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Reflection and my buckets with %ages
Old 01-04-2012, 04:46 AM   #1
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Reflection and my buckets with %ages

At the end of each year, I try to reflect on things. 2011 was a bit more challenging than previous years with unscheduled job change, passing of 3 close elderly family members, and first full year of having 2 young kids in the household. Some of this is just normal with aging and adds to some frequent comments in the forum about "can't buy time" or "value of your time". Also, Dec 2011 marked my first year reading this forum. Thanks for all the valuable and entertaining knowledge that each of you present here.

So I started updating my financial numbers/buckets....

30.3% Taxed
26.1% Traditional IRA
7.3% Roth IRA (started late, currently in a high tax rate)
25.1% Real Estate Investments (fully paid off)
11.2% Personal Real Estate (mortgaged but have funds in Taxed that can pay off but enjoying very low interest rate)

I feel I'm pretty diversified between buckets, wish I had more in Roth but don't feel a conversion at this time is worth it, but will consider if ER or semi-ER when my tax rate goes down.

For my invested funds (Taxed, TIRA, Roth), my current AA is about 80% equities (index funds/target funds), 15% bonds, 5% cash. Previously targeting ER of 12 - 13 years, but now reconsidering options. I'm thinking 5 6 years now, so looking to adjust AA over the year, maybe from 80% down to 60 65% moving to bonds or another rental property if a deal presents itself.

Current net rental income covers 100% barebone daily budget, but only 65% of budget with the extras (vacations, extra college funds, gifts, etc.). College funds are not part of the assets above, but fairly funded on the side already with personal 100% target within 4 years.

Questions

1. Looking at my bucket %ages, should I diversify more? I feel I might be heavy on real estate but that might be my part time j*b in semi-retirement.

2. Ive seen guidance on changing AA for a normal retirement, but with possible ER by age 47 - 48 (now 42), Im thinking I want to reduce my exposure (but fear bond markets/inflation now too).

3. What else should I be considering as I change my timeline to ER or semi-ER?

Thanks for your feedback.
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Old 01-04-2012, 07:13 AM   #2
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Tough question. If your real estate appears to offer stable income covering bare bones (difficult to be sure it will hold up I assume) then it could give you a nice safety net like a pension. That would allow you to stay a bit more aggressive on equities in hopes of assuring that 40+ year retirement.
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Old 01-04-2012, 06:40 PM   #3
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Quote:
Originally Posted by donheff View Post
Tough question. If your real estate appears to offer stable income covering bare bones (difficult to be sure it will hold up I assume) then it could give you a nice safety net like a pension. That would allow you to stay a bit more aggressive on equities in hopes of assuring that 40+ year retirement.

Hi donheff - just like anything, ups and downs with rental and various expenses, but my numbers are conservative factoring in most planned and some unplanned reserves. Thanks for the reply.
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