60

DESIRED ASSET ALLOCATION: I guess I'm happy with 60% Equity / 40% Bonds, maybe some Int'l thrown in the mix which I currently do have.

CURRENT PORTFOLIO: Here is where it gets a little complicated. Total assets (including the above bank acct balance) right at $1.3 million.

-401K with Ascensus: $610K
22% ($133K) DFFGX (Short Term Bonds), ER .17
9% ($56K) DEMSX (Emerging Markets), ER .79
13% ($78K) PRDSX (Small Cap), ER .8
4% ($23K) DFGEX (Real Estate Securities) ER .31
39% ($231K) VLCAX (Large Cap), ER .05
13% ($83K) TRRCX (2030 Target Date Fund), ER .56
<1% ($6K) SGGDX (Gold), ER 1.19


-401k with VOYA: $18K (wife's 401k, which she is no longer allowed to contribute to, but still works for the company.
100% State Street Target Retirement Fund 2040, ER .065

-403b with TIAA: $166K
30% ($50K) in QCBMPX (Core Bond), ER .32
20% ($33K) in QCEQPX (Equity Index), ER .25
34% ($56K) in QCGLPX (Global Equities), ER .32
13% ($21K) in QCGRPX (Growth Index), ER .29
3% ($6K) in TIAA Traditional, ER N/A

-457b plan with TRS Alabama: $100K
100% in Equity Portfolio (S&P Index), ER ?

-TSP plan: $35K
100% in C Fund (S&P Index), ER .048

-Edward Jones Acct: $235K
47% ($110K) in CD's bearing 5.2%, and
53% ($125K) in MM fund PCOXX bearing 4.9%

-Vanguard IRA's: $105K (95K in trad'l and 10K in Roth)
15% ($16K) in VGT, ER .1
30% ($31K) in BRK.B, ER N/A
55% ($58K) in VOO, ER .03

Am contributing the following:

-$30K/yr to 401K and 403b (spread out among TSP/Ascensus/TIAA, getting maximum matching)
-$30K/yr to 457b Plan (0 matching)
-$8K/yr to IRA's (but this varies, depends upon what my accountant says is permitted, due to income limit)

I realize I probably need to simplify my Ascensus 401k, probably just a mix of VLCAX and DFFGX would suffice. I could probably simplify the 403b with TIAA, maybe use it only for Int'l equity, since the QCGLPX fund has much lower ER than the DEMSX in the 401K???

I cannot roll over any of these accounts (Ascensus, TIAA, TSP) since I still work for all 3 employers (strange situation, I know). I could possibly roll the wife's (VOYA) over into her IRA, just haven't done so because there is talk at her workplace that they might allow employees to participate with contributions again.

I will also have a pension of $22k/year (non COLA adjusted) starting whenever I retire from TIAA job. Our Social Security benefits should total $72K/year if we start drawing at age 70. I am going to assume only 80% of that because of the forecast "shortfall" in SS in 2033-2035.

My goals,

-Quit two of my jobs at the end of next year, and keep only the job with the state until age 65 (for medical insurance).
-Wife will probably retire at age 62 (in 2-1/2 years). We should be fine by tapping into our investments to make up shortfall in income(s) once she retires (which would be one salary only of $55K from age 62-65 and then $85K/yr from investments from age 65 to 70).
-Wish to have retirement income of $100K/year (in today's money) starting at age 65, indexed 3%/year for inflation. This will be more than enough,
as we currently spend approx. $75-80K/year.

I would truly appreciate any advice you all can give me and suggestions on what could be done to improve my investments/plans.

Thank you for your time.

[dawgs]

Just wondering why you list expense ratios for most accounts, but not Edward Jones? I don't think you'll like the answer once you find out.

[Grt2bOutdoors]

Just wondering why you list expense ratios for most accounts, but not Edward Jones? I don't think you'll like the answer once you find out.

The ER is 20bps or 0.20% after a 4bp fee waiver.

[rfrost77]

Just wondering why you list expense ratios for most accounts, but not Edward Jones? I don't think you'll like the answer once you find out.

