I must be financially thick

[F4mandolin]

Making yet another effort to become self-sufficient with the whole financial deal. Almost 2 years now in retirement (56 this summer, wife soon to be 53). Just getting tired of paying the Edward Jones fees...yet I like the hand holding. I have several of the recommended books (4 pillars, couple of Bogle books etc), but when all is said and done....just don't know enough to do it on my own. At this moment if I had to move the $365K out of EJones (and possibly the $420K in TSP) and into Vanguard, I would likely just stick it in either the Total Stock/Total Bond +/or Total International........or a Wellington/Wellesley combo....simple. But the steps on taking money out, taking money out to CD ladder, where to take the money from to ladder those few years of easy/cash money..... If nothing else, I understand the diversification theories well enough....and the concepts of rebalancing....but the other bits kill me. Just started reading the old FAQ section to pick up some more....but if someone could point me to a really really really simple....way way less than 150 pages book/articles....would be much appreciated. I can show you how to play Bach on mandolin.....at times I play close to scratch golf.... just plain thick with the investment world.

[Animorph]

Once you get to the cash part, the decisions you make aren't as critical, especially these days. Hopefully it's a small part of your portfolio, and you're just trying for an extra 1% or so on it.

I just keep my cash in my brokerage account. If there's a lot, I might try a conservative slow moving bond fund or whatever pays a decent interest rate. If you want CD's, you can time the cash to be available when needed by controlling your duration, which is a start at laddering.

[Bestwifeever]

Quote:

Originally Posted by F4mandolin .... getting tired of paying the Edward Jones fees...yet I like the hand holding.... At this moment if I had to move the $365K out of EJones (and possibly the $420K in TSP) and into Vanguard, I would likely just stick it in either the Total Stock/Total Bond +/or Total International........or a Wellington/Wellesley combo....simple.

What do you have the Edward Jones money invested in right now? There may be some Vanguard funds that would substitute more or less for those.

[Greg V]

You might take your time before deciding about a TSP rollover. While the choices and withdrawal options are more limited than an IRA, you can cover the total stock and bond markets in a reasonable fashion with the appropriate combination of C, F, G, I and S Funds...and the expense ratio can't be beat at .025%. I've found the combination of TSP and IRAs works fine in building and conducting an investment and planned withdrawal plan. Just a thought...

[Midpack]

Quote:

Originally Posted by F4mandolin But the steps on taking money out, taking money out to CD ladder, where to take the money from to ladder those few years of easy/cash money...if someone could point me to a really really really simple....way way less than 150 pages book/articles....would be much appreciated.

I'd like to take a crack at helping, first, is this your central question?

[F4mandolin]

Right now I have this set up for the next 3+ years through EJones. I have my pension coming in $962 month (after health, spousal coverage taken out), plus what should be $700+ in August from Social Security Supplement from 56 to 62. House is ours (approx $230K) and will downsize to a cheaper one within 5-10 yrs if we stay in this area. Budget right now is to stay at $4k a month or less....which is easy if we aren't fixing something on the house (or paying property taxes $2500, and wife's flight back to the UK)....about $1800 for march.
1. Investco Investment Grade Income 7+yr mthly cash-$17,293
This I can take out anytime once my checking account ($17k) gets lower, likely not for another 6 months or so.
2. Wachovia Mortgage Due 08/15/2013, CD, 5.050%= $18,233
3. Hewlett Packard Global Note, corporate, 03/01/2014, 6.125%= $18,824
4. Citigroup Inc Senior Note Unsecured, corporate, 03/02/2015, 2.650%, =$18,542

The regular funds in the joint account....approx $238K
AMCAP- $48K
American High Income- $21K
Capital World Bond- $12K
Capital World Growth+Income- $18K
Europacific Growth- $16K
Fundamental Investors- $33K
Intermediate Bond- $38K
Smallcap World- $17K
Washington Mutual Investors fund- $33K

ROTH....approx $53K
AMCAP- $9K
Bond Fund America- $10K
Capital World Growth+Income- $6K
Europacific Growth- $3K
Fundamental Investors- $5K
Investment Company of America, $3K
New Economy- $5K
Smallcap World- $5K
Washington Mutual Investors- $6K

TSP is around $420K in 55%C fund, 15% S fund, 30% F fund
Not planning on touching this for a good long while unless I moved it to Vanguard. Might change the % though....moved it to a bit riskier 70/30 type split a while back. Although.....EJones guy is desperate to get hold of this as well....as well as the variable annuity that he has pushed hard on a couple of times.

