Possible Forced Retirement. Step 1, Need Assistance in 401k Rollover

[youbet]

when I consider our portfolio allocation, I consider everything together.

+1


Fully agree. Overall AA followed by tax deferred vs non-tax deferred positioning are what's important to me.

 

[JustKickItForward]

Maybe I read things too fast... but I don't see enough taxable accounts (231K) to live on (51K burn rate - 22.7K spouse income for 5 years) for the 9.5 years until you can hit the tax deferred accounts without paying 10% penalties at 59.5. That assumes not using the 100K emergency fund or the 200K college fund as living expense sources.

I know I posted a lot of details and I could have missed something but I eyeballed a few things when thinking about ER, but from an income flow perspective, key points are:


1) I start collecting $24k/yr pensions 2024
2) spouse quits work in 2025, and starts collecting her pension ($1,200/yr)

3) By 2024/2025 timeframe, I would have burned through the $100k emergency/expense fund and replenished another $25kx4 from the taxable acct (most or all will be @ ZERO cap gains due to being in 12% fed tax bracket) to last another four years

4) Spouse's own SS starts in 2032, $9,000/yr
5) My FRA SS starts in 2036, $30,800/yr + spouse will drop her own SS and take spousal at that pt, $15,400/yr.


Btwn now (2019) and item 1) yr 2024, I will aim on doing something part time, $8,500/yr (take home), to help reduce digging into our portfolio. Now, once item 2) yr 2025 hits, one or both of us can have very very low stress PT work, if desired.


If we are ever short of $$$ at anytime, like at the 'fringes' (times between items 3) and 4)), we can easily mitigate. For an example, we can take some contributions from our Roth IRAs (currently, acct values are >$400k), one (or both) can take an easy part time job, reduce expenditure (kids will be OUT OF THE NEST by then), etc.


NOTE - during the next few yrs, I will take opportunities to convert IRA and 401k to Roth IRAs, paying income taxes from our taxable accounts.



Hope this helps address your valid concern.

 

[target2019]

What is "MMF" ?

>>>UPDATE: since someone clarified "MMF" is Money Market Fund.

So, why would we want to invest a large amount of"His IRA" , totaling in excess of $465k ($420+$45), in a money market fund?

By "Your IRA", are you referring to "His IRA" or "Her IRA" ?

Good point about the a baby steps. What is "VG MMF" ?

VG MMF is Vanguard Money Market Fund. It's VMFXX in His IRA at Vanguard. The rest of the original quote was to use Wellesley, since it is 65/35 AA which is what you asked for. But there are other ways to achieve the 65/35, with 2 or 3 funds.
The other IRA mentioned would be Her IRA. Same thing goes there, but I think you need just one fund. It is 2% of Total Portfolio.

 

[JustKickItForward]

I'm not sure how others do it, but when I consider our portfolio allocation, I consider everything together. That is, we have multiple 401k, 403b, 457 accounts from different employers, and well as IRA and Roth accounts. To achieve a 65/35 split, I need to consider all the assets in all the accounts and the investment alternatives available in each. One big portfolio, as it were; that's how FIRECalc looks at it.

It appears that Vanguard is telling you how to achieve a 65/35 split for only the assets currently in a money market account inside "his IRA", without reference to any other holdings in other accounts. In my view, that is hot helpful advice. You should view your financial affairs in a holistic manner, not in separate silos....

Thanks for confirming the Vanguard Advisor did NOT do as he promised, which was to build a plan to put the $420k in the money market acct inside "his IRA" to work with a holistic view. I will see if this can be corrected.

I just spoke with a VG advisor. Apparently, VG is unable to create a plan that includes any suggested portfolio allocation that incorporated outside funds. This went against what both the prior advisor and customer service rep coordinating the transfer of the funds from Fidelity into VG claimed.



The current advisor did two things.
1) He re-generated the plan, this time taking into account my other VG holdings (in addition to the 420k rolled over from Fidelity and currently sitting in His IRA's MMF) as well (apparently, the previous advisor not only was wrong on claiming he/VG can create a plan that includes a holistic allocation recommendation, he also neglected to include existing VG funds in my account).



