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401(k) Rollover Input
Old 06-20-2005, 07:56 PM   #1
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401(k) Rollover Input

As most of you on the board know, I retired the end of May . Now I'm preparing to rollover my 401(k) to an IRA and I'm looking for input from the distinguished membership of this forum.

Situation: No pension, age 58, planning to begin drawing SS in 3 1/2 years. DW is also retired, 5 years from SS and 8 years from a small pension. Currently on COBRA, then will be on the open market for medical coverage. Home paid for, no mortgage (SG & th, don't either of you read anything into that statement) and don't want to be kept alive with a feeding tube by either politcal party (Art, th, not a word...).

My 401(k) is 77% of our portfolio. Thinking about splitting that amount 50/50 between Dodge & Cox Balanced and Vanguard Wellesley. The D&C Balanced has a higher expense (~.55) vs. Wellesley (~.20), but has an excellent record of performance and has been my core holding for years. The resulting allocation will look something like this:

38% Dodge & Cox Balanced
39% Vanguard Wellesley Income
6% Vanguard Short Term Bond Index
4% Vanguard Total Bond Market Index
2% Vanguard International Value
11% Cash

Comments? Suggestions?

REW

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Re: 401(k) Rollover Input
Old 06-20-2005, 08:28 PM   #2
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Re: 401(k) Rollover Input

REW, IMHO you should increase your allocation to foreign stock to
20-30% of your stock holdings. I would also add REIT at about
10% of your total IRA. Some allocation to unhedged foreign
bonds via GIM would also give you more diversification.

Cheers,

Charlie
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Re: 401(k) Rollover Input
Old 06-20-2005, 08:33 PM   #3
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Re: 401(k) Rollover Input

Quote:
Originally Posted by charlie
Some allocation to unhedged foreign
bonds via GIM would also give you more diversification.
GIM?
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Re: 401(k) Rollover Input
Old 06-20-2005, 09:12 PM   #4
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Re: 401(k) Rollover Input

I could tell before getting to your allocations that you're a smart fella.

Charlies comments are agreeable, although as far as I can see you're 90-95% of the way 'there' and the rest is fine tuning and expensing hormones ;
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Re: 401(k) Rollover Input
Old 06-21-2005, 01:19 PM   #5
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Re: 401(k) Rollover Input

GIM = Templeton Global Income Fund

Currently paying* $..04/month/share which is about 5% plus
an annual kicker that raised dividend to 7% last year.*

This fund invests almost exclusively in sovereign debt of mostly
developed countries.* It is currently at a slight discount to NAV.

I bought some at near $10.00 per share just before it cratered to
about $8.70/share where I doubled up.* GIM is currently about
25% of my IRA bond allocation.*

It is a good hedge against a falling dollar and pays a nice dividend
while you wait.

Cheers,

Charlie
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Re: 401(k) Rollover Input
Old 06-21-2005, 01:39 PM   #6
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Re: 401(k) Rollover Input

I too think you are a little short on international (not advise, just MHO). Vanguard has a number of low cost index type international funds. I am sure there are others as well.
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Re: 401(k) Rollover Input
Old 06-24-2005, 10:26 PM   #7
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Re: 401(k) Rollover Input

Charlie, th, uncledrz:

Appreciate your input. I agree I'm light in foriegn equities and will increase my allocation in that direction. All the bubble talk has me a bit leery of REITs, at least for now.

Thanks again,
REW
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Re: 401(k) Rollover Input
Old 06-25-2005, 03:12 AM   #8
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Re: 401(k) Rollover Input

Oh and maybe take a look at PCRIX too, and maybe a bit of gold metals (VGPMX)?
I also hold GIM. Bought at about current price (close to $9) - unhedged, experienced management, resonable e/r (0.7%) and getting paid to wait is good too. Also I personally believe that the Asien currencies are undervalued(they all follow China to stay competative) and GIM have recently increased exposure there. If not using GIM one could use PFUIX and PEBIX - I currently have them all 3.
Cheers!
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Re: 401(k) Rollover Input
Old 06-25-2005, 07:30 AM   #9
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Re: 401(k) Rollover Input

Quote:
REW, IMHO you should increase your allocation to foreign stock to
20-30% of your stock holdings
I am with Charlie on this one. The Intl market has been pretty good the last few years. I am not saying it will def continue but if you didn't have any money in that area well you missed out on some nice gains + it is better for the portfolio in terms of diversification/reduce volatility.

If you like Dodge and Cox (which happens to be one of the few actives I respect) you can scoop up its Intl Large Value Fund (which I own for now). Or Vanguard's Intl Index Funds or Intl Value. All low expenses and should give you decent returns over time.

New ETFs are coming out all the time and I believe I read an Intl Value ETF will be coming soon.

PCRIX is another great diversifier

GIM --- can't thank Brewer enough for that one; nice diversifier, monthly dividends and solid long term record.

Tough to time anything with respect to your REIT comment. Add some exposure and if it does poorly you will buy more low when you rebalance....er market time the smart way. It will work out over time and that is what matters.
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Re: 401(k) Rollover Input
Old 06-25-2005, 08:46 AM   #10
 
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Re: 401(k) Rollover Input

I find that it's very convenient to have absolutely all my mutual funds at Vanguard. That way, with a few clicks I can find out exactly where I stand, and see my asset allocation, etc.
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Re: 401(k) Rollover Input
Old 06-25-2005, 10:05 AM   #11
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Re: 401(k) Rollover Input

Hey Al,

You can buy any ETF, stock or bond and most funds from other fund companies through a Vanguard Brokerage account. They will
all be shown on your Vanguard Web account. There is no fee
for many of the "outside" funds. Its a transparent world Al.

Cheers,

Charlie
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Re: 401(k) Rollover Input
Old 06-25-2005, 11:16 AM   #12
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Re: 401(k) Rollover Input

Quote:
You can buy any ETF, stock or bond and most funds from other fund companies through a Vanguard Brokerage account. They will
all be shown on your Vanguard Web account
bingo
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Re: 401(k) Rollover Input
Old 06-25-2005, 03:00 PM   #13
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Re: 401(k) Rollover Input

REWahoo,
I hope you're already in the D&C Balanced Fund, as it was closed some time ago.
D&C Stock Fund also closed.
.
Also, since you're 58, if you move the 401k to an IRA, you cannot make withdrawals w/o penalty,,, unless you do a 72t,,,
but, you CAN make periodic withdrawals from your 401k without penalty since you retired after age 55. Then at age 59.5 you can move the 401k into an IRA, take withdrawals w/no penalty.
I apologize if you already knew this stuff,
Enjoy your retirement,
Ray
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Re: 401(k) Rollover Input
Old 06-25-2005, 03:26 PM   #14
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Re: 401(k) Rollover Input

Ray,

No apology necessary, thanks for the info. Yes, I am already in the D&C Balanced Fund in my 401(k). The D&C website says although the fund is closed to 'new' investors, you can open (roll-over) an IRA in the fund if you are currently invested through a 401(k). Have to send them a statement from your 401(k) showing you have $ in the Balanced Fund.

And a second thanks, I am aware of the withdrawal rules around IRA's and 401(k)'s prior to 59.5. I put aside enough cash to get me to the 59.5 milestone without tapping my pre-tax accounts.

Charlie & Al,

I am planning on calling Vanguard next week to check out using them for all my retirement investments, including non-Vanguard funds. Thanks.

REW
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