After going through the Bogle type books a couple years ago, I tried to get my wife (UK citizen) to sit down with me....hell, she might pick it up better than me anyway.....and after that thread back about a week with the lady having her husband mismanage $600K of their money...might try to force her to get involved again. If I were to get run over out on my bike someday....she would really be in trouble even though I have tried to get her to sit down with me and go over where all the money is and how to get to it. Still a chance in the future of heading back to the UK anyway....

[F4mandolin]

Oops, sorry Midpack....was typing all that stuff while a couple more messages came in. Any help would be appreciated. No way EJ is getting my TSP though and have been careful not to let them talk me into anything else without going home to check (as with the variable annuities)....he wasn't happy at all when I wouldn't go for that one.

[pb4uski]

I suggest that you start with the end in mind. What is your desired liquidity in years of living expenses in cash? What is your target AA?

One can easily construct a diversified portfolio with a handful of Vanguard no-load, low-cost index funds. And get fancier from there if you care to and are comfortable doing so.

If you move to Vanguard, it may be worthwhile for you to go through their financial planning process as they can help you think through what you want where and making your portfolios tax efficient.

[heeyy_joe]

"just don't know enough to do it on my own."

More important, IMO, to get the wife onboard to know what's what.

[RunningBum]

Quote:

Originally Posted by F4mandolin I would likely just stick it in either the Total Stock/Total Bond +/or Total International........or a Wellington/Wellesley combo....simple. But the steps on taking money out, taking money out to CD ladder, where to take the money from to ladder those few years of easy/cash money..... If nothing else, I understand the diversification theories well enough....and the concepts of rebalancing....but the other bits kill me.

Not everyone does CD ladders, if that's what's holding you back. You've already got some cash flow coming in with your pension and other sources. You can also just take dividends rather than reinvest to provide more cash flow. If you need more, sell as needed from whichever fund is heaviest in your asset allocation. Some day I may set up a CD ladder, but so far I just haven't bothered. Short term CD rates are so low, and I'm not sure I want to tie up much money in slightly higher longer term CDs.

[seraphim]

My first question is, "what are your annual costs?"

A set of 3 or 5 Vanguard funds could cost you an ER of about .10% or less. I'm estimating from a quick look at your figures that would be about $750 a year. VTSAX, VTIAX and their total bond (VBTLX) or intermediate band fund would pretty cover things. Keep 3 years of WD in liquid account. Each year, draw from what's doing well or from liquid account if markets overall look poor. We are still getting ready to set up our final retirement accounts, but have 60s/34b/6cash allocation. About 10% International. Considering putting a bit into mid and small cap funds, as well (10% total). Only plan on a 2% draw because of pensions. Can't get much easier...

Could also go with a Wellington combined fund. (65s/35b) Easier still.

[F4mandolin]

One of the things I do like with what the EJones guy has done is to set up a few years of easy access money while the market had a nice run-up, I guess that is what I would have done recently as well. Makes sure that the money is fairly available and took it out while things were up. That is what I would have in mind for the future as well. We should have enough over the next 3+ years without having to touch anything else. Now....in 2 years....if the market took another nice jump, that might be when I would want to get another 2 years or so of semi-cash out and ready to go to avoid any downturns (in theory). Basically if there was a fund in Vanguard that guaranteed 7% every single year....that's where I would dump pretty well every cent. That would give us MORE than enough to live on and still have at least $10K a year left over. Things like Wellesley have averaged better than that lately. Thinking somewhat of my wife here as well......did NOT have any money growing up in the UK (as in toothpaste freezing in tube because of no heat)....then married a plunker/prat of a husband (and still didn't have any money)....for her benefit I try to keep things as risk free as "possible"...and still risk enough to keep moving forward.

pb4uski- Our retirement goal was to have enough to spend at least $4000 a month (average) if we needed to. Now that the house has pretty well all the repairs done to it....we sit around $2-3,000 unless there is something like property taxes....$1800 for March....about $5200 in Feb with property taxes and UK flight home for the wife.....more than covers my golfing habit.

[travelover]

Quote:

Originally Posted by F4mandolin ......... Basically if there was a fund in Vanguard that guaranteed 7% every single year....that's where I would dump pretty well every cent. ........

