Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 05-08-2010, 10:15 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
easysurfer's Avatar
Join Date: Jun 2008
Posts: 6,466
Originally Posted by Gotadimple View Post
How many times during the year do you plan on re-balancing?

What threshold would you use to signal re-balancing and which assets are out of balance?

Check the FAQ here for book references that can help with your definition.

-- Rita
I plan on rebalancing once a year, unless things get too out of whack.

My threshold is when the assets are more than 5% away from my target allocations.

easysurfer 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 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 05-08-2010, 10:42 AM   #22
Alan's Avatar
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 18,925
Originally Posted by easysurfer View Post
I plan on rebalancing once a year, unless things get too out of whack.

My threshold is when the assets are more than 5% away from my target allocations.

Retired in Jan, 2010 at 55
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 05-08-2010, 11:01 AM   #23
gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,855
Originally Posted by ksr View Post
This question is for those of you who specifically allocate a "cash bucket" in your AA to cover a specified number of years. Do you factor in expected dividends and interest each year?
I maintain a target of 3-4 years in my retirement cash bucket, which also includes 15% assumed taxes due (since the majority of my holdings are tax-deferred). I withdraw my budget amount each month, and pay the taxes at that time (via VG/Fidelity). In early December, I get the latest TT version and run my taxes for the year. Depending on the result, I'll change my tax withdrawn for December (usually I'm a bit over, so I don't need to take out as much tax in my December "income").

I'm fairly anal when it comes to budget tracking (forecast vs. actual) so it's not a difficult exercise to determine how many months/years of income I actually have at any point in time.

I don't factor in dividends/interest from other holdings, since I'm a total return investor. When a fund rises up above a defined pre-determined set point, I'll sell the "excess" and add it to cash (not in less than $5K amounts) if need be.

Sales are not made only from equity, but also bond holdings to ensure I can keep my current AA target.

FWIW, I do include my cash bucket within the bond portion of my AA. At this time (early retirement years, with no SS or pension income) the actual dollar amount is quite high. If I would remove it from my AA, this would result in an "imbalance" and would lower my equity holdings (e.g. I would be selling off equity holdings to get a higher bond portion). Also, looking at the cash bucket in addition to my total bond holdings gives me a long term view of possible income from fairly "safe" holdings (e.g. not equity funds).

As other income streams come on-line over the next eight years (till I draw spousal SS at age 66 and my SS at age 70) the amount of cash actually held will be greatly reduced.

rescueme is offline   Reply With Quote

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

Similar Threads
Thread Thread Starter Forum Replies Last Post
Insurance Industry Fast-Track Proposal to reduce Reserves chinaco FIRE and Money 15 01-05-2009 08:06 AM
considering Military Reserves Keyboard Ninja Other topics 10 10-27-2008 03:27 PM
I CAN'T bring myself to use my cash reserves!! thefed FIRE and Money 18 02-28-2008 05:51 PM
Reserves/NG and the 40-year pay tables Nords FIRE and Money 9 02-15-2007 10:12 PM
Chinese Foreign Currency Reserves Maximillion Other topics 2 04-22-2006 07:48 AM


All times are GMT -6. The time now is 03:23 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.