Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
AA question? Wellesley?
Old 11-15-2013, 09:03 AM   #1
Full time employment: Posting here.
Tailgate's Avatar
 
Join Date: Jul 2013
Location: Texas
Posts: 881
AA question? Wellesley?

Just moved my retired DW's 403b into a Vanguard tIRA, specifically in a MM account awaiting decisions on future AA into index funds. She's 57, so we have a few years before this account is ready for drawdowns.

I'm 62 and out at the end of the year with a 401k planning to move to a tIRA and begin drawdowns immediately to supplement pensions, SS. My planned (but flexible) thoughts on AA are 30% Total Stock Index, 10% Intl Index, 30% Total Bond Index and 30% TIPS. This was the recommendation from Boglehead's guide and I've reviewed the expenses and history and it it looks pretty solid.

Looking for thoughts on allocating DW's portion. Is it good practice to take a different approach entirely? I wouldn't think both nest eggs need to have the exact same strategies, but your thoughts will be helpful in this.

What about Wellesley Admiral shares? Still bond heavy, but different funds.
I also am liking Scott Burns approach with his couch potato type allocations.

Btw, our assets are pretty much evenly split between her nest egg and mine.

I'm probably not providing the right kind of info.. I'm not very savvy on this yet. thanks..
__________________

__________________
Tailgate is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-15-2013, 09:28 AM   #2
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Wellesley, which is bond heavy is vastly under-performing other Vanguard stock mutual funds this year. YTD it is 7.93, compared to Wellington that returned 17.26 and S&P Index 27.87 and Total Stock Index of 28.81.

Although you wonder whether buying into stock funds now is buying at the top of the market.
__________________

__________________
bondi688 is offline   Reply With Quote
Old 11-15-2013, 09:34 AM   #3
Recycles dryer sheets
prototype's Avatar
 
Join Date: Mar 2011
Posts: 174
I did not verify with the prospectus, but Wellesley is roughly 2/3 bonds, and 1/3 equities. Wellington is basically just the opposite. Both mostly (all?) Domestic. So a 50/50 split of 60% of your assets between the two would provide roughly 30% Total Stock Index, 30% Total Bond Index.

If you are going Vanguard, I believe they have some decent Total Stock Index funds, Total Bond Index funds and various flavors of Intl. funds. No idea which is the best way to go with the 60% if you are using Vanguard (i.e. W&W vs. the bond and stock specific index funds). Check the prospectus for each fund and see what others have to say here. I'm sort of a couch potato investor too so I keep a fair amount of assets in both Vanguard's W and W funds.
__________________
prototype is offline   Reply With Quote
Old 11-15-2013, 09:40 AM   #4
Recycles dryer sheets
racy's Avatar
 
Join Date: May 2007
Posts: 483
Your IRA is 40/60 equities/bonds in index funds. Putting DW's IRA in Wellesley maintains the 40/60 allocation, since her nest egg is the same size as yours. I am personally OK with having some money indexed and other money managed. (And, I don't fear short term declines in bond prices; I'm in it for the long haul).

I don't know what's in Burn's portfolios ... but if you have to pay an adviser to create it, then I fear it's too costly.
__________________
The Big Lebowski: Are you employed, sir?
The Dude: Employed?
racy is offline   Reply With Quote
Old 11-15-2013, 08:43 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,696
Quote:
Originally Posted by Tailgate View Post
...(snip)...
I'm 62 and out at the end of the year with a 401k planning to move to a tIRA and begin drawdowns immediately to supplement pensions, SS. My planned (but flexible) thoughts on AA are 30% Total Stock Index, 10% Intl Index, 30% Total Bond Index and 30% TIPS. This was the recommendation from Boglehead's guide and I've reviewed the expenses and history and it it looks pretty solid.
I think Boglehead's are great but they don't always get it quite right. You won't probably go bust though. Some personal thoughts:
1) Your equities at 40% is conservative but maybe OK.
2) I would not do Total Bond Index as it has gravitated over the years to too much US government debt. My choice is DODIX and BOND, at 50/50.
3) 30% TIPS -- do not do this at this time. Real rates are way lower then historical real rates. Educate yourself about the real rate history of bonds. Hint: 5 year real rates are about 2.3% but 5 year TIPS are negative right now.

I've been blunt but at least concise. These are just my opinions, of course. Hope I don't hurt any feeling here.
__________________
Lsbcal is online now   Reply With Quote
Old 11-15-2013, 08:59 PM   #6
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,400
Quote:
Originally Posted by bondi688 View Post
Wellesley, which is bond heavy is vastly under-performing other Vanguard stock mutual funds this year. YTD it is 7.93, compared to Wellington that returned 17.26 and S&P Index 27.87 and Total Stock Index of 28.81.
Well this is comparing apples and oranges. Wellesley is 2/3 bonds so, of course, it is going to trail anything that is all equities or is majority equities.....
__________________
Katsmeow is offline   Reply With Quote
Old 11-16-2013, 07:20 AM   #7
Moderator
Ronstar's Avatar
 
Join Date: Aug 2007
Location: A little ways southwest of Chicago
Posts: 9,370
Quote:
Originally Posted by Lsbcal View Post
.
2) I would not do Total Bond Index as it has gravitated over the years to too much US government debt. My choice is DODIX and BOND, at 50/50.
..
I agree. Total Bond is down 1.8%. I initially went into Total Stk, Total bond, and International Stk. I'm looking to move my bonds to a different fund. Thanks for the tip on DODIX and BOND
__________________
Ronstar is online now   Reply With Quote
Old 11-16-2013, 11:21 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,337
Assuming you and your wife look at your total assets as belonging to both of your, regardless of whose name they are under, you probably are best treating them as one group of assets and apply your AA to them overall. This may give you more flexibility when it comes to doing things like putting ordinary income assets into IRA's and capital gain assets into regular accounts. My 2 cents.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 11-16-2013, 12:23 PM   #9
Confused about dryer sheets
 
Join Date: Oct 2013
Location: austin
Posts: 1
I treat Wellesley as part of my fixed income.a bond fund with a bit of a kicker and a decent coupon.I also own Wellington but consider that part of equity. Second the opinion of DODIX
__________________

__________________
stonelew is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 01:20 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.