Octogenarians Vanguard Portfolios…

[SeeMoe]

We are curious to see others views and opinions regarding our current Vanguard Group portfolios that we started investing in with two T-IRA accounts in 1984. We were 60/40 AA until age 71 when RMD’s began and reduced the asset allocations to 50/50, then, currently, to 35/53/12. 12% being Treasury money markets.
The combined traditional IRA’s are : Total bond market $ 175,000.00, Intermediate term treasury bonds $ 75,000.00, Wellington Equity Income fund $155,000.00. (2023 RMD $22,000.00)

Taxable joint Folio: 500 stock fund $112,000.00, tax managed Capital appreciation fund $90,000.00, Developed markets fund $40,000.00. ( Individual stocks: General Mills $36,000.00, Johnson and Johnson $ 30,000.00, Pennsylvania Power Light $ 20,000.00, IBM $16,000.00.)
Total bond market fund $ 55,000.00, Intermediate term treasury fund $60,000.00, Intermediate term tax exempt bond fund $ 199,000.00, Limited term tax exempt bond fund $ 172,000.00. Treasury money market $158,000.00.

Maintain $15,000.00 in credit Union checking, MM account. Moved to a 5 star CCRC cottage 12 years ago with , currently, $3,400.00 month rent. (Entrance fee, with personal upgrades to the cottage, at $340,000.00. Non-refundable.) Estimated annual cost of living for 2023 at $88,000.00. We have very good medical insurance and no bills. 2022 SUV $54,000.00, 2023 sport SUV $67,000.00. Annual pensions, SS, $147,000.00. Chronic health problems that come with age. Wills, trusts with lawyers who are also the executors and work with the Vanguard Group Trust Services as we age.
MOE…Only tap investments for occasional big ticket items. We want to keep what we have and are thinking about investing in only treasury MM’s, CD’s, Treasury Bills vs current folios??

[livesoft]

I'm sorry but it is difficult for me to understand what you posted. That's probably because it doesn't follow the recommended Asking Portfolio Questions format shown here: https://www.bogleheads.org/wiki/Asking_ ... _questions In particular, dollar amounts instead of percentages of total portfolio (all adding up to 100%) are hard to think about.

We have had a portfolio at Vanguard continually since 1982.

[SeeMoe]

Gee, here I thought that I had explained the portfolios and pension income and outlays and request for opinions rather well?
MOE

[Nightowl99]

Dear Moe,

It sounds as if your income exceeds your expenses by a comfortable margin, so maybe you've "won the game," as the Bogleheads say. I'm guessing you could get away with investing only in money market funds, CDs, and treasury bills if that's what you prefer. Your current portfolio sounds as if it would have a better chance of keeping up with inflation, though. Your individual stocks are probably good blue-chip stocks, but I imagine the BH thing to do would be to exchange them for shares of Total Stock Market or more of the S&P500 fund. Also, later on, if you wanted to save some money, consider selling one of the SUVs. It looks like you're doing fine as you are, though.

[Nightowl99]

p.s. I forgot to say--and you probably know already: don't sell anything in the taxable account before considering what the capital gains will be. It may not be a good idea to sell funds in your taxable account unless there's a way for you to use tax loss harvesting, for example. Keep asset location in mind too. That is, as much as possible, keep the bond funds in the tIRA, and so on.

[SeeMoe]

The individual stocks are just my play thing really. I prefer the 500 stock fund though and read where a retiree folio should be in large quality caps stocks , and quality bonds. Our entertainment now is taking local nature drives nearby, so I use the two SUV’s alternately to slow down the wear. The way we did in the Army with two pairs of boots.
So you think the portfolios are basically ok as they are then. I’d like to have a one time for fee folio analysis done like was the case with Vanguard when we have one done in August 2001. Still have the booklet Vanguard provided with different investment scenarios, recommendations.
Thank you,
MOE…
Yes, selling can cause tax headaches and yes, the T.IRA’s are off limits per sales. I’m staying Pat with the described portfolios for now.

[Miriam2]

. . . Wills, trusts with lawyers who are also the executors and work with the Vanguard Group Trust Services as we age.