2) He recommended, given the expansiveness (# of funds) of my portfolio, I pick the 65/35 allocation in the plan and start with that, and over time I can either: a) move other monies to VG and invest according to this allocation, or b) implement this allocation in my non-VG portfolio.



One point the advisor made clear was, according to my stated expenses, entire portfolio value, income flow, and intent to retire for the next 50 years, I would not need to increase risk in my account (by increasing the stock % beyond 65%).


Anyways, not a good news, but now I will review what the updated VG plan says. I may follow her advice in keeping the VG account separate from my non-VG piece, at least to get the ball rolling.

 

[jIMOh]

2. Has anyone heard of or tried that one approach (created by some professor) of splitting a portfolio into 12 equal groups, each at 8.33% of the portfolio. The 12 groups include gold, REITS, international, domestic, etc. and sounds solid. The idea in any given year, one or more of the 12 will have a spectacular performance, smoothing out the

I read about this about 20 years ago. I don't have the assets to try it... I remember the theory was by having 12 different asset classes, the portfolio rarely would have a down year and it quoted something like backtesting this there were never 3 straight negative years for the porfolio, or the portfolio always recovered from a downturn within 3 years to its original value.

 

[jIMOh]

I would handle various issues in different ways

Current retirement assets
Taxable
2.1% Janus Henderson Forty D Shr JFRDX $32,395.79
5.3% Janus Henderson Research D Shr JNRFX $80,677.99
1.6% Vanguard Mid-Cap Index Fund Admiral VIMAX $24,520.87
1.4% Vanguard Total Stock Market Index Fund Admiral VTSAX $20,719.34
0.7% WASATCH MICRO CAP VALUE FUND WAMVX $10,165.75
2.4% WASATCH SMALL CAP VALUE FUND WMCVX $36,255.48
1.7% WASATCH CORE GROWTH FUND WGROX $26,610.11

His Roth IRA
1.0% Janus Henderson Forty D Shr JFRDX $15,201.85
0.9% Janus Henderson Research D Shr JNRFX $13,837.00
0.8% Vanguard Wellington Fund Admiral Shares VWENX $12,653.73
0.1% WASATCH-FEDERATED MONEY MARKET $1,425.27
14.7% WASATCH ULTRA GROWTH FUND WAMCX $223,976.63

His IRA
3.0% Vanguard Wellington Fund Admiral VWENX $44,957.46
27.6% Vanguard Federal Money Market Fund $420,162.31

His 401k (may rollover to Vanguard at some point in time)
7.8% FIDELITY RSP TARGET DATE 2035 $118,383.76
4.6% FIDELITY RSP LARGE STK INDEX $70,132.03
2.9% FIDELITY RSP INT'L STK INDEX $44,514.15
1.8% FIDELITY RSP SMALL STK INDEX $28,126.89
1.1% FIDELITY RSP WORLD STOCK INDX $17,417.91
0.9% FIDELITY RSP MONEY MARKET $12,974.95
0.6% FIDELITY RSP TARGET DATE 2030 $9,619.58
0.2% FIDELITY RSP BOND INDEX $3,383.83

Her Roth IRA
6.8% AMERICAN FD MUTUAL FD CL F1 AMFFX $104,286.14
7.0% Janus Henderson Growth And Income Fund JAGIX $106,979.02
0.2% Schwab Cash and Money Market Fund $2,867.61

Her IRA
0.4% iShares Edge MSCI USA Value Factor ETF VLUE $5,776.44
0.2% iShares Edge MSCI Intl Value Factor ETF IVLU $3,543.94
0.0% Schwab Emerging Markets Equity ETF SCHE $682.29
0.3% Schwab Fundamental US Small Company ETF FNDA $4,329.00
0.1% Schwab Intermediate-Term US Trs ETF SCHR $1,367.50
0.1% Schwab Short-Term US Treasury ETF SCHO $1,665.18
0.4% Schwab US Aggregate Bond ETF SCHZ $5,887.84
0.3% Schwab US Large-Cap Value ETF SCHV $4,662.00
0.1% Schwab US TIPS ETF SCHP $1,445.86
0.1% Schwab Cash and Money Market Fund $1,895.05

Her 403b
0.7% FIDELITY PURITAN FPURX $10,116.64
0.0% FIDELITYGOVT MMRK PRM FZCXX $330.56

The advice to consolidate by others is excellent- does not matter how you got here, going forward, fewer funds are needed.

