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Old 01-06-2016, 01:50 PM   #21
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Yes, and even if you didn't rebalance between the three, the two VG funds would continue to be balanced individually and limit how far out of whack your portfolio could get, even in the worst case situation.
And, the G Fund doesn't worry me either. It's guaranteed to never lose share price, and I have it set up on automatic monthly payments of an un-COLA'd amount that should last me until I'm around 95 or so. It is almost like a high interest cash account or even like an un-COLA'd pension. So, even though it is technically a bond fund, I'm not too worried about my bond allocation going down as I withdraw from it.
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Old 01-06-2016, 01:54 PM   #22
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I think by 70 my taxable accounts will be negligible after years of Roth conversions and the full living expenses load. That should help simplify things. I expect to close my mutual fund accounts held directly with fund companies as part of that process. That will probably consolidate everything into one brokerage.

Also about then I expect to transition into a simpler 4 fund or less portfolio. Maybe even one fund with some automated withdrawals. Suitable for DW to easily handle, though she's good with spreadsheets. Or maybe I'll just leave it as slice and dice but no longer worry about rebalancing targets. Not much complication if it's all tIRA or Roth accounts held in one place.
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Old 01-06-2016, 02:03 PM   #23
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Interesting discussion. I'm still very, very, very early in the accumulation stage. I won't be able to max out the 18K tax deferred until the next year or two so no taxable investment accounts yet and pretty much starting clean with no pesky tax consequences unlike the case for most here. I'm seeing quite a number of folks on Bogleheads who would like to simplify but can't because they'll be hit by large capital gains taxes. I'm hoping I could get it more or less "right" from the get-go.

Options I'm considering for taxable:
  1. 100% Total Stock Market VTSMX (just let it drift/grow, no rebalancing against tax-advantaged accounts)
  2. 100% Target Retirement 2040 VFORX 90/10 (same as 457 and Roth for simplicity)
  3. 100% LifeStrategy Aggressive Growth VASGX 80/20 (just let it drift/grow, no rebalancing against tax-advantaged accounts)
Leaning towards #1 for tax efficiency although the simplicity of having the same holding (VFORX) in all accounts is tempting.
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Old 01-06-2016, 02:05 PM   #24
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We are only about halfway to 80 years old, but I have transitioned to a simpler portfolio over the past year. I had fun managing my slice and dice portfolio for many years but I got bored with it. And as I was writing a document to help my wife understand the ins and outs of our portfolio in case of my early demise, I realized that it was way too complex for her to handle (not that she is stupid, but she has no interest in the minutia of such things). That complexity would probably drive her straight into the grip of a financial advisor.

So I reduced our holdings to only 4 broadly diversified Vanguard index funds, in addition to some CDs and i-bonds that are straight forward to understand. I did keep a very small portfolio of stocks for my own amusement - and to keep me from tinkering with the rest.

Once we move to a lower cost of living area next year, the plan is to live on the dividend and interest income generated by our portfolio (not much). All I have to teach her now is how to rebalance once a year.

Down the road, I could see going full auto with a blend fund.
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Old 01-06-2016, 03:47 PM   #25
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Originally Posted by hnzw_rui View Post
Interesting discussion. I'm still very, very, very early in the accumulation stage. I won't be able to max out the 18K tax deferred until the next year or two so no taxable investment accounts yet and pretty much starting clean with no pesky tax consequences unlike the case for most here. I'm seeing quite a number of folks on Bogleheads who would like to simplify but can't because they'll be hit by large capital gains taxes. I'm hoping I could get it more or less "right" from the get-go.


Options I'm considering for taxable:
  1. 100% Total Stock Market VTSMX (just let it drift/grow, no rebalancing against tax-advantaged accounts)
  2. 100% Target Retirement 2040 VFORX 90/10 (same as 457 and Roth for simplicity)
  3. 100% LifeStrategy Aggressive Growth VASGX 80/20 (just let it drift/grow, no rebalancing against tax-advantaged accounts)
Leaning towards #1 for tax efficiency although the simplicity of having the same holding (VFORX) in all accounts is tempting.
Hi, I post over at BH as well; I am 47 and one of those who has done quite a bit of simplifying over the years but still has a bunch of legacy funds. I am in the TSP, and I hold 5 funds there (because it is a large part of my portfolio, it helps with my AA), and about 8 funds outside of it. I also have about 10% of my portfolio in stocks, most of which I've owned since the 1990s/early 2000s.

#1 would be my pick for a taxable account; put the bonds in tax-deferred, and go from there. Best of luck!
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Old 01-06-2016, 04:38 PM   #26
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So I'm just thinking about what kinds of eventual transitions I might like to make and how to go about them. And when (at what age) to start the transition.

I figure people here will have lots of thoughts on this topic.
One word -- benchmarking.

I've started doing this more seriously. It helps to establish what one might want to transition to. I think it's important for me to have several portfolio possibilities and then see how my actual one performs against them. Also why one might have done better then others.

For instance, a Wellington/Wellesley based portfolio has very low international, US mid cap, and US small cap exposure. That might have helped over the last 5 years against a simple indexed portfolio.

Also I think it's important to add in any legacy investments into a benchmark. For instance, if one has old high yield Ibonds (they are not selling) then that should be a component of each benchmark portfolio. Same for cash or stocks that are not to be sold because of tax constraints. Helps to make the portfolio comparisons realistic.




I'm trying to step back from complexity but it's hard. Tend to be attracted to complexity like a moth to a flame. But yes, someday old age will get me.
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Old 01-06-2016, 04:59 PM   #27
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I actually have two benchmarks - both balanced funds. Some years they outperform my AA portfolio, other years my AA beats. It's been beating more often since 2008. I hold 10% of the portfolio in these, so I'm doing real comparisons.

What's obvious is that large cap performance is what drives the balanced funds. So years when large cap are in favor, the benchmarks beat.
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Old 01-06-2016, 05:40 PM   #28
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#1 would be my pick for a taxable account; put the bonds in tax-deferred, and go from there. Best of luck!
Lol, that's the thing. Both tax-deferred and Roth are 100% VFORX because I don't want to have to deal with rebalancing (I tinker with slice and dice if given the chance). The only bonds I'll have will be the ones in VFORX. If I go with #1, I'm pretty much just going to allow VTSMX to become overweight.
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Old 01-07-2016, 10:00 AM   #29
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Two comments.

I still sometimes wistfully look at the wellsley/wellington type portfolio because of my fondness for divy's and the 'value premium.

And there was never a year (1966 - 2006) when I couldn't look back and find a portfolio that did better than the one I held.

heh heh heh - I also was a Saint's fan for 30 years.
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Old 01-07-2016, 10:20 AM   #30
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Two comments.

I still sometimes wistfully look at the wellsley/wellington type portfolio because of my fondness for divy's and the 'value premium.

And there was never a year (1966 - 2006) when I couldn't look back and find a portfolio that did better than the one I held.

heh heh heh - I also was a Saint's fan for 30 years.
They're back to their old ways.



Sean Payton announced yesterday that he will stay with the Saints as long as they want him, and will never coach another team.

As for comparing portfolios, someone on another forum quoted Roosevelt as saying, "Comparison is the thief of joy".
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