58 y/o ready to manage our own investments, but am confused!

[Fodus]

We are 3 years post selling our business of almost 30 years. Children all grown and gone, and debt free. Now we want to travel in our (new to us) Airstream full time. We are facing the reality that we have to not only manage our lifestyles but our retirement funds as well if we don't want to have to go back to work. Our "managed" portfolio is ready for an overhaul if we expect any gainful and lasting results. Our assets include a small commercial building, rental house, and residence. All paid for and unencumbered. Real estate assets currently assessed @ $836,000. Income from rentals and business sale should bring in $103,800 but is not paid consistently and loan to buyer is currently in default. We have $92,000 in annual expense but a good portion of this is discretionary

We have $926,747 in a managed portfolio (14% cash, 74% stocks, 1% fixed rate securities, 1% fixed income securities, 7% open end mutual funds, 2% closed end mutual funds). We have another $68,000 in cash for investing in an unmanaged account. We like the Rational Investing Portfolio found in "Live More, Work Less" but are having trouble getting off the bench and doing it ourselves! We look forward to meeting others and sharing their experiences, strengths, and hope that we'll do more than break even and our nest egg with carry us through to the end.

Hope that's not too much information but in the directions for introductions it said it would be helpful to let others know more than just where we are from!

[Gatordoc50]

Do you mind breaking down the 103k ? Sounds like most of this is from the sale which is in default. Is the managed money in a tax deferred account?

[Fodus]

No problem, the 103K goes like this; $39,000 commercial build rent, $16,000 rental house, $48,000 sale. Balance owed on loan is 152,000 and business is turning around expect payments to resume next month.

All but @ 1/3 of the managed money is in tax deferred account (SEP's)

[Gatordoc50]

Quote:

Originally Posted by Fodus No problem, the 103K goes like this; $39,000 commercial build rent, $16,000 rental house, $48,000 sale. Balance owed on loan is 152,000 and business is turning around expect payments to resume next month. All but @ 1/3 of the managed money is in tax deferred account (SEP's)

I take it that the 48000 per year ends at some time? At first glance it appears that your success will hinge on that being consistent so you don't have to touch the managed accounts.

[Fodus]

Yes, the balance on that loan is $102,000 but we have to restructure with accruing fees and interest. If he picks back up and is consistent we should be looking at 2-2 1/2 years. We should be able to invest most of that with some lifestyle changes we are doing. (Renting our residence and doing some Workamping in our RV.) We are also owed $50,000 for another contract on the sale with the buyer that gets paid out of a profit sharing plan. We agree that success does hinge on that consistency but having no payments (including rent) for a period this past year has made us realize we need to hedge our bets elsewhere!

[Gatordoc50]

Quote:

Originally Posted by Fodus Yes, the balance on that loan is $102,000 but we have to restructure with accruing fees and interest. If he picks back up and is consistent we should be looking at 2-2 1/2 years. We should be able to invest most of that with some lifestyle changes we are doing. (Renting our residence and doing some Workamping in our RV.) We are also owed $50,000 for another contract on the sale with the buyer that gets paid out of a profit sharing plan. We agree that success does hinge on that consistency but having no payments (including rent) for a period this past year has made us realize we need to hedge our bets elsewhere!

My starting point would be expenses. Try to lower them 5 % or so and see how it cramps your style.Secondly, I'd look at asset allocation. Right now you are weighted toward equities. You are looking at about a 5% withdrawal rate now. ( 1.9 mil/ 92k ). If you can get that down to 4% until age 65 then you should be ok. At that time hopefully you will be at 3% with SS. As far as individual investment changes, that depends on what you own now and tax considerations.

[Fodus]

Thank you Gatordoc50, We don't plan on starting any withdrawals for hopefully at least 7-10 years and we've already planned the budget cuts (me mostly). Understanding what we own now is our biggest hurdle since that has not been something we have focused on. My husband, PeteW is on the forum as well and hopefully getting some good direction too.

[obgyn65]

Welcome, Fodus. It seems you are on a good path.