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Old 04-23-2016, 06:49 AM   #21
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I dunno. Some people prefer belts AND suspenders... nothing wrong with that. To each his own.
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Old 04-23-2016, 07:40 AM   #22
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Quote:
Originally Posted by RunningBum View Post
If you're seeing a doctor about some medical condition, don't you also google the condition, and ask around about it?
+1

Some stuff is too important to hand control completely over to someone else, even an expert.

But this also had me think of a scene in House of Cards . . .

Doctor: "I thought you asked me for a second second opinion?"

Frank Underwood: "I didn't ask for a second opinion. I asked for a different opinion."
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Old 04-23-2016, 08:37 AM   #23
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Originally Posted by RunningBum View Post
If you're seeing a doctor about some medical condition, don't you also google the condition, and ask around about it? You're paying the doctor good money, but doesn't it also make sense to be more informed? Most everyone else you ask may not have the expertise, but may have useful practical experience, plus even the expert can overlook something. Same thing here, don't you think?

Plus, in the OP's other thread, people were critical of him having an FA, that he could follow simple advice here and be just as successful without the fees. But now you're saying he can't even dip his toes into the water of trying to get advice here, while keeping the safety net of having an FA? Does it have to be one or the other? Does he have to drop the FA before he can make any attempt to educate himself?

No wonder there are people reluctant to admit they are using an FA.
That's a fair appraisal. I'm not sure a medical analogy works, though. You do have a copay, but medical cost is far beyond that, and is paid by insurance.

I don't think I said he can't ask for advice here. You read a bit more into what I wrote. I can't possibly cross reference this thread to other threads and get the details right. BTW, I kinda stick up for people who have FA at this moment in time. I view it as the person with FA is either starting to question the unseen details, or has already appraised the situation as one of declining value from the FA.

I did answer the question directly, and provided a link so he can examine AA charts and accompanying factors, and respond.

If I had 12,5 I'd like to believe that I had a handful of trusted associates, and together we each became learned about subjects outside of our focus.

Since most of OP's investments are in taxable, I'd place more emphasis on tax planning. OP situation is more complex than anything I've ever had to understand.
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Old 04-23-2016, 09:25 AM   #24
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...

I don't know what your needs are, but that is the beginning point of discussion. If your portfolio can support your needs with 2% safe withdrawal, ... .
As far as I know (maybe it was posted here, or in some other thread and I missed it?), the OP has not mentioned his desired spending and/or other income (SS, other? I see he mentioned no pension).

The planned WR is a factor - I think someone else mentioned, if it is low enough, and no desire to pass on an estate, it really doesn't much matter what your AA is, at least historically, either extreme can support a low enough WR%.

But he's not sharing (again, unless I missed it) important info, so he shouldn't expect a whole lot from the responses, we are sort of replying in a vacuum. I don't see much value in comparing that advice to his FA's advice, who I assume knows all this?

And I'm not one to be aghast at any high spend plan. It's his money, if he wants to spend a lot of it, that's his choice. But we can provide advice on how to do that, and discuss the risks involved.

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Old 04-23-2016, 09:47 AM   #25
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medved -

The firecalc tool (linked at the bottom of the page) can be very useful for looking at things like asset allocation. One of the tabs lets you input different asset allocations. (The "Your Portfolio" tab). You'll want to adjust the expense ratio UP to reflect the FA fees - it defaults to 0.18% - typical of low cost index funds and no FA.

Members have reported their experimentation with changes to the portfolio AA - and if the withdrawal rate is 3.5% (inclusive of the FA fees, so lower than that net) or lower, anything between 30/70 and 70/30 survived fairly well.

Here are some threads from the past on these experiments.
Firecalc calculator sensitivity to asset allocation

Firecalc, AA, and SWR
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Old 04-23-2016, 09:53 AM   #26
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Went looking last night and couldn't find. But here is a useful tool:

https://personal.vanguard.com/us/ins...uth-about-risk

The options on the charts and graphs aren't obvious. Take some time to explore.

There are other "articles" in the series, too.
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Old 04-23-2016, 04:42 PM   #27
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Thanks for all the input. Some of you wondered why, if I have an FA, I would also seek input from random people on the internet. The answer is pretty simple: Throughout my life I have found that the more input and ideas I get, the better my decision making is. (I especially value input from smart people who see things differently than I do, and who therefore are able to challenge my assumptions and my way of thinking). So whatever you tell me gives me some things to think about and some things to discuss with my FA. Don't worry, I am not going to go out and do something just because someone on this forum tells me it is what he or she would do (even if said with a great deal of confidence). But the input is still very useful and I am grateful for it.