SeeMoe (happy to see you back on the forum ) - I thought you were with Vanguard Personal Advisors? Is your portfolio with PAS, or only the trusts? And how does that play into your portfolio questions?

[delamer]

Gee, here I thought that I had explained the portfolios and pension income and outlays and request for opinions rather well?
MOE

A big advantage of the preferred format is that there’s lots of white space.

[SeeMoe]

. . . Wills, trusts with lawyers who are also the executors and work with the Vanguard Group Trust Services as we age.

SeeMoe (happy to see you back on the forum ) - I thought you were with Vanguard Personal Advisors? Is your portfolio with PAS, or only the trusts? And how does that play into your portfolio questions?

PAS only briefly. As I said before the old Vanguard folio analysis we did in August 2001 was the best with a booklet detailing how to save on taxes and allocation with several scenarios. Then we had to execute. Which we did during the 911 meltdown. So what do you think about my current post…Hold, Sell, Be Safe?
MOE

[Steelersfan]

You should decide what your plans are for your portfolio when the inevitable happens. In broad terms my situation is not dissimilar to yours. I have decided I'm investing my portfolio for my grown children and their families.
I'm 76 and I'm at 66%/34%. I expect to stay in that general range for the duration.

[swylie]

You've done very well and obviously understand how to manage your portfolio. One consideration is simplification as you get older, especially for your partner. Recently I decided to change our portfolio to a single fund per account so that going forward, almost no management is required and if something happens to me, my DW won't need to do anything (RMD service makes most transactions automatic). We maintain a 60/35/5 AA (we're bit closer to 70 than you are) but are comfortable with that split. We use VFIAX (S&P 500) in taxable and Roth and VWIAX (Wellesley Income) and VBIAX (Balanced index) in our tIRAs. One fund per each account makes things very simple and achieves our desired allocation.

[smectym]

I'm sorry but it is difficult for me to understand what you posted. That's probably because it doesn't follow the recommended Asking Portfolio Questions format shown here: https://www.bogleheads.org/wiki/Asking_ ... _questions In particular, dollar amounts instead of percentages of total portfolio (all adding up to 100%) are hard to think about.

We have had a portfolio at Vanguard continually since 1982.

I don’t mind the dollar amounts, they add color and sometimes a certain asset level might elicit a different set of responses from the forum—but agree with livesoft, percentage of portfolio is, appropriately, the default protocol.

[ruralavalon]

We are curious to see others views and opinions regarding our current Vanguard Group portfolios that we started investing in with two T-IRA accounts in 1984. We were 60/40 AA until age 71 when RMD’s began and reduced the asset allocations to 50/50, then, currently, to 35/53/12. 12% being Treasury money markets.
The combined traditional IRA’s are : Total bond market $ 175,000.00, Intermediate term treasury bonds $ 75,000.00, Wellington Equity Income fund $155,000.00. (2023 RMD $22,000.00)

Taxable joint Folio: 500 stock fund $112,000.00, tax managed Capital appreciation fund $90,000.00, Developed markets fund $40,000.00. ( Individual stocks: General Mills $36,000.00, Johnson and Johnson $ 30,000.00, Pennsylvania Power Light $ 20,000.00, IBM $16,000.00.)
Total bond market fund $ 55,000.00, Intermediate term treasury fund $60,000.00, Intermediate term tax exempt bond fund $ 199,000.00, Limited term tax exempt bond fund $ 172,000.00. Treasury money market $158,000.00.

Maintain $15,000.00 in credit Union checking, MM account. Moved to a 5 star CCRC cottage 12 years ago with , currently, $3,400.00 month rent. (Entrance fee, with personal upgrades to the cottage, at $340,000.00. Non-refundable.) Estimated annual cost of living for 2023 at $88,000.00. We have very good medical insurance and no bills. 2022 SUV $54,000.00, 2023 sport SUV $67,000.00. Annual pensions, SS, $147,000.00. Chronic health problems that come with age. Wills, trusts with lawyers who are also the executors and work with the Vanguard Group Trust Services as we age.
MOE…Only tap investments for occasional big ticket items. We want to keep what we have and are thinking about investing in only treasury MM’s, CD’s, Treasury Bills vs current folios??

You are in very good shape in my opinion, so almost any asset allocation might be reasonable. It all depends on your goals.