I would start by doing this (macro view)
Taxable (total) $231,341
His Roth (total) $267,092
His IRA (total) $465,119
His 401k (total) $304,548
Her Roth (total) $214,132
Her IRA (total) $31,251
Her 403 (total) $10,446

The only account where specific holdings matter is the taxable, because once an allocation is decided the amounts in Roth and IRA will be same, and buying/selling are not taxable events.

This is $1.5 M in assets. General 4% rule (withdraw 4% of assets per year) means the portfolio baseline could support $61,000 in income for 30 years.

Because in one post you mentioned expecting to need money for 50 years, consider using 3% as the withdraw rate and the portfolio could support an income need of $45,000 per year.

A 65-35 mix and the 4% scenario will combine well together
for the 3% scenario, I would increase large cap stocks (so the portfolio might be 75-25 or 80-20), as the dividends on the S&P 500 alone could be more than half of the 3% needed in income per year (without needing to sell investments). The current dividend yield of the SP500 is about 2% (1.8-2.2%).

Another issue is knowing how much risk you are willing to take. In one post you mentioned buckets, or taking a 4 year cash distribution, then letting portfolio grow, then repeating that 4 years later. Some on here call this buckets- one short term bucket, one long term bucket. I will suggest using 3 buckets (now-near-far/ short-mid-long).

If doing this, the Roths are the long bucket, these should be 100% stocks
Some of the long bucket will be in the IRAs (and the 401k and 403b is the same as the IRA for this part of discussion) and the taxable accounts would likely be the short term. Meaning these assets would get sold (and taxes likely due).

A poster mentioned researching rule 72t which allows taking substantially equal distributions from IRAs prior to age 59.5. This is good advice to research.

Overall, I did not see any mention of what income you need- so a next step is also to review your expenses, and represent them as an annual amount- are you spending more or less than $60k per year now. Do you expect to spend more or less than $60k per year in retirement?

 

[FreeBear]

Agreed with consensus to simplify. Consider if something happens and Spouse has to drive. Lots of people here tend to simplify over time, just too much w*rk to manage. How are you handling healthcare? Aca with managing income for subsidies? You’d be in good position with taxable and Roth. With decent pension and, eventual SS, considered bond-like, you can be strong on equities.

 

[JustKickItForward]

Agreed with consensus to simplify. Consider if something happens and Spouse has to drive. Lots of people here tend to simplify over time, just too much w*rk to manage. How are you handling healthcare? Aca with managing income for subsidies? You’d be in good position with taxable and Roth. With decent pension and, eventual SS, considered bond-like, you can be strong on equities.

Conceptually, I agree on the simplification for future management sake. Unfortunately, maybe my desire to 'beat the market/indexes' by finding outperforming managed funds will prove to be detrimental in hindsight 25-35 years from now. More thought on this on my end...




For healthcase, spouse is currently employed FT w/ heath care covered. If she retires as planned in 6 years, we will pay ACA premiums. I looked into this last year (not deep dive, but a few hours to get the concepts of the program), and if I understand and recall correctly, monthly costs was manageable (no more than $500/mo (ball park) for the both of us ?) - premiums paid from Pension, Taxable and Roth, managed in such a way as to minimize the premiums. The one task I did note from that look was to seek opportunities over the next five yrs to convert as much IRA/401k into Roth as possible.



Yes, my gut feel with pensions and SS on the horizon, I can be a little more heavy on equities. With reading people's input here the past few days, I am thinking I can maybe a 75/25 - 80/20 (stock/bond) range would work for me, and possibly adding some more international into the mix.

 

[JustKickItForward]

I would handle various issues in different ways

...

Overall, I did not see any mention of what income you need- so a next step is also to review your expenses, and represent them as an annual amount- are you spending more or less than $60k per year now. Do you expect to spend more or less than $60k per year in retirement?

Thank you for the detailed response. Since there is so much to digest, I will go through it when I have some quality time, but I just wanted to respond to your point in green.