Sorry,

Yes, ER is .2 for the MM account. Grt2bOutdoors is correct!

The CD's and MM account are the only things I would ever use Edward Jones for, and only then because the rep's office is nearby and convenient. He's not very happy that I won't do my regular investments with him. But when I opened the acct with him 2 yrs ago, they had pretty much some of the best CD rates around. Not so much anymore. The money in the MM account is from those CD's that were between 5 and 5.5% and have matured.

[dogagility]

Welcome to the forum. Some thoughts below.

I am nearing retirement and looking for suggestions to help ensure that I meet my retirement goals. I "believe" I am OK..

I agree you and your wife will be fine based upon the information you've provided. To model your financial situation, I highly recommend using this simple but powerful planning tool. https://tpawplanner.com/ and viewtopic.php?t=331368

DESIRED ASSET ALLOCATION: I guess I'm happy with 60% Equity / 40% Bonds, maybe some Int'l thrown in the mix which I currently do have.

This is reasonable. The planning tool I mentioned above can be used to model the impact of various asset allocations.

CURRENT PORTFOLIO: Here is where it gets a little complicated.

I agree... For asset allocation purposes, consider your entire portfolio as a single entity. You don't need to match allocations in each account type.

-401K with Ascensus: $610K
22% ($133K) DFFGX (Short Term Bonds), ER .17
9% ($56K) DEMSX (Emerging Markets), ER .79
13% ($78K) PRDSX (Small Cap), ER .8
4% ($23K) DFGEX (Real Estate Securities) ER .31
39% ($231K) VLCAX (Large Cap), ER .05
13% ($83K) TRRCX (2030 Target Date Fund), ER .56
<1% ($6K) SGGDX (Gold), ER 1.19

The slicing and dicing coupled to high fees is an issue to address. Are these the only investment choices? If so, I would suggest only investing in VLCAX and DFFGX largely because of the low fees. Also... keep in simple... investments less than 10% of your total portfolio have little to no impact.

-Edward Jones Acct: $235K
47% ($110K) in CD's bearing 5.2%, and
53% ($125K) in MM fund PCOXX bearing 4.9%

Are you paying an Assets Under Management fee at Edward Jones? EJ is notorious on Bogleheads... high fees and essentially salespeople not looking out for your best interests.

I highly recommend moving your money to another brokerage like Vanguard, Fidelity, or Schwab. If you need help, then Vanguard PAS is a low cost option.

Am contributing the following:
-$8K/yr to IRA's (but this varies, depends upon what my accountant says is permitted, due to income limit)

There is no income limit to contributing to an IRA.

Since both you and your wife have earned income and are over 50, you can each contribute 8K to an IRA in 2024 and 2025.

Our Social Security benefits should total $72K/year if we start drawing at age 70.

It may be optimal to have the lower earning spouse claim earlier than age 70. The larger earner should wait to age 70. Use this tool to examine the benefits of different strategies. https://opensocialsecurity.com/

-Wish to have retirement income of $100K/year (in today's money) starting at age 65, indexed 3%/year for inflation.

Using the TPAWPlanner and the information you provided (which I may not have exactly correct), you will likely be able to withdraw about 12-13K/month (in real dollars) throughout your retirement. If the market performs extremely poorly, then this would be reduced to 9 - 10K/month. However, use this tool yourself to view your situation.

[Pistol Pete]

Welcome to the forum!

You say
> AGE: Just turned 60
> I cannot roll over any of these accounts (Ascensus, TIAA, TSP) since I still work for all 3 employers

Most 401(k) plans allow "in-service" rollovers when you reach 59 1/2. Check into this, since this would allow you to consolidate investments at your favored brokerage, increase your investment options and lower your costs.

https://www.kiplinger.com/retirement/ho ... tion-works

[rfrost77]

Welcome to the forum. Some thoughts below.

I am nearing retirement and looking for suggestions to help ensure that I meet my retirement goals. I "believe" I am OK..