If you have descendents and want a large legacy for them, or want to leave large bequests to charity, then you could use a more aggressive asset allocation. If not then you could use an even more conservative asset allocation than your current 35/65 and put everything in federally insured savings accounts, federally insured CDs, short-term Treasury bonds or treasury money market funds, or a combination of of those.

For what it's worth I am 77, have more than the average in serious chronic medical issues, probably a reduced life expectancy, live in a continuing care retirement community (CCRC). My current annual withdrawal rate is just 3.6% of portfolio. I spend only about 57% of my income, which income consists only of Social Security benefits and Required Minimum Distributions (RMDs), with no pension or annuity. Any extra from RMDs goes back into the portfolio.

I have 4 children and 4 grandchildren, and want to leave them a good inheritance. My current asset allocation is 60/40, I have a one-fund portfolio consisting of Vanguard Balanced Index Fund (VBIAX).

[SeeMoe]

We are curious to see others views and opinions regarding our current Vanguard Group portfolios that we started investing in with two T-IRA accounts in 1984. We were 60/40 AA until age 71 when RMD’s began and reduced the asset allocations to 50/50, then, currently, to 35/53/12. 12% being Treasury money markets.
The combined traditional IRA’s are : Total bond market $ 175,000.00, Intermediate term treasury bonds $ 75,000.00, Wellington Equity Income fund $155,000.00. (2023 RMD $22,000.00)

Taxable joint Folio: 500 stock fund $112,000.00, tax managed Capital appreciation fund $90,000.00, Developed markets fund $40,000.00. ( Individual stocks: General Mills $36,000.00, Johnson and Johnson $ 30,000.00, Pennsylvania Power Light $ 20,000.00, IBM $16,000.00.)
Total bond market fund $ 55,000.00, Intermediate term treasury fund $60,000.00, Intermediate term tax exempt bond fund $ 199,000.00, Limited term tax exempt bond fund $ 172,000.00. Treasury money market $158,000.00.

Maintain $15,000.00 in credit Union checking, MM account. Moved to a 5 star CCRC cottage 12 years ago with , currently, $3,400.00 month rent. (Entrance fee, with personal upgrades to the cottage, at $340,000.00. Non-refundable.) Estimated annual cost of living for 2023 at $88,000.00. We have very good medical insurance and no bills. 2022 SUV $54,000.00, 2023 sport SUV $67,000.00. Annual pensions, SS, $147,000.00. Chronic health problems that come with age. Wills, trusts with lawyers who are also the executors and work with the Vanguard Group Trust Services as we age.
MOE…Only tap investments for occasional big ticket items. We want to keep what we have and are thinking about investing in only treasury MM’s, CD’s, Treasury Bills vs current folios??

You are in very good shape in my opinion, so almost any asset allocation might be reasonable. It all depends on your goals.

If you have descendents and want a large legacy for them, or want to leave large bequests to charity, then you could use a more aggressive asset allocation. If not then you could use an even more conservative asset allocation than your current 35/65 and put everything in federally insured savings accounts, federally insured CDs, short-term Treasury bonds or treasury money market funds, or a combination of of those.

For what it's worth I am 77, have more than the average in serious chronic medical issues, probably a reduced life expectancy, live in a continuing care retirement community (CCRC). My current annual withdrawal rate is just 3.6% of portfolio. I spend only about 57% of my income, which income consists only of Social Security benefits and Required Minimum Distributions (RMDs), with no pension or annuity. Any extra from RMDs goes back into the portfolio.

I have 4 children and 4 grandchildren, and want to leave them a good inheritance. My current asset allocation is 60/40, I have a one-fund portfolio consisting of Vanguard Balanced Index Fund (VBIAX).

Thank you. We are in a CCRC too. 12 years now. We have a missionary group with family ties in our will. Plus some in-laws,. One fund, eh. Sounds interesting. See other post who has just one fund in each folio…

[SeeMoe]

You've done very well and obviously understand how to manage your portfolio. One consideration is simplification as you get older, especially for your partner. Recently I decided to change our portfolio to a single fund per account so that going forward, almost no management is required and if something happens to me, my DW won't need to do anything (RMD service makes most transactions automatic). We maintain a 60/35/5 AA (we're bit closer to 70 than you are) but are comfortable with that split. We use VFIAX (S&P 500) in taxable and Roth and VWIAX (Wellesley Income) and VBIAX (Balanced index) in our tIRAs. One fund per each account makes things very simple and achieves our desired allocation.