I stated it in the original, long post. Here is the section along with a few cash flow-related details:

Plan to spend approximately $15,000 in 2020 for kids’ first cars
...
Total Annual Expense (includes property tax, home insurance, HOA fees, vacations, groceries, car insurance, entertainment, etc.): $51,000
His Employment: currently retired (age 50), possibly work part time until age 55 (2024) with goal of take home $8500/yr
Her Employment: take home approx. $22,700/yr. Will stop work at age 55 (2025)
His Pension: $24,000/yr starts in 2024 (no COLA, will pass 100% to her)
Her Pension: $1,200/yr starts in 2025
His SS $30,800/yr starting in 2036
Her SS $9,000/yr starting in 2032

 

[FreeBear]

For healthcase, spouse is currently employed FT w/ heath care covered. If she retires as planned in 6 years, we will pay ACA premiums. I looked into this last year (not deep dive, but a few hours to get the concepts of the program), and if I understand and recall correctly, monthly costs was manageable (no more than $500/mo (ball park) for the both of us ?) - premiums paid from Pension, Taxable and Roth, managed in such a way as to minimize the premiums. The one task I did note from that look was to seek opportunities over the next five yrs to convert as much IRA/401k into Roth as possible.

Yes, my gut feel with pensions and SS on the horizon, I can be a little more heavy on equities. With reading people's input here the past few days, I am thinking I can maybe a 75/25 - 80/20 (stock/bond) range would work for me, and possibly adding some more international into the mix.

I like how you're leveraging the time on DW's health insurance to Roth convert, then presumbly both go on ACA and have the opportunity to optimize/manage income for ACA.

Have you played with overall asset allocation in Firecalc and other simulators? In Firecalc, you enter your pensions and SS (COLA, or no COLA), then use the "investigate" tab to show success % as related to asset allocation. It sounds like your pension and eventually SS will keep your withdrawal rate low enough that almost any reasonable AA will give high success. Still, high % equities may help leave a big legacy, albiet, with greater volatility on the way.


Any idea what your overall expense ratio (ER) is? Could be fun to calculate given the complexity of your port. Even more fun, calculate this in terms of dollar$. Compare to bare bones passive index funds at Fido/VG/Schwab.

 

[Rianne]

Questions below (@ the end)

Debt: NO DEBT, JUST PAID OFF HOME (worth $750k, conservatively)
Tax Filing Status: Married Filing Jointly
Tax Rate: 12% Federal, xx% State
State of Residence: CALIFORNIA
His Age: 50
Her Age: 49


Total Annual Expense (includes property tax, home insurance, HOA fees, vacations, groceries, car insurance, entertainment, etc.): $51,000


Her Roth IRA
6.8% AMERICAN FD MUTUAL FD CL F1 AMFFX $104,286.14
7.0% Janus Henderson Growth And Income Fund JAGIX $106,979.02
0.2% Schwab Cash and Money Market Fund $2,867.61

3. Any comment/concerns/questions on the approach outline above?

Am I missing something? Your investments are complicated and I have no valuable comment but to simplify, like others have said.

My questions:
1. Your wife accumulated @ $214,000 in her Roth, which is amazing since she is 49 yrs. old. When did she start contributing?
2. Total annual expenses $51,000 in CA including property taxes on a $750K house is also amazing (especially with 2 kids). What are your yearly property taxes? And how do you keep your expenses so low? We are super frugal, no kids and can't keep our spending < $60K.


Don't mean to be disrespectful, I'm just curious.

 

[Gumby]

Conceptually, I agree on the simplification for future management sake. Unfortunately, maybe my desire to 'beat the market/indexes' by finding outperforming managed funds will prove to be detrimental in hindsight 25-35 years from now. More thought on this on my end...

My only advice on this topic is that you should not let perfect be the enemy of good enough. Your goal is to meet your retirement needs, not to "beat" anything or anyone.

 

[jIMOh]

Thank you for the detailed response. Since there is so much to digest, I will go through it when I have some quality time, but I just wanted to respond to your point in green.



I stated it in the original, long post. Here is the section along with a few cash flow-related details:

Thank you. I tired reading most, clearly missed that important detail.

