Hi! I am prepping to jump off the fast lane in 2016

[Wheels down]

Hi! I am a 52 year old female; single; no children

Due to a recent company buy-out, I received severance pay, bonus & vacation pay-out and deferred comp payout. Working on a transitional basis (probably another 12 mos?) for company that bought our business. My goal: after this 1 year gig, move into semi-retirement mode with hopes of bringing in modest income via part time or consulting work.

My current financial status is:

• 401k assets (in prior employer’s plan): $550k in T Rowe Price funds – largely equities, but can all be rolled over into new IRA acct if/when I choose
Post-tax assets:
• $720k in savings & CDs (currently with relatively short maturity) earning 1-2%
• $800k in Vanguard – mixed bag of funds (Wellsley/Wellington/Target Date) – overall 65% equities with total unrealized gains of $86k
• $440k in recent work payouts – in Fidelity account but largely uninvested currently
• Approx. $200k in home equity; no mortgage or other debt

No pension or other ancillary income going forward; generally spending $50-$60k annually excluding any needs to fund private health care insurance until Medicare eligible.

My biggest dilemma currently: how to invest:
- Private investment management? (I’ve spoken with a personally recommended Edward Jones advisor who I like, but am queasy about the fees – can I get my money’s worth?)
-Ad hoc / robo-investment advice? Looking into options such as Vanguard Investment Advisor Services, Betterment, Wealthfront
-DIY –I know that appears to be the consensus here. I am leaning in that direction but still feel the need for outside guidance at least in the initial set-up stage.

The questions I’ve been asking myself: Would the "standard" proposed asset allocation for my age be too aggressive for my admittedly less than average risk appetite? What do I need to know to perform effective tax-loss harvesting and overall tax management for myself? What are the pros/cons of ETFs vs funds? Vanguard vs Fidelity? Concentrate all in Vanguard for most efficient fee/service structure or spread out a bit just not to have all my eggs in one basket? Is there any downside to rolling over my T Rowe Price 401k to a Vanguard or Fidelity IRA?

Tips and guidance would be welcome!
Thanks

 

[TallTim]

Welcome to the Forum and congratulations on your new-found freedom/flexibility.
In terms of whether to pull the cord in 2016, I am sure several here will steer you to these Qs:

http://www.early-retirement.org/for...-answer-before-asking-can-i-retire-69999.html

As far as understanding whether your assets will support your plans, you may want to consider running one of the on-line tools, like Firecalc - Firecalc.org. It's very popular on this site and is a pretty powerful tool; in order to properly evaluate it, you'll need to know how much you spend per year, including taxes and healthcare.

To your specific Qs, I think you'll get a strong DIY opinion from the crowd here -- particularly since you have most of 2015 to learn and prepare while working the transition period.

In terms of funds and allocation, I and many others here are big fans of simplification -- i.e., fewer funds and fewer firms/advisors. I am guessing if you dig around the websites of the funds, you can get the actual data about what's in each fund and may learn there is more overlap than you think. In any case, I wouldn't see any real downside to consolidating in a low-cost provider like Vanguard or even Fidelity; that way, if/when you roll the TRP over into an IRA, you'll have most all of the pile in one or at most two firms and can then set up/plan an allocation that suits you. I would see no downside in rolling all of it into Van or Fido so long as you don't have a tax hit from any of those sales/conversions if needed.

One more point in terms of advice, I'm not a Vangaurd customer (many here are who will chime in), but I believe you can have one of their advisors review things for you for either a small fee or even free if you have $x on deposit with them. If that's in fact still the case, you may find that a useful alternative and path for increased learning/understanding.

Again, welcome and enjoy the forum. Many sage, wise heads here who can help

 

[2017ish]

Hi! I am a 52 year old female; single; no children

...

My current financial status is:

[2.5K financial assets & 60K spending + health Ins.]