Some of you said I have not mentioned what I intend to spend every year in retirement. That is true but it is not because I am hiding anything. I just really do not know. And I don't think my spending these days will be a very good guide, because there are a bunch of things I am spending money on now that are likely to go away when I retire, and a bunch of new expenses. For purposes of some rudimentary modeling, I have been using $350,000 per year in after tax and after paying my FA expenses. I have not used that number because I actually think I will spend that much money. I don't. But if my plan works, with a very high level of confidence, using that sort of very high expenditure, then it seems like a plan I can be totally comfortable with. Then I can look at how little risk I can take and still have a very high level of confidence that such a plan will work.
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Old 04-25-2016, 06:48 AM   #28
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I do. But I am still interested in the views of other thoughtful people. At a minimum, it can give me ideas to discuss with the financial advisor.
And then there is this interesting piece from Michael Kitces:

https://www.kitces.com/blog/should-e...tually-better/
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Old 04-25-2016, 08:44 AM   #29
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... there are a bunch of things I am spending money on now that are likely to go away when I retire, and a bunch of new expenses. For purposes of some rudimentary modeling, I have been using $350,000 per year in after tax and after paying my FA expenses. I have not used that number because I actually think I will spend that much money. I don't. But if my plan works, with a very high level of confidence, using that sort of very high expenditure, then it seems like a plan I can be totally comfortable with. Then I can look at how little risk I can take and still have a very high level of confidence that such a plan will work.
OK, it would be helpful for you to plug in your retirement sources of income into a tax program to understand what you will be paying in taxes. That can be highly variable, depending on the source of income. Your FA should gladly do this for you, I would think. But if that means $350 + $75 for FA, you are at a 3.4% WR before taxes. The 4% guidepost includes 5% historical failures for just 30 years, so I personally would not consider >3.4% as super conservative. But as you point out, that's probably the high end of your spending.

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Old 04-25-2016, 08:51 PM   #30
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Medved, (a bear) lives during winter of their fat, gained during rest of the year. In comparison when you are planning retirement (your Golden Years), you do not have to take a risk with riskier investments while you can live of what you had already gained. As it was noted above, 2% would give you $250K annually. Congratulation.
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Old 04-27-2016, 09:07 PM   #31
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Vpgdx-vanguard manage payout investor
Anyone using this to manage their own finances ?
I heard it pays 4% it dropped to 3 one year but over all you draw 4 is what I heard. Going to do some reading on it


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Old 04-28-2016, 10:03 AM   #32
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Medved, (a bear) lives during winter of their fat, gained during rest of the year. In comparison when you are planning retirement (your Golden Years), you do not have to take a risk with riskier investments while you can live of what you had already gained. As it was noted above, 2% would give you $250K annually. Congratulation.
I agree with that (even though we bears also enjoy salmon, which can be expensive).

With my current 70/30 allocation, I do think I am taking more risk than I need to take. I plan to do the "free" things I can do to dial back the risk -- move equities in the tax deferred account to fixed income, invest dividends/distributions on the fixed income side, and invest new dollars on the fixed income side. The question I am struggling with is whether I should go further and incur capital gain in order to dial back risk. I am reluctant to do that.
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Old 04-28-2016, 10:28 AM   #33
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With my current 70/30 allocation, I do think I am taking more risk than I need to take. I plan to do the "free" things I can do to dial back the risk -- move equities in the tax deferred account to fixed income, invest dividends/distributions on the fixed income side, and invest new dollars on the fixed income side. The question I am struggling with is whether I should go further and incur capital gain in order to dial back risk. I am reluctant to do that.
If I understand your numbers correctly, your only real risk is a market fall that would diminish but not eliminate a nice cushion you have. No real risk of losing so much that your needs would not be met. If that is a correct interpretation of your situation, I don't see any value in spending extra money changing your allocation. Just make incremental allocation changes over time by choosing where you pull money for living expenses.
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Old 05-03-2016, 05:57 AM   #34
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i swap funds a few times through the year as things change . now i am about 18% high yield with about 40% of the bond budget in high yield .

high yield had its butt kicked and the markets way over did it in many professional opinions so my corporate bond funds are now gone , i kept some total bond and a few other bond funds but split it with high yield .

i reduced some equity's too and went with more high yield as the growth engine .

the thinking is that if we fall again , high yield likely will not fall as much as stock and if stocks go up we are likely to see the same high single digit gains stocks get from high yield . the high yield fund is paying almost 7% interest plus at the moment some nice appreciation on share price since i bought in . .

so i replaced some of my balanced fund with more allocation to a high yield fund .

my current retirement mix according to the fidelity analysis tool which shows differently then morningstars is now at

29% domestic stock
4% foreign stock
53% bonds with 40% in high yield
14% cash and short term bond .--- this is 2 years withdrawals and an emergency fund .

so this is what i mean by my portfolio is always dynamic . i try to keep the swings in a ceratin over all range but vary the funds via the newsletter as the investing climate shifts with major changes . in this case high yield went from being so over valued to being very under valued .
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