Next set of macro math

$51,000 in expenses, a 4% withdraw rate/ distribution would be $61,000. From very simplistic math retiring with a 60-40 allocation would last 30 years using basic distribution guidelines (increase income 3% per year, rebalance portfolio each year, 60% stocks, 40% bonds)

$51,000 income needed
current age 50, minimum SS age likely 67 $31,000, pension of $24,000 at age 55
SO age 49, minimum SS age likely 62 $9000 (hers) then spousal benefit at 66 (when spouse is 67) pension of $1000 at age 58
Is claim and suspend still a social security option?

I would plot this on a timeline

2019 ages 50/49 need $51k from investments
2020 51/50 need 51k+3% from investments
2021 52/51 need 51k from investments
2022...2024 need $51k +3% (compounded) from investments
2025 need $27k from investments, $24,000 pension starts for you
then keep plotting this out until all incomes kick in

As I plotted this out, I saw a pattern-
start at a 60-20-20 allocation (stocks-bonds-cash) using the cash to be the $51k investments needed. As cash is spent, only rebalance to 25% of cash taken out (so if you spend $51k cash, the rebalance at year end suggests only liquidate enough for $13k cash). After 4 years you have set aside 5th years income in cash. Then once first pension kicks in, set aside another 1X annual expenses in cash and maintain the 2X expenses in cash until situation changes. I've heard the yield on Wellesley is twice this, so you could put $650k in Wellesley, this will replenish cash each year, then put rest in bucket 3. YMMV. Check yields on funds chosen for this bucket.

Then per the buckets discussion you have 2 or 3 buckets
spending money (cash) which is 4X expenses at retirement beginning, but once in 4 years in retirement this will be only 2 years expenses in cash.

second bucket is mid term, it's goal is to generate $27k cash per year (2% of portfolio). Dividends on S&P 500 of $1.3M would be about $27,000 per year. This means this bucket could be 80-20 stocks-bonds.

Rest of portfolio could grow/ be 100% stocks.

 

[JustKickItForward]

Am I missing something? Your investments are complicated and I have no valuable comment but to simplify, like others have said.

My questions:
1. Your wife accumulated @ $214,000 in her Roth, which is amazing since she is 49 yrs. old. When did she start contributing?
2. Total annual expenses $51,000 in CA including property taxes on a $750K house is also amazing (especially with 2 kids). What are your yearly property taxes? And how do you keep your expenses so low? We are super frugal, no kids and can't keep our spending < $60K.


Don't mean to be disrespectful, I'm just curious.

Hi Rianne. First, I do not feel disrespected at all, not even a bit, so no need to mention it.


Second, both my spouse and I grew up 'poor'. My parents immigrated to the US with my older siblings in tow with literally only a few dollars in their pockets (I think it was about $35'ish if I recall my dad correctly), and I still remember seeing my mom count food stamps at home and using them to pay for groceries. My spouse immigrated to the US when she was around 20 yo and although did not experience the joys of licking and counting food stamps, let's just say she and her family were and are nowhere near middle class. That said, our modest upbringings has played a big part in us as adults working hard and watching what we spend throughout our adulthood.


To answer your questions, we started contributing to my wife's Roth the year it was introduced. By then, we had already had a few years' experience under our belts contributing to mutual funds (and I, buying stocks) while the two of us were in college, so when I heard of this new tax-free IRA, so I jumped right on it. In hindsight, I had ABSOLUTELY NO CLUE at the start all the benefits of the Roth as I just just learned this past year being out of work - so this was one of the most fortunate things we have done, financially.


Yearly property taxes are around $7000.



To your question about keeping expenses "low" in CA, we simply keep a conscious mind on not over spending. We have never really put together a budget, but one (of several) things that helped me is we have one main checking account that we use for accepting income and paying expenses from - at the end of the month (or the 23rd of the month, to be exact), if we had >$0 dollars, we did not overspend. If we got close to negative, I tap our 'master account' for money and we did a little better the next month or two to not have our main checking account go negative. Simple concept, really.


To give you an idea of our expenses, here is something I put together last year (when I was contemplating ER), something quick and dirty that I carry on my phone so I can play with numbers whenever I feel like it. Hope this clarifies our situation a little.

