I'll Show You Mine If You Show Me Yours

[Skylark]

Accumulation phase, target retirement date about 15 years out. Sooner if I can FIRE early.

457 Plan:
Intl Index 20%
Small Cap Index 20%
Mid Cap Index 20%
S&P500 Index 40%

Roth
Target Retirement 2025 100%

I also have a defined benefit pension which from a financial planning point of view, I look at as if it were a bond. I will not be eligible to receive it until age 60, 17 years from now. It is currently worth 18% of my final salary and will be worth 2.25% x Years of Service, or 56% if I hang on till age 60. I'm hoping the funds perform well enough to bridge me over a few years so I can retire earlier than age 60.

[unclemick]

Distribution phase. Age 61 - 12 yrs in ER.

Income:
Fixed defined pension 60%
15% of portfolio - DRIP stocks. 40% of income.

Reserve:traditional IRA
75% Vanguard Lifestrategy moderate (quasi 60/40)
10% Vanguard REIT Index.

I've done this before, but for the newbies:


Note For simplicity I combine personal stuff with
my tiny holding company.

Survival mode..............Age 60 , semiretired 12 years, fully retired 6 years

50% real estate
20% high rated corp. bonds
15% Federally backed long term bonds
15% Hi Yield bond fund

Plus a working wife............priceless

John Galt

[Bob_Smith]

I've noticed that many here appear to view their allocations per type of account. In other words, there are separate allocations for IRAs, taxable accounts, etc, even though it is implied that all accounts will be used for the same goal - retirement. I use a "top-down" approach. First I determine my overall allocation (stocks, bonds, & cash). Then I sub-divide asset classes (ie: my stock allocation will consist of 80% US and 20% International, and so on). Last I distribute specific securities/funds among our various accounts, and consider tax issues, etc. when doing so.

When I see that someone has one allocation in a 401(k), and a different allocation in their IRA, I have no idea what the overall allocation really is. It depends upon whether the 401(k) is 99% of the total, or 1% of the total, or something in between. My question is this: do those who don't use the top-down approach keep tabs on the overall asset allocation?

[unclemick]

Yes and no - when I use FIREcalc - I enter pension, SS, AND my 15% DRIP stocks as income streams. But I also since they are stocks - swag an overall stocks/bonds/cash periodically to assess asset allocation.

I remember lots of old/new discussion about: SS, house/real estate, pension as effecting asset allocation decisions.

For a thread like this - keep it simple. I got's a step daughter in spare room, widowed mom, and SO - all with portfolio's/income streams. The Godfather was one of my favorite movies - heh, heh, heh.

Yes - top down, and no - income streams. Try to do both ways as a cross check.

[Bob_Smith]

Unclemick, I'm not talking about separate income streams like pensions and SS - that's another issue - and I don't include them in my overall allocation decisions. I'm talking about financial assets. I frequently see people here who have one allocation for their 401(k), another for their IRA, and yet another for their taxable account, even though each account is earmarked for retirement. I'm just wondering if they track their overall allocation, and if they don't, why they don't.

[unclemick]

Wellllll - heh, heh - since we both 'know' that's what they are supposed to do - let's tell them *to do it!

Perhaps someone can post a counter arguement.

[brewer12345]

I view my assets across account types. They are all one, so chopping the totality into artifical boxes is giving in to the worst tendencies we all have WRT money (been reading behavioral finance stuff lately).

[unclemick]

Behavioral Finance -eh

Well - dial back the time machine thirty years.

I over DCA'd into my hotest performing mutual funds. Reinvested - dead money, took some off money off the table, chased the next hot sector/industry, diversification will damp performance - you need to to stick with the hot hands, put your eggs in one basket and watch the basket, yadda, yadda, yadda.

An oversize portion of my early education came from the 'school of hard knocks' - not just books. I even had a stock broker or two - once upon a time.

Behavioral finance - eh!

For Bob_Smith mostly. I lump everything together
and then look at my allocation, I guess because
every penny has to pull its weight in retirement.
In other words, I pay no attention to what type of account has the money. In my case, it might be
taxable (money market) non-taxable (IRA) or even
corporate. I lump it for me and I lump it for you.

BTW and off topic................I know I repeat, but even
now I have trouble with backsliding on my spending.
I think I may be getting worse because as someone pointed out, dying broke is an example of perfect
financial planning and I want to enjoy the money I have
now. So, for me, "locking" my money into long term and
illiquid investments protects me from myself to some extent. I can still borrow of course, but I can resist
that urge. If the cash is just sitting there earning
2%, those new toys start to look awfully appealing.
Anyone else struggling with this? I suspect it is worse
for me as I was never a saver in my former life.

John Galt

[Jarhead*]

Quote:

Unclemick, I'm not talking about separate income streams like pensions and SS - that's another issue - and I don't include them in my overall allocation decisions. I'm talking about financial assets. I frequently see people here who have one allocation for their 401(k), another for their IRA, and yet another for their taxable account, even though each account is earmarked for retirement. I'm just wondering if they track their overall allocation, and if they don't, why they don't.