I agree you and your wife will be fine based upon the information you've provided. To model your financial situation, I highly recommend using this simple but powerful planning tool. https://tpawplanner.com/ and viewtopic.php?t=331368

DESIRED ASSET ALLOCATION: I guess I'm happy with 60% Equity / 40% Bonds, maybe some Int'l thrown in the mix which I currently do have.

This is reasonable. The planning tool I mentioned above can be used to model the impact of various asset allocations.

CURRENT PORTFOLIO: Here is where it gets a little complicated.

I agree... For asset allocation purposes, consider your entire portfolio as a single entity. You don't need to match allocations in each account type.

-401K with Ascensus: $610K
22% ($133K) DFFGX (Short Term Bonds), ER .17
9% ($56K) DEMSX (Emerging Markets), ER .79
13% ($78K) PRDSX (Small Cap), ER .8
4% ($23K) DFGEX (Real Estate Securities) ER .31
39% ($231K) VLCAX (Large Cap), ER .05
13% ($83K) TRRCX (2030 Target Date Fund), ER .56
<1% ($6K) SGGDX (Gold), ER 1.19

The slicing and dicing coupled to high fees is an issue to address. Are these the only investment choices? If so, I would suggest only investing in VLCAX and DFFGX largely because of the low fees. Also... keep in simple... investments less than 10% of your total portfolio have little to no impact. There are other choices, but with even higher fees. I'll go the route of just the VLCAX and DFFGX.

-Edward Jones Acct: $235K
47% ($110K) in CD's bearing 5.2%, and
53% ($125K) in MM fund PCOXX bearing 4.9%

Are you paying an Assets Under Management fee at Edward Jones? EJ is notorious on Bogleheads... high fees and essentially salespeople not looking out for your best interests. No, I'm not paying them anything at all, other than the expense ratio for the MM fund. If that drops much more, I'll probably open up a brokerage acct with Vanguard and put the money in there.

I highly recommend moving your money to another brokerage like Vanguard, Fidelity, or Schwab. If you need help, then Vanguard PAS is a low cost option.

Am contributing the following:
-$8K/yr to IRA's (but this varies, depends upon what my accountant says is permitted, due to income limit)

There is no income limit to contributing to an IRA. https://www.investopedia.com/articles/r ... r%202024). <-- This is what my accountant is referring to. Is this not correct?

Since both you and your wife have earned income and are over 50, you can each contribute 8K to an IRA in 2024 and 2025.

Our Social Security benefits should total $72K/year if we start drawing at age 70.

It may be optimal to have the lower earning spouse claim earlier than age 70. The larger earner should wait to age 70. Use this tool to examine the benefits of different strategies. https://opensocialsecurity.com/ Yes, I've actually used that. Just for simplicity purposes I put 70 for both of us, which equals almost the same.

-Wish to have retirement income of $100K/year (in today's money) starting at age 65, indexed 3%/year for inflation.

Using the TPAWPlanner and the information you provided (which I may not have exactly correct), you will likely be able to withdraw about 12-13K/month (in real dollars) throughout your retirement. If the market performs extremely poorly, then this would be reduced to 9 - 10K/month. However, use this tool yourself to view your situation.

Thanks so much for the TPAW link. I had never come across that before.

Thank you so much for your time and the thought you put into your response!

[rfrost77]

Welcome to the forum!

You say
> AGE: Just turned 60
> I cannot roll over any of these accounts (Ascensus, TIAA, TSP) since I still work for all 3 employers

Most 401(k) plans allow "in-service" rollovers when you reach 59 1/2. Check into this, since this would allow you to consolidate investments at your favored brokerage, increase your investment options and lower your costs.

https://www.kiplinger.com/retirement/ho ... tion-works

I will have to look into that. Thanks for the suggestion! It certainly would make things easier.

[Fishing50]

As you look to simplify: TSP G Fund is a gem—earning intermediate bond & guaranteed against loss.
Search this forum, and you will find voluminous information.

[Sandtrap]

Use any of these portfolio projection tools for your needs.
Engaging Data Site:
https://engaging-data.com/early-retirem ... and-tools/
TestFolio Website:
https://testfol.io/
Portfolio Visualizer site:
https://www.portfoliovisualizer.com/bac ... allocation

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