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New at this
Old 09-27-2005, 09:36 AM   #1
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New at this

Newly retired (57 yr old, wife 55, mortgage free, no outstanding credit) with 200k cash hoping to stretch to mid 2008 and then begin dividend withdrawals on 700k from 401k and pension plan (will be rolling these amts to Vanguard Target 2005)* Our intent is to place 100k into CD ladders to cover living expenses for the 2.5 yrs and invest the other 100k.* Is CD laddering the right approach for us and any suggestions on how to invest the other $100k?* Thx for any advice.
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Re: New at this
Old 09-27-2005, 10:24 AM   #2
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Re: New at this

Brewer is the expert in this area so if he comments give it special weight.

The savings I-bonds in modest denominations are worthy of consideration. You can't cash them for a year, if you cash them within 5 you do take a small hit, but it is less than selling a corporate or muni bond prematurely.

Go to the Treasury Direct website. You may want to wait until October as they will be adjusting interest rates then.
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Re: New at this
Old 09-27-2005, 10:46 AM   #3
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Re: New at this

You could do a CD ladder, but it is hardly worth it considering how flat the yield curve is. I would just toss the $100k you plan on living on into an Emigrant Direct or other high yielding savings account. Its liquid, safe, low hassle, and you take zero interest rate risk. If the yield curve steepens later on, you might make a different choice, but we are talking about a relatively short time period here.

As to the other 100k, it really depends on a lot of things you haven't told us:

- what's in the other accounts?
- what is your risk tolerance?
- how much income do you expect to need from your portfolio?
- what is your probably life expectancy?
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Re: New at this
Old 09-27-2005, 01:26 PM   #4
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Re: New at this

I have a CD/bond ladder, but it was started years ago when yields were higher.* *I haven't bought anything on the longer-end of the ladder for a couple years now.* *As brewer says, new ladders make zero sense when the yield curve is flat.* * Stick with a money market right now.* *Even short-term corporates aren't worth the tiny risk premium today.
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Re: New at this
Old 09-28-2005, 11:45 AM   #5
Confused about dryer sheets
 
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Re: New at this

Thanks so much for all of the quick replies and advice. We have since researched Emigrant-Direct and feel this is a smart move to make right now. Our intentions are to put all 200k into Emigrant temporarily until we decide on our next move. Brewer to answer your questions: we lean toward a more conservative approach due to our ages; hoping our life expectancy will be somewhere in our 80's; preliminary estimates show that we are looking for 30k to 35k a year to maintain current life-style; pension and 401k's will be turned over to Vanguard in a few months and they have recommended VTSAX, VGTSX, VMLTX, VWNFX, VEXPX, VSEQX, VBILX, however, after some research we are thinking on the Vanguard Target 2005 and possibly a mixture of Wellesley, Wellington, Vanguard Mining/Metals and Vanguard Total Int'l Stock Index Fund. Does anyone have any positive/negative comments on our choices? As we continue our research we are most appreciative of your suggestion re Emigrant-Direct - thank you.
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Re: New at this
Old 09-28-2005, 11:50 AM   #6
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Re: New at this

If it were me, I would probably go for 70% Wellington, 10% Total International Stock, 10% PCRIX and 10% GIM (in addition to the $100k in a savings account at Emigrant). I would also endeavor to live off the coupons/dividends. You'd be real close to being able to completely doing so, including the whole $900k.
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Re: New at this
Old 09-28-2005, 12:03 PM   #7
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Re: New at this

Recognized Pimco from several past postings as doing very well. Not familiar with GIM but have now added it to our research list. Enjoy reviewing the postings on this board and seem to learn something new each day.

Thanks!
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