AA question? Wellesley?

[Tailgate]

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..

[bondi688]

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.

[prototype]

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.

[racy]

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.

[Lsbcal]

Quote:

Originally Posted by Tailgate ...(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.

[Katsmeow]

Quote:

Originally Posted by bondi688 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.....

[Ronstar]

Quote:

Originally Posted by Lsbcal …. 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

[Chuckanut]

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.

[stonelew]

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