47 and ER'd for 2 Yrs. Need to do AA and Inv Plan

[tennistime]

Hi to all. Been reading the forum for a few months, and have enjoyed the topics and posts.

As background, I ER'd in early 09, after 20+ years in consulting and various megacorp jobs. DW, also 47, "ER'd" as we had our first of 2 kids (now 16,14). Much of our investable assets were gained through company stock, via an IPO. Sold off large company stock position over last 15 months, and am sitting at almost 85% Cash, 15% Equity. Glad to be out of the large stock position in my former company, and purposely kept the rest in cash to minimize risks. Now feel like we can sleep well at night.

It's time to get serious about investing for the next stage. Have run FireCALC and other retirements models. Looks like we can live on about 2.5% SWR. Expenses are pretty well managed, with no debt.

I'm in the process of doing a Vanguard "free" financial plan with one of their CFPs. Their prelim results maps us into a 3 fund approach (Boglehead model?) with Total Stock Market, Total Int'l Market, and Total Bond Market. I like the simple, low-cost approach. Have been with VG for 20 years. They also target us at either 50/50 or 40/60 Stock/Bond allocation.

I don't know if I need this kind of risk in my portfolio, given that I only need 2.5% SWR. Looking at 45+ year time horizon. Have considered SPIA, but at our age and current interest rates, it probably makes sense to wait several years.

Any thoughts on AA balance? Are we nuts for going lower than 40/60 at our age? Am I missing anything in discussions with VG? Does this 3 fund approach seem to basic? Thanks and look forward to your posts.

[RunningBum]

Welcome and congrats!

50/50 or 40/60 seems like very low risk to me at your age. In my opinion, you probably have more risk that you'd have some major event where you might like or need more money (that having 40-50% equities gives you a better chance of accumlating) than there would be risk of running out of money due to a collapse of stock values.

Those 3 funds are very basic but those are fine as your core or even your only stock/bond holdings. I wouldn't argue if someone said you should further diversify with precious metals or real estate but I've done very little of that myself other than my house (had 2 for awhile, now 1) and a very small precious metals fund.