Prop Tax + Home Insur 750
HOA 650
Car Insur 100
TS MF 550
Food 300
Inet 50
TV 60
Cell 150
Util 150

-------------------->2760
Other junk 1000
------------------------->3760
Even more fluff 500
------------------------------->4260
$4260

As you can see, this an annual budget of 51,120, but we do find ourselves going over quite a few months during the year (think Christmas, vacation time, tax season, etc.), but then we just tap into our "master account" to replenish our main checking account.



We have no debt (just paid off the house, paid off my car a few months before I lost my job, and my wife's van is near 20 years old), and that really helps. Luckily for us, the kids do not enjoy extracurricular activities that costs upwards of $3000-$5000/yr per kid (think uniforms, travel budget, etc.), so we do have the opportunity to travel relatively a lot (compared to people we know) during the year. This is something we enjoy because neither of us had the means to do so as kids. In hindsight, another lucky thing we did in the late 90's was discover timeshares, as this has really made our travels possible because lodging normally takes up a large part of the travel budget.



Hope this helps.

 

[brucethebroker]

May I ask what "that warm weather location " was ?
On a side note, if not obvious, one (of several) reason I did not mention on why I wouldn't mind the PT gig is to minimize digging into our portfolio this early in our transition to retirement, basically to give it time to work/grow.

Won't say where, sorry. But he was making $15 an hour. Have also talked with a couple of airport to rental car shuttle drivers and a retiree working for a ski resort in Michigan that seem to like it.

Retirement is all about the income. From any source. If you bring in even a little "side hustle" income, it takes pressure off your portfolio. Plus, the job itself could be interesting.

 

[JustKickItForward]

...

Have you played with overall asset allocation in Firecalc and other simulators? In Firecalc, you enter your pensions and SS (COLA, or no COLA), then use the "investigate" tab to show success % as related to asset allocation.

Yes, I played with Firecalc', but not other simulators. Unfortunately with Firecalc, I simply guessed at my overall market portfolio allocation, but tried best guesses. I did enter pension and SS #'s and these normally push my success into the +90% ranges.

...It sounds like your pension and eventually SS will keep your withdrawal rate low enough that almost any reasonable AA will give high success. Still, high % equities may help leave a big legacy, albiet, with greater volatility on the way.

Yes, withdraw (WR)rates are could be around 1.8% -2.5% as portfolio currently stands. Now, as I convert more IRA/401k funds to Roth, the WR could creep up a bit (unknown).

...Any idea what your overall expense ratio (ER) is? Could be fun to calculate given the complexity of your port. Even more fun, calculate this in terms of dollar$. Compare to bare bones passive index funds at Fido/VG/Schwab.

I spent some time the past two days playing what-ifs with the $420k (in the VG MM). Making an made an assumption I will consolidate my multiple Fidelity 401k funds into one 2035 Target Fund (which I may eventually do, to simplify my holdings) and I have something that maybe comfortable moving forward with. Using Morningstar's X-Ray tool, my avg expense ratio dropped from 0.82 to 0.62. Unsure how accurate MS is, however.

 

[JustKickItForward]

... But he was making $15 an hour. Have also talked with a couple of airport to rental car shuttle drivers and a retiree working for a ski resort in Michigan that seem to like it.

Retirement is all about the income. From any source. If you bring in even a little "side hustle" income, it takes pressure off your portfolio. Plus, the job itself could be interesting.

I know two people driving shuttles locally and they also are earning $15/hr and they like their 'easy' jobs. The only thing that may bother some folks is hours are not fixed for them. They normally receive calls one or three days out asking for their availability.

Yes, side hustles if light on stress and body, could prove to be rewarding, if anything else at least getting out of the house. And any $income would at the very least give a small psychological boost that your portfolio is not being touched, but in reality, it may not make any difference - it really depends on your situation.

 

[JustKickItForward]

I read about this about 20 years ago. I don't have the assets to try it... I remember the theory was by having 12 different asset classes, the portfolio rarely would have a down year and it quoted something like backtesting this there were never 3 straight negative years for the porfolio, or the portfolio always recovered from a downturn within 3 years to its original value.

I will start another thread on the website/approach that I came upon, we could be talking about the same thing.

