Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
VWIAX for a beneficiary IRA
Old 04-08-2012, 07:59 AM   #1
Thinks s/he gets paid by the post
seraphim's Avatar
 
Join Date: Mar 2012
Posts: 1,492
VWIAX for a beneficiary IRA

DW has two non spousal IRAs: 50k and 150k. RMDs required starting now lol.

We are considering putting the largest I to VWIAX (70/30 high dividends) and balancing to a 50/50 by putting the small IRA into a total stock fund.

I thought the more stable bond heavy fund would be a better choice since we have to withdraw each year, and the dividends would be a plus in the factor.

Trying to get as much out of the IRAS as they will completely disbursed in 27 years. Each year I can reinvest the RMDs into something to balance the allocation, if necessary. (We can live off our pensions alone if necessary).

Thoughts or problems with the idea?
__________________

__________________
"Growing old is no excuse for growing up."
seraphim is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-08-2012, 08:16 AM   #2
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,465
seraphim, you have asked a number of questions about investments in your different retirement and taxable accounts. Do you have an overall asset allocation plan along with specific funds for the different asset classes? It might be easier for you to first do that, and then determine how to use the different accounts to implement the plan.
__________________

__________________
MichaelB is offline   Reply With Quote
Old 04-08-2012, 09:57 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
I agree with Michael that what you do needs to be consistent with an overall plan and there isn't sufficient insight on the overall plan to give you good advice.

For example, if you have pension/SS income that significantly provides for your living expenses AND you want to leave as much as possible to heirs, then you might be very aggressive in the investments in those IRA accounts. OTOH, if you rely on those RMDs for your for living expenses and don't have any taxable investments, what you propose may make sense.
__________________
pb4uski is offline   Reply With Quote
Old 04-08-2012, 10:27 AM   #4
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by MichaelB View Post
It might be easier for you to first do that, and then determine how to use the different accounts to implement the plan.
+1
__________________
rescueme is offline   Reply With Quote
Old 04-08-2012, 10:34 AM   #5
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,116
Seraphim, you mention balancing to 50/50 for your DW's IRA, what does that do to your combined AA? I'm a fan of VWIAX but as the others have said, answering your question in isolation of an overall AA strategy may not result in you ending up with where you want to be from a big picture standpoint.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-08-2012, 10:56 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,620
Money is money. It does not matter whether you take it out of your right pocket and spend it or if you take it out of your left pocket and spend it.

It also doesn't matter if it is in an inherited IRA or your own IRA or your retirement account. After all, money is money.

My spouse has a small inherited IRA. It is invested exclusively in a short-term bond fund. The reason for that is that our overall portfolio asset allocation calls for us to have some short-term bonds. By putting some of them in that inherited IRA, we help fulfill our desired asset allocation. We also will minimize the size of the annual RMD that must come from that account and thus will minimize our taxes. The size of the annual RMD is small because (a) the account is small in value and (b) short-term bond funds do not increase quickly in value. We would rather have our other accounts increase more quickly in value because they get a better tax break than that inherited IRA.

I hope this is helpful.
__________________
LOL! is offline   Reply With Quote
Old 04-08-2012, 01:12 PM   #7
Thinks s/he gets paid by the post
seraphim's Avatar
 
Join Date: Mar 2012
Posts: 1,492
Lol

Yes, that does help? I'm trying to maximize the RMDs, though, so I don't have to draw from the rest of the portfolio if I don't have to. I can alleviate taxes by putting the MDS elsewhere, such as an HSA or other account


I haven't figured a total asset allotment yet - still learning and working on it. I just have some funds I have to do something with right now, as they're losing money at about 1.25%. I'm looking at a 50/50 to 70/30 overall allocation eventually, but when my other assets are available in January, I can configure them for whichever AA I end up choosing.

I got tossed into the deep end without warning.

It appears I have less options with the non spousal IRA account, so I figured if I set it up most efficiently, the rest would drop into place come January

I also have new investor jitters lol. Part of me wants to just give it to the financial planner to worry about, and pay the high fees involved.

And I do appreciate eveyonr's time. You've been extremely helpful.
__________________
"Growing old is no excuse for growing up."
seraphim is offline   Reply With Quote
Old 04-08-2012, 01:15 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,620
What do you mean "losing money at about 1.25%"? Are you saying they are stuck in an actively-managed fund with an expense ratio of 1.25%?
__________________
LOL! is offline   Reply With Quote
Old 04-08-2012, 01:46 PM   #9
Thinks s/he gets paid by the post
seraphim's Avatar
 
Join Date: Mar 2012
Posts: 1,492
In a MM at .25 and the FP gets a 1% on the total assets. It's a beneficiary IRA account. Rather than set up something in that account and continue paying the FP, I'd rather put into an account with an index fund. And no FP
__________________

__________________
"Growing old is no excuse for growing up."
seraphim is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
IRA to ROTH IRA Conversion? rsingh6675 FIRE and Money 28 04-09-2012 08:21 PM
Universal Health Care - what are we waiting for? Midpack Health and Early Retirement 132 04-08-2012 11:18 PM
Have enough for 4% SWR Retire2013 Other topics 37 04-08-2012 10:11 PM
Please help with portfolio advice for my partner Bluemoon FIRE and Money 11 04-07-2012 01:30 PM

 

 
All times are GMT -6. The time now is 05:59 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.