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Originally Posted by Achiever51
Thanks! Great suggestions -- I was wondering how the "mechanics" of this would work. The money market idea makes a lot of sense.
Another question: are you familiar with any of the LifeStrategy Funds? They seem to mimic the allocation I'm seeking, with a lower fee. Why not go that route?
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You can certainly initially put the money in a MM and then distribute it, however you might get caught in the "is now a good time to invest in XYZ fund" syndrome. When I rolled over my old 401(k), I just rolled the money into the fund(s) I wanted. But more of a personal choice.
The life strategy funds [which include Total stock Market fund, Total Bond Market fund, and Total Int'l] cost roughly 0.26%. If you were to use the Admiral shares of TSM, TBM, and combine those w/ Total Int'l, your expense ratio would be around 0.14%, or half of the life strategy funds. On $500K, that's giving up around $600/year in free money.
If your pension is fixed, and doesn't received a cost of living adjustment, you may want to consider adding inflation protected bonds [for example, Vanguar'd admiral TIPS fund VAIPX ] in addition to the nominal bonds in the TBM fund. Though, you may not want to get all that complicated.
- Alec
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