Yea, me too.

[brewer12345]

Quote:

Originally Posted by F4mandolin One of the things I do like with what the EJones guy has done is to set up a few years of easy access money while the market had a nice run-up, I guess that is what I would have done recently as well. Makes sure that the money is fairly available and took it out while things were up. That is what I would have in mind for the future as well. We should have enough over the next 3+ years without having to touch anything else. Now....in 2 years....if the market took another nice jump, that might be when I would want to get another 2 years or so of semi-cash out and ready to go to avoid any downturns (in theory). Basically if there was a fund in Vanguard that guaranteed 7% every single year....that's where I would dump pretty well every cent. That would give us MORE than enough to live on and still have at least $10K a year left over. Things like Wellesley have averaged better than that lately. Thinking somewhat of my wife here as well......did NOT have any money growing up in the UK (as in toothpaste freezing in tube because of no heat)....then married a plunker/prat of a husband (and still didn't have any money)....for her benefit I try to keep things as risk free as "possible"...and still risk enough to keep moving forward. pb4uski- Our retirement goal was to have enough to spend at least $4000 a month (average) if we needed to. Now that the house has pretty well all the repairs done to it....we sit around $2-3,000 unless there is something like property taxes....$1800 for March....about $5200 in Feb with property taxes and UK flight home for the wife.....more than covers my golfing habit.

Guaranteed 7% per year does not exist. Don't bother hunting the purple unicorn.

The nice thing about balanced/allocation funds like Wellington, Wellesley, etc. is that they pretty much automatically take gains from equities when they have run, deploying the proceeds into bonds. For long term money, you could do a lot worse than these types of funds. I have my 401k at my current employer (~10% of net worth) in such a fund and I plan to leave the money there for the next couple of decades. I won't even bother looking at it once I split except to update my portfolio tracking spreadsheet a couple times a year.

You EJ relationship should be on the chopping block immediately. You are likely paying 10 to 15X (or more) what Vanguard would charge you. If you could switch electricity prioviders and pay 1/10th of your current rate, wouldn't you be all over that?

[F4mandolin]

Oh...I know what I should do.....just trying to find the b**** to do it. I should also give up the beer and junk food. Guess it's kind of like the kidnapped victim sympathizing (Stockholm syndrome) with the kidnapper. Hate to upset them......they are such a nice person......yeah yeah...I know... it's MY money, not his. B****.....now where did I put them?

[pb4uski]

What I would do is start with your current cash balance and reduce it for your expected expenses and addd in your pensions for the rest of 2013, 2014 and 2015 month by month. Also, add in the maturity value of your bonds as they mature. I suspect that you'll find that you'll have enough to carry you through to the end of 2015.

Then put the rest in Vanguard funds so that in aggregate they are consistent with your overall target AA.

[Chuckanut]

Quote:

Originally Posted by F4mandolin I should also give up the beer and junk food.

Junk food, yes! Beer? Quite a bit above junk food. Just watch the video "How Beer saved the world."

[travelover]

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Originally Posted by F4mandolin .......... Hate to upset them......they are such a nice person...............

For just 0.25% of your assets, I'll send you a birthday card yearly and ask about your family.

[F4mandolin]

Quote:

Originally Posted by pb4uski What I would do is start with your current cash balance and reduce it for your expected expenses and addd in your pensions for the rest of 2013, 2014 and 2015 month by month. Also, add in the maturity value of your bonds as they mature. I suspect that you'll find that you'll have enough to carry you through to the end of 2015. Then put the rest in Vanguard funds so that in aggregate they are consistent with your overall target AA.

Guess you lost me a bit. Current cash I consider the $17k in checking....do you consider the $17k in Invesco as cash? With Invesco added to the checking it is way more cash than we will need before the August 2013 money is available. Could probably take some of the Invesco money and contribute that to the Vanguard pot.

If I went with a Vanguard mix of Total Stock/Total Bond/Total Int (40-40-20)...or even Stock/Bond 50-50.......or........is the downside compared to Wellington/Wellesley the slightly higher %ratio?

[F4mandolin]

Quote:

Originally Posted by travelover For just 0.25% of your assets, I'll send you a birthday card yearly and ask about your family.

Ahhhh......comes from the confidence of knowing what you are talking about.

I can play Preludium and Allegro by Pugnani on the mandolin...but that doesn't exactly help me in this case.