Hey Bob:

Was wondering where you've been. You went a while without posting. The quality of posts seems to improve when you are back in the mix.
I personally went through a total re-vamp of my investments about 8 mos. ago. (Unlike UncleMick, and a few others on the board, passive investing in the stock and bond market are not among my favorite things to do.
After much soul searching, and contemplation, about what is important to us, and what is not so important, I chose to do the following:
What is not for sale right now, is my house, and common stocks. I revamped my investments so that I can count on, using conservative (laddered CD's, hedge fund, Tips, I bonds, to be able to carry us for the next 13 years. By doing that, we are able to count on more income, (Inflation protected), and in 13 years, if the creek don't rise, etc., house and commen stocks should be able to carry us to the twilight zone.
The main thing that does for me personally, I feel more comfortable, and able to concentrate on the things that are truly important to us. (Golf, fly-fishing, and spending time with my kids).
Regards, Jarhead

[Berkshire_Bull]

Ameritrade: 83%
Holding: HGRD, ASFI, FCFS, AMPH, EGAM, BXL, AEDU in that order

Ameritrade IRA: 8%
Holding: JCOM, APES, TLF, 40% is cash

401K: 4% 50% S&P 20% Large Cap Value 10% Cash 10% Mid Cap Value 10% Mid Term Bonds

DRIPS: 4% WMT, PFE, HRB, NDE, JNJ

Other Cash: 1%

[Nords]

.

[Bob_Smith]

Quote:

Hey Bob: Was wondering where you've been. *You went a while without posting.

Hi Jarhead,

The weather has been so incredible here that I've been outdoors much of the past 2 or 3 months. We made a few trips to South Dakota too. My youngest daughter started college in August, so between delivering her to campus, visiting her, and spending time with my parents and siblings, we've been on the road a lot. It has been a great fall.

[GDH]

Age: 25

Canadian Large Cap: 24%
Candaian Small Cap: 16%
MCSI UK: 10%
MCSI Japan: 10%
MCSI Australia: 10%
REITS: 20%
Bonds: 10%

All in low-cost ETFs. Canadian RSP rules limit foreign content to 30% and since the S&P 500 and the S&P TSX move in lock-step I've decided to go with markets that aren't quite as correlated.

I've also got a small Drip portfolio that I put about a hundred bucks into a month-- but that's just because I have the need to fiddle with things and it keeps me from trying to active-manage my core portfolio. Once I get over the urge to meddle I'll fold it back into the plan above.

[ESRBob]

Quote:

Hi Jarhead, The weather has been so incredible here that I've been outdoors much of the past 2 or 3 months. We made a few trips to South Dakota too. My youngest daughter started college in August, so between delivering her to campus, visiting her, and spending time with my parents and siblings, we've been on the road a lot. It has been a great fall.

Bob,
great to have you back on the Board, though it should come as no surprise, I guess, that in a group of ER'd people, some of us will go 'walkabout' for long periods of time, enjoying the fruits of our freedom, right? (Do we need to pitch in and buy Bob a blackberry?)

On your point, I lump everything together and do one asset allocation, then just try to be smart about what assets I buy in the Roth and what I buy in the taxable funds. (Although the conventional wisdom on what is smart seems to shift from time to time) Can't imagine it makes sense to have searate allocations in different buckets.

ESRBob

[Bob_Smith]

Hi ESRBob,

Yep, I'm afraid you're right - I don't have a blackberry, and to be completely honest, I had to do a Google search, because I didn't even know what a blackberry was! But now I do, and I want one!

[charlie]

I originally posted on this thread in mid July. Since
then I have made a few changes ......

My wife's IRA is now in Wellington and our after tax
money is in Wellesley with approximately the same
in each. These two funds compose about 1/3 of our
total portfolio.

My IRA containing the other 2/3 follows a modified
"coffeehouse" approach. The equity portion is 60%
split equally among Large Cap Index, Windsor II,
Small Cap Index, Small Cap Value, REIT, Total
International and International Explorer. The 40%
FI allocation is 10% Inflation Protection, 10% Intermediate Term Bond Index and 20% Short Term
Investment Grade.

My YTD total return is 5.62%, which is better than any
of Vanguard's balanced funds. This is mostly due to
buying the REIT and TIPS funds at the right time. Pure
luck. I have since rebalanced and taken the profit from these 2 funds.

Cheers,

Charlie

[WilliamG]

I have made some relatively small changes also. I surely hope that I can leave this alone! I know constant re-thinking and fiddling with a portfolio can be a killer! All funds are Vanguard...

20% Total Stock Market
15% Value Index
5% Small Cap Value Index
5% REIT
10% International, equally split in EM, Europe, Pacific

16% Intermediate Investment Grade
8% I Bonds
16% Short Term Investment Grade

5% Cash

Quote:

I have *made some relatively small changes also. *I surely hope that I can leave this alone! *I know constant re-thinking and fiddling with a portfolio can be a killer! *All funds are Vanguard... * *

Yup, Berstein says the the selection of specific asset classes is not as important as staying with the ones you selected.