3 excellent funds! And a novel strategy too. Keeping it simple.
MOE.

[SeeMoe]

I'm sorry but it is difficult for me to understand what you posted. That's probably because it doesn't follow the recommended Asking Portfolio Questions format shown here: https://www.bogleheads.org/wiki/Asking_ ... _questions In particular, dollar amounts instead of percentages of total portfolio (all adding up to 100%) are hard to think about.

We have had a portfolio at Vanguard continually since 1982.

I don’t mind the dollar amounts, they add color and sometimes a certain asset level might elicit a different set of responses from the forum—but agree with livesoft, percentage of portfolio is, appropriately, the default protocol.

Adding up the percentages takes a lot of time for me. So I just use the current amounts instead. Today the 500 is over $113,300.99.
MOE

[SeeMoe]

You should decide what your plans are for your portfolio when the inevitable happens. In broad terms my situation is not dissimilar to yours. I have decided I'm investing my portfolio for my grown children and their families.
I'm 76 and I'm at 66%/34%. I expect to stay in that general range for the duration.

Interesting, and I see your plan is for the heirs with the excess monies. I’ve considered that option as well, but then hesitate due to the health unknowns!
MOE…

[delamer]

You should decide what your plans are for your portfolio when the inevitable happens. In broad terms my situation is not dissimilar to yours. I have decided I'm investing my portfolio for my grown children and their families.
I'm 76 and I'm at 66%/34%. I expect to stay in that general range for the duration.

Interesting, and I see your plan is for the heirs with the excess monies. I’ve considered that option as well, but then hesitate due to the health unknowns!
MOE…

What happens in your CCRC, fee wise, if you or your spouse needs a higher level of care?

[SeeMoe]

You should decide what your plans are for your portfolio when the inevitable happens. In broad terms my situation is not dissimilar to yours. I have decided I'm investing my portfolio for my grown children and their families.
I'm 76 and I'm at 66%/34%. I expect to stay in that general range for the duration.

Interesting, and I see your plan is for the heirs with the excess monies. I’ve considered that option as well, but then hesitate due to the health unknowns!
MOE…

What happens in your CCRC, fee wise, if you or your spouse needs a higher level of care?
Well, we are guaranteed care, and the Masons take care of their own here if need arises.plus I’m 100% DAV.

[delamer]

You should decide what your plans are for your portfolio when the inevitable happens. In broad terms my situation is not dissimilar to yours. I have decided I'm investing my portfolio for my grown children and their families.
I'm 76 and I'm at 66%/34%. I expect to stay in that general range for the duration.

Interesting, and I see your plan is for the heirs with the excess monies. I’ve considered that option as well, but then hesitate due to the health unknowns!
MOE…

What happens in your CCRC, fee wise, if you or your spouse needs a higher level of care?
Well, we are guaranteed care, and the Masons take care of their own here if need arises.plus I’m 100% DAV.

DAV? Disabled veteran?

My thought was if your fee stays the same for higher levels of care, then your risk of depleting your portfolio shrinks dramatically.

Plus your pensions more than cover your current expenses.

So you would effectively be investing for your heirs.

[Artsdoctor]

At a glance, your financial resources appear to be fine. If you're in your 80's, I'd consider simplifying your portfolio make-up so that your spouse or other trusted family members could maintain your hard work in a manner they'd understand. You can enjoy the individual stocks but think about how you'd like to turn over the portfolio if you couldn't do the work yourself.

[SeeMoe]

At a glance, your financial resources appear to be fine. If you're in your 80's, I'd consider simplifying your portfolio make-up so that your spouse or other trusted family members could maintain your hard work in a manner they'd understand. You can enjoy the individual stocks but think about how you'd like to turn over the portfolio if you couldn't do the work yourself.

Leaning toward letting it go as is for now. I’ve gone over the folios with the wife and we’ve made a list of the assets for our lawyers and VGTS.
MOE..