 

[JustKickItForward]

Aside from spending bits and pieces of time yesterday and today reading and responding to the great responses, I spent more focused time on "Step 1. of Possible Forced Retirement" (the topic of this thread), which is to allocate the newly rolled over 401k cash from Fidelity to Vanguard. I feel comfortable that I have come up with something workable, which I would like to summarize and take any input/suggestions.
​

However, unless you kind 'peeps' (as my nieces love to say) come up with something huge I am missing, I may likely will stick to what I have, this go around. I have come to a realization that the current task/step in reallocation the new Vanguard $$$ will be the first of several steps in simplifying our overall portfolio (such as reducing number of accounts and funds) as well as getting to a more ideal asset allocation. IOW, more steps to come : ) ... and I will consider any input I receive here towards future asset re-allocations.



I basically started the process by mentally consolidating the eight Fidelity 401k funds I have remaining into one fund, the Fidelity Freedom 2035 (FFTHX). This may actually be something I will do in reality (in the near term) as this accomplishes three things:


a) simplifies that 401k account

b) since I already have the Fidelity propriety fund (7.8% FIDELITY RSP TARGET DATE 2035), this move is a realistic scenario/next step

c) I wanted something that I can use in the current asset re-balancing task since that Fido 401k acct makes up a good percentage (20%) of our overall port and it would not be prudent to leave that account out.


I then used Morningstar's X-Ray tool and worked through many iterations until I came up with an overall portfolio asset allocation I am comfortable moving forward with, it is follows:


1) As mentioned above, I consolidated the eight Fidelity funds (in his 401k) into one Fidelity Freedom 2035 FFTHX $304,553

2) In the VG retirement acct:

a) I added the following funds/ETFs:
VG Dividend Growth Inv VDIGX $75,000
VG Total Int'l Stock ETF VXUS $30,000
VG Total Bond Market ETF BND $60,000
VG Total Int'l Bond ETF BNDX $20,000

b) I put additional $ into the following existing funds:
VG Mid Cap Index Admiral VIMAX $140,000
VG Wellington Admiral VWENX $95,000




The resulting overall portfolio looks like this:


Asset Allocation
Cash 5%
US Stocks 70.7%
non-US Stocks 12.8%
Bonds 11.6%
Others 0.4%


World Region
Americas 86.6%
Greater Europe 7.7%
Greater Asia 5.7%

Stock Sectors
Energy 4.43
Materials 3.63
Industrials 13.44
Consumer Discr 11.48
Consumer Staple 5.84
Health Care 15.73
Financials 13.70
Info Tech 20.08
Comm Svcs 6.03
Utilities 2.31
Real Estate 3.33


Stock Style
Val Core Gro

18 21 21 Lrg
05 07 12 Mid
02 05 09 Sml


Bond Style
Ltd Mod Ext
01 37 01 High
00 30 30 Med
00 00 00 Low


Fees and Expenses
Expense ratio 0.61
Avg gross expense ratio 0.61
Potential cap gains 24.40


I will take some of the unanswered topics in this thread (such as comments on distribution strategies/suggestions moving forward in time) to a separate thread(s).

Thanks again, everyone for you input and I look forward to your input on my proposed asset allocation.
....

 

[Rianne]

find myself not really having the internal desire to get back into the professional world slaving away for 40-50 hrs/week and playing the corporate game. I). I am open to some part time work at a low stress job (like driving a hotel shuttle, etc.) for the next five years until my dear wife also retires would be ideal.
JKIF (Just Kick It Forward)

Thanks for reply about spending.

You did not mention your field of work. You mentioned some training. DH spent 30 yrs. on the corporate treadmill and paychecks were very nice and allowed us to FIRE (for the most part). He wanted to stay connected to his food science world in a less stressful way. He has an LLC, works from home and makes his own hours. This brings @ $40K/year and allows us to be on ACA. Our HI would be $20K+ without ACA. With our VG investments, this keeps us under the $61K threshold (go over and you're screwed). Our bucket of cash makes up for our spending.

DH uses YourEncore and the university for his consulting gigs. He connects the university to corporations for student internships and projects companies outsource for research. Make use of your knowledge and expertise, while following a comfortable sideline for extra income. Somehow, it doesn't seem like driving a limo suits you.

