Want to go 50/50 VWENX/VWIAX....how?

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Topic Author
rollretirement
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Want to go 50/50 VWENX/VWIAX....how?

Post by rollretirement » Wed Mar 13, 2019 11:40 am

Sorry for asking a very newbie question and also sorry if it's been asked a million times.

I am looking to retire in June 2019 at age 60 (DW is 59). We are currently invested approx 95% in Wellington in our tIRA. I am thinking about moving from the 65/35 Wellington fund to a 50/50 split with Wellington and Wellesley. I will sleep better at night (I think). Here is the dumb question part - when making this move, is it as simple as doing it all in one transaction or do I need to spread it out over a period of time due to tax consequences?

I appreciate any and all advice and feedback.

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bertilak
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by bertilak » Wed Mar 13, 2019 11:53 am

There are no tax consequences for buying and selling within an IRA, so just do it in one "swell foop!"
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

MotoTrojan
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by MotoTrojan » Wed Mar 13, 2019 12:08 pm

I personally would sleep better without having my entire retirement in active funds. I would personally pick which of these two you prefer and then put the rest (other half or whatever) into either a Life-strategy fund at my desired AA (if you want International) or perhaps the Balanced fund at VG which I believe is US only.

If you think bonds do better with active management then perhaps use Wellesley combined with one of the indexed funds I mentioned.

You could do a lot worse than your proposed 50/50, but while you are changing things I thought I would bring up the elephant in the room which is your reduced diversification and exposure to active-management risk.

DarkHelmetII
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by DarkHelmetII » Wed Mar 13, 2019 1:59 pm

MotoTrojan wrote:
Wed Mar 13, 2019 12:08 pm
I personally would sleep better without having my entire retirement in active funds.
I agree. Even if VWENX / VWIAX is 50 / 50 consider putting some into passive 50 / 50.

stuper1
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by stuper1 » Wed Mar 13, 2019 2:12 pm

Something like 50/50 between VWENX and VSCGX would get you close to 50/50 stocks/bonds and 50/50 active/passive (sort of).

Topic Author
rollretirement
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by rollretirement » Wed Mar 13, 2019 2:20 pm

MotoTrojan wrote:
Wed Mar 13, 2019 12:08 pm
I personally would sleep better without having my entire retirement in active funds.
Is that due to risk? Expenses? Taxes? All of the above? If the answer is 'risk', would that be due to a potential 'bad' fund manager?

stuper1
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by stuper1 » Wed Mar 13, 2019 2:26 pm

The current fund manager might be great. But he might retire in two years. And then what?

ZLMARK
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by ZLMARK » Wed Mar 13, 2019 2:30 pm

Guess yourself like most would say that bonds are the safe way to go.....until they are not. If it were me I would stay entirely with
VWENX and just hold. That's an awsome fund.
https://www.morningstar.com/videos/8534 ... rever.html

Topic Author
rollretirement
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by rollretirement » Wed Mar 13, 2019 2:35 pm

ZLMARK wrote:
Wed Mar 13, 2019 2:30 pm
If it were me I would stay entirely with VWENX and just hold. That's an awsome fund.
After running PortfolioVisualizer with some of the funds mentioned, that's what I'm thinking too. FireCalc shows 100% success at both 50/50 and 65/35 so maybe I should leave well enough alone and just learn to sleep better. :)

ZLMARK
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by ZLMARK » Wed Mar 13, 2019 2:55 pm

I'm doing something different right now but should I retreat I will go to the Wellington for sure, since 1929. Didn't even know mutual funds
went back that far. There is one think to pay attention to if you are a retired type and that is a 34% turnover. Guess that is not exactly
a tax help. Just curious if someone can tell me, after 70.5 years when one has draw out with the RMD, do funds then become exposed
to tax implications your personal money is?

https://www.morningstar.com/funds/xnas/vwenx/quote.html

https://finance.yahoo.com/quote/VWENX?p ... c=fin-srch

I think I have some tax info to work with
https://investor.vanguard.com/investing ... nvestments

MotoTrojan
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by MotoTrojan » Wed Mar 13, 2019 4:02 pm

rollretirement wrote:
Wed Mar 13, 2019 2:35 pm
ZLMARK wrote:
Wed Mar 13, 2019 2:30 pm
If it were me I would stay entirely with VWENX and just hold. That's an awsome fund.
After running PortfolioVisualizer with some of the funds mentioned, that's what I'm thinking too. FireCalc shows 100% success at both 50/50 and 65/35 so maybe I should leave well enough alone and just learn to sleep better. :)
I would not count on it’s returns staying where they are but could certainly do worse. Too undiversified for me still and it did very well due to the bond bull.

dbr
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Re: Want to go 50/50 VWENX/VWIAX....how?

Post by dbr » Wed Mar 13, 2019 5:07 pm

rollretirement wrote:
Wed Mar 13, 2019 11:40 am
Sorry for asking a very newbie question and also sorry if it's been asked a million times.

I am looking to retire in June 2019 at age 60 (DW is 59). We are currently invested approx 95% in Wellington in our tIRA. I am thinking about moving from the 65/35 Wellington fund to a 50/50 split with Wellington and Wellesley. I will sleep better at night (I think). Here is the dumb question part - when making this move, is it as simple as doing it all in one transaction or do I need to spread it out over a period of time due to tax consequences?

I appreciate any and all advice and feedback.
1) What other people said, just do it as no reason to wait.

2) You could well have less anxiety with less in stocks. The survival of your portfolio under withdrawal is about the same across that range. More in stocks means trying to end up with a somewhat larger portfolio at the end but with more uncertainty of getting there.

3) Like some others I am not a fan of taking on manager risk in actively managed funds, but those funds would be low on the list of those having a red flag.

4) You don't indicate any other investments or sources of income. It is hard to really say a lot without knowing the whole picture.

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