63 and semi-retired for last 7 years

[PapaToTwo]

Hi, my wife and I are both 63. She is a manager for a large medical services company. I closed down my computer consulting business 7 years ago after a mistake in judgement that cost us close to a million dollars in savings and the associated early withdrawal IRS penalties and taxes. I have a couple of clients that together pay me around 60,000/year on a part-time basis. Between us, we make around 110,000/year.

Our remaining retirement nestegg took quite a beating (35%) in the market last year until I rebalanced into a safer allocation and stopped the bleeding. My wife will retire at age 66, and I will continue in a limited consulting practice for a few years after that. Until then we will add approximately 25K/year to our 401K and IRAs.

We currently have 410,000 in tax-deferred accounts and 60,000 in an after-tax account. The Tax deferred money is allocated as follows:

22% in MM funds
29% in OAKBX
22% in FBIDX
3% in NBGEX
6% in VIPSX
18% in an Insurance company variable annuity

We have 200,000 equity in our home, valued at 240,000.00 and very little debt. Between our SSA benefits (Last statement shows 47K combined), an old 4000.00 non-cola pension benefit and around 25K part-time earnings for the first 3 or 4 years, and a 20K draw from retirement funds we should be OK.

I am considering changing my allocation to 80% in Vanguard's Target Retirement 2015 and 20% in FBIDX. Any suggestions/advice from more experienced investors would be appreciated.

On a personal basis, I love reading, domestic travel, photography and fly fishing. And, of course, playing with my 9 yearold grandson and 4 year old granddaughter.

 

[Bestwifeever]

Welcome to the boards, Papa! I don't have any suggestions or advice other than you seem to have thought out a plan that will work for you and your wife. And no doubt that allows time for those two grandchildren!

 

[donheff]

Good on you for climbing back out of that hole. What in the world did you do, convert everything to gold in anticipation of a Y2K apocalypse?

 

[travelover]

Welcome Papa. While you may get some good financial advice here, I think you'd find it useful to also post over at the Boglehead Forum for a second opinion.

Bogleheads Investing Advice and Info

 

[militaryman]

Looks like you will be set as long as you can control your spending. If I were you I would not take on very much risk with the remaining investment $$

You'll get your greatest gains by heavily investing in those Grandkids!

 

[PapaToTwo]

Even dumber - I ventured outside my expertise

Good on you for climbing back out of that hole. What in the world did you do, convert everything to gold in anticipation of a Y2K apocalypse?

Although the event transpired shortly after Y2K, It had nothing to do with that non-event. I ventured outside my line of business and partnered up with the builder who built my vacation home in the New Mexico mountains. I developed and marketed - he built. To make a long story short, my partner cut corners on ground preparation for foundations poured on steeply sloped lots. Two foundations cracked severely and a 3rd broke apart and collapsed a 3000 sq foot home that was near completion. My "partner" moved to Idaho and left me to make the customers whole again. I forgot to mention that in addition to the cash loss - I also lost my ski chalet.

Lesson: You have no business being in a business you know nothing about. That lesson is the reason I am posing questions about investing on this forum.

 

[PapaToTwo]

Any advice? Suggestions?

Hi, my wife and I are both 63. She is a manager for a large medical services company. I closed down my computer consulting business 7 years ago after a mistake in judgement that cost us close to a million dollars in savings and the associated early withdrawal IRS penalties and taxes. I have a couple of clients that together pay me around 60,000/year on a part-time basis. Between us, we make around 110,000/year.

Our remaining retirement nestegg took quite a beating (35%) in the market last year until I rebalanced into a safer allocation and stopped the bleeding. My wife will retire at age 66, and I will continue in a limited consulting practice for a few years after that. Until then we will add approximately 25K/year to our 401K and IRAs.

We currently have 410,000 in tax-deferred accounts and 60,000 in an after-tax account. The Tax deferred money is allocated as follows:

22% in MM funds
29% in OAKBX
22% in FBIDX
3% in NBGEX
6% in VIPSX
18% in an Insurance company variable annuity

We have 200,000 equity in our home, valued at 240,000.00 and very little debt. Between our SSA benefits (Last statement shows 47K combined), an old 4000.00 non-cola pension benefit and around 25K part-time earnings for the first 3 or 4 years, and a 20K draw from retirement funds we should be OK.

I am considering changing my allocation to 80% in Vanguard's Target Retirement 2015 and 20% in FBIDX. Any suggestions/advice from more experienced investors would be appreciated.

On a personal basis, I love reading, domestic travel, photography and fly fishing. And, of course, playing with my 9 yearold grandson and 4 year old granddaughter.

I would really like to draw on the advice and experience of folks who have "been there and done that". My choices are limited to a few funds administered by Fidelity (FBIDX,FCNTX,FDIVX,TGIGX,HWMIX,SMCEX,OAKBX and all of the Vanguard Target Retirement funds). Our annuities have been battered so badly (Mass Mutual - blue chip stocks) that I think I should hold on to those and hope they recover for our later years in retirement. I have enough cash for our first 5 years, plus I am fortunate to have a readily marketed skill for part-time work so it is the middle range I am concerned with - from 5 - 15 years out.

Fidelity is offering something called "BrokerageLink" that would open up a lot more options, but I am somewhat hesitant to incur fees. I think I agree with the Bogle approach, but am not wedded to it.

Thank you.