 

[JustKickItForward]

Hi Rianne

Thanks for reply about spending.

Just curious as you mention you also try to be frugal, like us. What stood out between my "back of the napkin" expense and your own?

... Somehow, it doesn't seem like driving a limo suits you.

I have done all different types of work since childhood, and although limo driving is likely not my gig (know someone who is currently pursuing the state/local licenses to do this type of work), some PT chaueffer/private UBER work could suit me. Also, shuttling function of some sort PT may also suit me. I have spoken to contacts doing both types of jobs and have solid leads (directly to company recruiters hiring managers ) to find out more details.

 

[SecondCor521]

I have done all different types of work since childhood, and although limo driving is likely not my gig (know someone who is currently pursuing the state/local licenses to do this type of work), some PT chaueffer/private UBER work could suit me. Also, shuttling function of some sort PT may also suit me. I have spoken to contacts doing both types of jobs and have solid leads (directly to company recruiters hiring managers ) to find out more details.

Not Rianne, but had a random thought that might be helpful.

My Dad lives in a retirement home (continuing care facility, actually), and they have a couple of vans that the home uses to transport residents to doctor's appointments, grocery shopping, and the like. Depending on if you like dealing with 55+ year old people, it could be a job for you. You could apply directly to the retirement homes I would think.

 

[JustKickItForward]

Not Rianne, but had a random thought that might be helpful.

My Dad lives in a retirement home (continuing care facility, actually), and they have a couple of vans that the home uses to transport residents to doctor's appointments, grocery shopping, and the like. Depending on if you like dealing with 55+ year old people, it could be a job for you. You could apply directly to the retirement homes I would think.

Thanks for the idea - I will keep that in mind. And, I do not mind dealing with 55+ yrs old. But would drivers need to constantly, physically assist the passengers, like with wheelchairs, getting in and out of the van, etc.?

 

[JustKickItForward]

...

I basically started the process by mentally consolidating the eight Fidelity 401k funds I have remaining into one fund, the Fidelity Freedom 2035 (FFTHX). ...


I then used Morningstar's X-Ray tool and worked through many iterations until I came up with an overall portfolio asset allocation I am comfortable moving forward with, it is follows:


...

Back to the main point of this post which is to allocate my newly rolled over 401k cash (Fido) to VG MMF, what are thoughts about actually investing the monies, both on timing and how to do it?


My thought is to simply start today and put 1/4 of the MMF to work, then do the same over the next three months until the MMF is zeroed out.


Given the FMOC (the Fed) decision yesterday to keep rates the same but language indicating likihood of rate cuts in the next month or two and the China/US trade scuffle (the two leaders are meeting very shortly), are there reason(s) to hold off deploying the MMF ?

 

[SecondCor521]

Thanks for the idea - I will keep that in mind. And, I do not mind dealing with 55+ yrs old. But would drivers need to constantly, physically assist the passengers, like with wheelchairs, getting in and out of the van, etc.?

Generally not.

First, most of the people who are using the van can get in and out themselves. They may bring along a cane or a walker. The people who use wheelchairs typically aren't the same folk as use the vans.

Second, they might not want the drivers helping for liability reasons. There's a line between services (trash, cleaning, driving, changing lightbulbs) and healthcare (transfers, toileting, memory care, etc.) - probably because the latter has licensing and malpractice issues. I imagine being a driver is on the services side, not the healthcare side.

Back to the main point of this post which is to allocate my newly rolled over 401k cash (Fido) to VG MMF, what are thoughts about actually investing the monies, both on timing and how to do it?

It seems that you like to actively manage stuff to try to get ahead. I'm more of a passive LTBH indexer, so I don't try to do that. I basically have three accounts (tIRA, RothIRA, taxable), and have three mutual funds (VTSAX, VBTLX, VFIAX) across those three accounts.

Once I make an investment decision or an investment change, I go ahead and make the change that day. In my worldview, I see no reason to wait. But then, I generally don't make investment decisions based on the FOMC, the level of the markets, tariffs, or much else that is on the news. I invest based on my time horizon, risk tolerance, and goals.

Good luck!