retirement scenario [safety of IRA funds]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
jim2k
Posts: 4
Joined: Sun Jan 07, 2018 5:40 pm

retirement scenario [safety of IRA funds]

Post by jim2k » Fri Jan 12, 2018 3:02 pm

i have $370k in a vanguard rollover ira. i,m thinking of just dumping the stocks and taking the profit and park that money somewhere i would not loose it. I am not too concerned with making money off of it. i'm just trying to guarantee i have it at age 60. it's not my total nest egg. does anyone know of any good vanguard monmey market funds that are good to put this money in.
at 60 i,ll have a military pension so i will not have draw too much from the 370k. plus i may have another pension from my current job if i stick it out 2 more years. it will only be $500 a month. then at 65 i,ll have $600 a month pension from a previous law firm i worked at and then Social security i,ll collect at 62

By the way i am currently 50 single and no kids and i want to retire at 53 - 55. I plan on living abroad where my money will go further.

User avatar
Watty
Posts: 12114
Joined: Wed Oct 10, 2007 3:55 pm

Re: retirement scenario [safety of IRA funds]

Post by Watty » Fri Jan 12, 2018 11:34 pm

Insead of a money market fund you could just buy an individual TIPS bond that matures when you are 60.

User avatar
David Jay
Posts: 4260
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: retirement scenario [safety of IRA funds]

Post by David Jay » Fri Jan 12, 2018 11:51 pm

Welcome to the Forum!

A few thoughts:

1. Bond funds with durations less than your investment timeframe are reasonably safe. How about a short term, investment grade corporate bond fund.

2. You can purchase brokered CDs inside a Rollover IRA.

3. Even though you talk about "dumping stocks", the stock market is likely the only vehicle that will substantially outperform inflation over the long haul. There is a nice "all-in-one" fund: "LifeStrategy Income" that provides domestic and international diversification but holds only 20% stocks. So it is mostly bonds and provides just a bit of stock "boost" to help with inflation pressures. A terrible, really bad, no good market crash would probably expose you to more than a 5-10% drop. That is what I would do.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

jim2k
Posts: 4
Joined: Sun Jan 07, 2018 5:40 pm

Re: retirement scenario [safety of IRA funds]

Post by jim2k » Sat Jan 13, 2018 7:28 am

Thanks everyone . these are some good ideas that i need to research

Right now the bulk of the money is in
VASGX
Vanguard LifeStrategy Growth Fund
and about 60k is in
VFIJX
Vanguard GNMA Fund Admiral Shares

i'm thinking once the VFIJX goes up sell it and keep everything in the lifestrategy fund

dbr
Posts: 24760
Joined: Sun Mar 04, 2007 9:50 am

Re: retirement scenario [safety of IRA funds]

Post by dbr » Sat Jan 13, 2018 9:20 am

Watty wrote:
Fri Jan 12, 2018 11:34 pm
Insead of a money market fund you could just buy an individual TIPS bond that matures when you are 60.
Based on what the OP said this comes closest to doing what he wants.

User avatar
Watty
Posts: 12114
Joined: Wed Oct 10, 2007 3:55 pm

Re: retirement scenario [safety of IRA funds]

Post by Watty » Sat Jan 13, 2018 9:24 am

jim2k wrote:
Sat Jan 13, 2018 7:28 am
i'm thinking once the VFIJX goes up sell it and keep everything in the lifestrategy fund
I don't know what VFIKX is but what if it does not go up?

jim2k
Posts: 4
Joined: Sun Jan 07, 2018 5:40 pm

Re: retirement scenario [safety of IRA funds]

Post by jim2k » Sat Jan 13, 2018 6:07 pm

Watty wrote:
Sat Jan 13, 2018 9:24 am
jim2k wrote:
Sat Jan 13, 2018 7:28 am
i'm thinking once the VFIJX goes up sell it and keep everything in the lifestrategy fund
I don't know what VFIKX is but what if it does not go up?
Well I am hoping it goes up. its a vanguard fund that is mostly bonds. its does not seem there is a lot of fluctuation

User avatar
David Jay
Posts: 4260
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: retirement scenario [safety of IRA funds]

Post by David Jay » Mon Jan 15, 2018 2:40 pm

Jim:

The LifeStrategy funds include a family of different asset allocations. Because this is an IRA, you can move between funds without any tax issues. If the 80/20 (stocks/bonds) of LS Growth is worrying to you, you can move to LS Moderate (60/40) or LS Conservative (40/60). You get lower long-term gain but with less price volatility.

I really like the LS fund family: my "Dear Wife" letter suggests she move the entire portfolio into a single LS fund for ease of management after my passing.

Asset allocation is all about your personal Need, Willingess and Ability to take equity (stock market) risk. When thinking through asset allocation, I like this chart from Vanguard. Pay particular attention to the "Worst Year Ever" because that indicates the level of pain that could occur, based on the worst historical case: https://www.vanguard.com/us/insights/sa ... llocations
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

soccerrules
Posts: 210
Joined: Mon Nov 14, 2016 4:01 pm

Re: retirement scenario [safety of IRA funds]

Post by soccerrules » Mon Jan 15, 2018 5:19 pm

you know you will pay a 10% penalty and taxes on this as income in the year you "cash out" -unless you wait until age 59.5?
Don't let your outflow exceed your income or your upkeep will be your downfall.

radiowave
Posts: 1373
Joined: Thu Apr 30, 2015 5:01 pm

Re: retirement scenario [safety of IRA funds]

Post by radiowave » Mon Jan 15, 2018 5:30 pm

In addition to David's suggestions, there is also a Vanguard Target Retirement Income fund (30/70) that has some TIPS

https://personal.vanguard.com/us/funds/ ... e#tab=0

It's been a steady 4-5% over the past 10 year returns (this past year 8.5%) and looks like is lost about 16% of it's value at the depth of the 2008-2009 recession. The other high bond percentage LifeStrategy and Target Retirement funds will have similar performance.
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

jim2k
Posts: 4
Joined: Sun Jan 07, 2018 5:40 pm

Re: retirement scenario [safety of IRA funds]

Post by jim2k » Mon Jan 15, 2018 8:43 pm

Thanks a lot Guys

I've learned more from this post and searching this forum. then i have from any conversations at work.

I will not be taking this money out before the age of 60. This money is more like a safety net for me. in my retirement plan.

i will still be in the stock market with a Roth IRA and a 401k. i also have money in TD ameritrade a few stocks setup as DRIPS

i also have a lot of money in savings. This money is what i will live off of until i hit 60

MotoTrojan
Posts: 947
Joined: Wed Feb 01, 2017 8:39 pm

Re: retirement scenario [safety of IRA funds]

Post by MotoTrojan » Mon Jan 15, 2018 8:56 pm

Sounds like you could benefit from posting your full situation for review rather than just this IRA.

Post Reply