Portfolio Changes After Retirement

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Barefootgirl
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Portfolio Changes After Retirement

Post by Barefootgirl » Mon Apr 30, 2018 2:23 pm

So, at risk of stating the obvious - myself, others and conventional wisdom hold that there is often merit to rebalancing a portfolio in favor of less volatile investments at retirement - but I am curious about subcategories within an asset class - for example, instead of a total market fund, breaking it up into small, emerging, etc.

In other words, if one has had a very lazy (like 3 fund) portfolio in the accumulation years, can you see any reason to slice it further during the leisure years?

Thanks, just asking.
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David Jay
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Re: Portfolio Changes After Retirement

Post by David Jay » Mon Apr 30, 2018 4:48 pm

Not me. I am going the other way, planning to simplify into a single LifeStrategy fund for my spouse’s ease.
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dbr
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Re: Portfolio Changes After Retirement

Post by dbr » Mon Apr 30, 2018 4:58 pm

Barefootgirl wrote:
Mon Apr 30, 2018 2:23 pm


In other words, if one has had a very lazy (like 3 fund) portfolio in the accumulation years, can you see any reason to slice it further during the leisure years?

Thanks, just asking.
No, absolutely not. For ability to manage in older ages the opposite might make sense.

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cfs
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Re: Portfolio Changes After Retirement

Post by cfs » Mon Apr 30, 2018 4:59 pm

Good question. I went the other route, from a large collection of individual stocks, ETFs, mutual funds, to a small collection of ETFs and mutual funds. Plan to shrink the collection down to a single mutual fund (Target Retirement Income Fund, VTINX) before the expiration of my birth certificate. Whatever you decide to do, good luck with your investments, y gracias por leer ~cfs~
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retiredjg
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Re: Portfolio Changes After Retirement

Post by retiredjg » Mon Apr 30, 2018 5:01 pm

The main driver of your portfolio is the stock to bond ratio. The little divisions matter much less. You can break your US stocks or your International stocks down into smaller categories and there may or may not be a little extra boost that comes from that.

I would not be making my portfolio more complex in retirement than before my retirement....unless you just what to make your portfolio into a hobby and actually know how to do that without losing money. Most people who tinker will probably lose money so I'm not suggesting that is a good idea.

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Taylor Larimore
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Re: Three-Fund Portfolio Changes After Retirement ?

Post by Taylor Larimore » Mon Apr 30, 2018 5:06 pm

Barefootgirl wrote:
Mon Apr 30, 2018 2:23 pm
if one has had a very lazy (like 3 fund) portfolio in the accumulation years, can you see any reason to slice it further during the leisure years?

Thanks, just asking.
Barefootgirl:

If you were wise enough to enjoy the simple, low-cost, tax-efficient, diversified Three-Fund Portfolio during your working years, you, your caregivers and heirs will bless you for a simple-to-understand, low-cost, tax-efficient diversified portfolio that requires only the minimum of maintenance during your "leisure years."

Stay the course.

Best wishes.
Taylor
Last edited by Taylor Larimore on Mon Apr 30, 2018 5:07 pm, edited 1 time in total.
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Doom&Gloom
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Re: Portfolio Changes After Retirement

Post by Doom&Gloom » Mon Apr 30, 2018 5:07 pm

David Jay wrote:
Mon Apr 30, 2018 4:48 pm
Not me. I am going the other way, planning to simplify into a single LifeStrategy fund for my spouse’s ease.
Similar plan of action here. I am currently a slice-and-dicer, but I have a plan in place to reduce one slice per year until I am down to three.

I hope I live long enough to get there :beer

The Wizard
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Re: Portfolio Changes After Retirement

Post by The Wizard » Mon Apr 30, 2018 5:07 pm

dbr wrote:
Mon Apr 30, 2018 4:58 pm
Barefootgirl wrote:
Mon Apr 30, 2018 2:23 pm


In other words, if one has had a very lazy (like 3 fund) portfolio in the accumulation years, can you see any reason to slice it further during the leisure years?

Thanks, just asking.
No, absolutely not. For ability to manage in older ages the opposite might make sense.
I would agree with this.
Between TIAA and Vanguard, I've got money in a dozen different funds presently which may be too many. But I'm not planning to expand my number of holdings...
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FinancialDave
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Re: Portfolio Changes After Retirement

Post by FinancialDave » Mon Apr 30, 2018 5:20 pm

I agree with most everyone else, Less-Is_More, in retirement, however you can't really go less than 3, without using some sort of Balanced Fund(s). As a 3-fund retirement account I like Wellington, Wellesly, & Total Stock Market, from which I can manage just about any Stock/Bond ratio I want. It's maybe a little heavy in the active management side, but it's pretty hard to fault the management of those funds.

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heyyou
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Re: Portfolio Changes After Retirement

Post by heyyou » Mon Apr 30, 2018 10:39 pm

With numerous equity slices, there may be less rebalancing since the early changes will be spread across multiple funds. Rebalancing is for risk reduction, no rebalancing has good long term returns with some stress of wider fluctuations. Several book authors have written about the high performance of the deceaseds' portfolios at brokerages since they did not rebalance.

IlliniDave
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Re: Portfolio Changes After Retirement

Post by IlliniDave » Tue May 01, 2018 3:36 am

Hi Barefootgirl,

I agree with the general tone of keeping it simple unless you just have a desire to make investing one of your leisure pursuits/hobbies. I've kicked around the idea of carving out a little "play money" (~3% of the total) to invest a little more aggressively as a retirement hobby, but even then my goal is to have everything boiled down to as close to a 3-fund as I can get before I get to 70 and "really retire" (versus early retire at 55). Even if I skip the play money activity that still represents a fair amount of simplifying for me over those first 15 years.

Even though I have some common tilts today (like small and EM) I still tend, and intend, to be pretty hands-off with it. Feeling compelled to "check the market" daily and worry about how my investments are going runs contrary to my retirement goals. The point being that no matter what I do I want to keep it well within my comfort zone. Aside from following an arc of simplification, being 12-17 months away from the big plug pull, I've already begun stepping down my relative equity exposure.
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fennewaldaj
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Re: Portfolio Changes After Retirement

Post by fennewaldaj » Tue May 01, 2018 5:41 am

dbr wrote:
Mon Apr 30, 2018 4:58 pm
Barefootgirl wrote:
Mon Apr 30, 2018 2:23 pm


In other words, if one has had a very lazy (like 3 fund) portfolio in the accumulation years, can you see any reason to slice it further during the leisure years?

Thanks, just asking.
No, absolutely not. For ability to manage in older ages the opposite might make sense.
Yeah that is my thought too. I have a heavily slice and diced portfolio now with a bunch of asset sub classes with multiple funds for each. I will likely try to simplify it to 3-5 funds total in my mid 70s just to make things easier to manage as I age.

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