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How many funds to use during retirement
Old 03-15-2010, 09:16 AM   #1
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How many funds to use during retirement

How many funds (or ETFs) do you use once you reach ER. Do you limit any one fund to 30% of your overall portfolio - or do you use a Target Retirement Date fund to handle 100% of your portfolio?

If you want a 50/50 split - would you allow a single stock or bond index fund to handle 50% of your total portfolio? I don't like the slice - dice approach but I worry about a single investment holding 50% of my retirement assets.

I would really appreciate hearing how others are handling this issue.


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Old 03-15-2010, 09:32 AM   #2
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Vanguard currently (at least often) recommends a portfolio of just 3 funds; Total Stock Market, Total International and Total Bond. The LOWEST percentage possible for a fund here is 33 1/3%. Of course these are all index funds and no manager risk is involved. Fyi, we use 6 funds including money market with 3 being balanced. Largest holding is about 30% (Wellesley, see another recent thread) which seems about right.

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Old 03-15-2010, 10:03 AM   #3
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We have four funds (Total Stock Market, Total International, Total Bond & Inflation-Protected Securities) plus a money market account. We sleep well at night.
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Old 03-15-2010, 10:42 AM   #4
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I have about 40 because I have about 16 different accounts. I don't think one can generalize about how many funds one should have.
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Old 03-15-2010, 10:45 AM   #5
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5 funds at Vanguard (Wellesley, 2 stock index funds, 2 bond index funds)
30% in Wellesley, smaller percentage in each of the others

Plus - -
* TSP G Fund (bond fund but guaranteed not to lose value, like cash)
* cash in the bank and in a money market fund at Vanguard
* a four figure Roth which is for fun/impulse investing

Income sources - -
* Dividends from the five Vanguard funds during good market years
* Small pension
* Equal monthly withdrawals from the G Fund
* SS eventually, at which time I will lower the G Fund withdrawal amount by half the SS payment

Personally I really like the investing advice offered at the Bogleheads' forum - - many of our members also participate there, and it is a forum focused more on investing whereas the focus of the Early Retirement Forum is arguably somewhat broader.
"You can never cross the ocean until you have the courage to lose sight of the shore." - - - C. Columbus
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Old 03-15-2010, 08:17 PM   #6
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I like your question, Bob. I've been struggling with this. I really want to keep my portfolio as simple as possible, but even then it will be more complex then what I want. Part of the complexity is the number and types of accounts.

My partner received an inheritance last Fall and I will be receiving one in the next month or so, so I am trying to figure out what to do with it. We are three years away from retirement.

My plan (as of this minute) is:

G fund in TSP
Total Stock Market Index fund
Total International Stock Market Index fund
Money Market fund
Wellesley (viewed as a bond fund)

It's too bad they lowered the limit on I-bonds. I'd skip CDs altogether and just go with them.
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Old 03-15-2010, 08:44 PM   #7
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Target Retirement 2015 + early SS + small non cola pension.

The rest is now play money. 16th year of ER (1993).

heh heh heh - the play money is mostly in Norwegian widow(aka dividend type ) stocks or DRIP plans. I've been all over the map since 1966 - now mostly a Boglehead with a few sinful individual stocks to keep the male hormones happy.
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Old 03-16-2010, 07:22 AM   #8
Dryer sheet wannabe
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Thanks for all the information. Based on W2R's suggestion, I am going to post this question on the Bogelhead's forum as well.


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