Puppy Belly
Dryer sheet aficionado
- Joined
- Jan 20, 2008
- Messages
- 46
clifp, thanks for the comments. Good reading. She is warming to the idea of some discussion about the specifics, so progress, yeah.
First, yes, if it were my portfolio, lots of stories on that one but it would derail this nice discussion and learning curve for me.
On CDs, I really agree on the CDs if I were to buy lots, it would be a royal pain, but I researched some pretty solid issues. Wachovia for example, although, their exposure in CA worries Moody's evidently. So yeah, I would shoot for jumbo CDs of 100k and so would need 9 in taxable and 12 in IRA.
But hopefully with them rolling over at 3 year, the 5 years, the hassle is spread out.
I feel that 2mil can safely and sufficiently provide here income, except as you point out, the inflation risk. So, I'm still hopeful. If the port were another 1/2 mil, I would not hesitate.
----
And, thanks for reminding me of my concerns with TR funds. The limited history does not include a real challenging market environment. Will the investing model hold up? Big question in my mind. I wonder if CFB would comment on that part, and share his feeling since he felt comfortable with them. And seems to do due diligence in investing.
----------------
We have bounced the idea of annuities around a bit and she feels exactly as you mention, no access would scare her. AND, her longevity history is as unknown as mine. We both come from a line of stock with early mid-life accidental demise.
----------------
If the CD idea eventually proves a bad choice my next best thought was this:
Taxable
MM Funded for 3 years of expenses
Wellington funded to $800k
IRA
TR2015 funded to $1mil
Both funds set up to pay dividends into the MM.
Or
(still trying to find time to spreadsheet.)
a TBD port based on some of jIMOh suggestions.
PS: my own port "was" MM, VTI, VEU, VWO and BND until Nov, 2007, yep sold at top, except for VWO. Whew.
First, yes, if it were my portfolio, lots of stories on that one but it would derail this nice discussion and learning curve for me.
On CDs, I really agree on the CDs if I were to buy lots, it would be a royal pain, but I researched some pretty solid issues. Wachovia for example, although, their exposure in CA worries Moody's evidently. So yeah, I would shoot for jumbo CDs of 100k and so would need 9 in taxable and 12 in IRA.
But hopefully with them rolling over at 3 year, the 5 years, the hassle is spread out.
I feel that 2mil can safely and sufficiently provide here income, except as you point out, the inflation risk. So, I'm still hopeful. If the port were another 1/2 mil, I would not hesitate.
----
And, thanks for reminding me of my concerns with TR funds. The limited history does not include a real challenging market environment. Will the investing model hold up? Big question in my mind. I wonder if CFB would comment on that part, and share his feeling since he felt comfortable with them. And seems to do due diligence in investing.
----------------
We have bounced the idea of annuities around a bit and she feels exactly as you mention, no access would scare her. AND, her longevity history is as unknown as mine. We both come from a line of stock with early mid-life accidental demise.
----------------
If the CD idea eventually proves a bad choice my next best thought was this:
Taxable
MM Funded for 3 years of expenses
Wellington funded to $800k
IRA
TR2015 funded to $1mil
Both funds set up to pay dividends into the MM.
Or
(still trying to find time to spreadsheet.)
a TBD port based on some of jIMOh suggestions.
PS: my own port "was" MM, VTI, VEU, VWO and BND until Nov, 2007, yep sold at top, except for VWO. Whew.
So many different ways to solve the problem. It is is nice to see the OP actively participating in the thread.
Stepping back a bit; a couple of observations. Pappy Bear you are obviously sophisticated enough investor that you could construct and manage any of these choices.
The real question is what type of investment would your wife be most comfortable managing? This is something none of us is in a position to know. I think spending some time with her going over the pro and cons of each alternative would time well spent.
Example
CD Ladder: Pros very safe investment almost certain to be able to meet retirement needs of $65K
Cons: Total income likely lowest, some inflation risk. Somewhat of hassle/ area for worry when rolling over the CDs. (Before taking over my 82 yearl old mom's finances a few years ago, I always had monthly phones calls
that started with I have a CD maturing what do I do? Even now after handling her finances I find maintaining a CD ladder some what of pain. You either but a lot of 10-20K CD or search very hard to find the best CD for a $100K investment.
Target Retirement or Managed Payout
Pro's: Likely to have best total return. Fairly hassle free.
Cons: Market risk, and some interest rate risk. Limited history means we have no way of knowing how they handle bear or extended turbulent
markets.
Annuities: Almost as safe as CD, very predictable income stream. Zero hassle unless you want to get out of the contract than big hassle and expense.
Cons: Money is gone for use in an emergency, or leaving to heirs or charity. Some risk that the insurance company will fail.
....