My biggest dilemma currently: how to invest:
- Private investment management? (I’ve spoken with a personally recommended Edward Jones advisor who I like, but am queasy about the fees – can I get my money’s worth?) RUN, Don't Walk, in the other direction.
-Ad hoc / robo-investment advice? Looking into options such as Vanguard Investment Advisor Services, Betterment, Wealthfront Maybe. It is cheap handholding/guidance and gets you on a reasonable course.
-DIY –I know that appears to be the consensus here. I am leaning in that direction but still feel the need for outside guidance at least in the initial set-up stage. Naturally, I think this is best, but you know yourself better than any of us internet strangers can.

The questions I’ve been asking myself: Would the "standard" proposed asset allocation for my age be too aggressive for my admittedly less than average risk appetite? Only you can answer this. But keep a reasonable equity position regardless. The more you go under 50% equity, the more risk you have long term.

What do I need to know to perform effective tax-loss harvesting and overall tax management for myself? Betterment? Actually, not that hard. Just become familiar with the basics of the income tax code. The bigger issue is if you want to shoot for ACA subsidies; then, income management is critical.

What are the pros/cons of ETFs vs funds? For me, I treat them as equivalents. The important thing is what assets are in them, and what is the cost.

Vanguard vs Fidelity? Concentrate all in Vanguard for most efficient fee/service structure or spread out a bit just not to have all my eggs in one basket? You can buy Vanguard ETFs in a Fidelity Account. I have Vanguard and no knowledge of Fidelity, but there are a lot of people who swear by Fidelity's customer service, while even Vanguard Fans are more likely to swear at its customer service!

Is there any downside to rolling over my T Rowe Price 401k to a Vanguard or Fidelity IRA? Unlikely to be a downside, particularly if its investment choices are pricey. (Don't intermingle your 401k-rollover-IRA with a regular IRA; in the unlikely event of bankruptcy, it could muddy the works for protection of the monies.)

Tips and guidance would be welcome!
Thanks

Congrats, you've got a nice kitty together!

E.T.A. I also second what TallTim said while I was typing!

 

[38Chevy454]

With your total amounts over $1M, Fidelity or Vanguard will provide some financial advisor help for free. I agree with Tall Tim, do some consolidation and it is a lot easier to keep track of your investments, as well as adjust your allocation. Fidelity may be a better choice as they have a bit better hand-holding to get you started.

Given your age, you probably are a bit conservative for a 40+ year retirement timeframe. Of course every person has different risk tolerance, but I think 60-70% equities is about right. Just make it widely diversified funds so you can generally ride the overall market. Don't try market timing or other methods since you really need to have better education on that and take time to watch. Most here do self-advised with pretty wide diversification and have a leave it alone and spend time enjoying retirement perspective.

 

[Fishingmn]

I think 60-70% equities may be too high.

We can assume she's pretty conservative when it comes to risk given her current portfolio. In addition, she can afford to be more conservative given the size of her assets and modest expenses.

 

[pb4uski]

Agree with others that you should go through the Vanguard financial planning process with one of their CFPs. Given the amount you have with them I think it would be free for you. Also, run your situation through Firecalc.

You should have enough. Assuming $10k a year for health insurance, your total spending would be $70k and you have $1,960k of financial assets so that is only a 3.6% WR, but will be lower once you factor in social security and any consulting income your earn.

A 50/50 AA is quite conservative and should be comfortable for you, equities provide growth in the long term to provide inflation protection. Investing in equities has helped put you in the position where you can retire at 52... keep dancing with the guy that brought you to the retirement dance.

You'll want to have income investments in your 401k and equities in you taxable accounts. Read about tax efficient placement on bogleheads and Vanguard will help you with this as well.

 

[daylatedollarshort]

I would go ahead and talk to the mutual fund reps - it might be free with your assets and see if you like what they have to say. If you have a low risk tolerance, you may also want to also consider reading books and articles by Zvi Bodie and consider investments like individual TIPS in addition to mutual funds. The Bogleheads forum also has some excellent information and numerous posts on matching strategies for retirement.

We have a low risk tolerance in my household and do not feel most of the mutual fund company advice we've received really suited our desired risk levels for our retirement savings.

 

[Golden sunsets]

I read this as 2.5M in investable assets so $70,000 would be just under 3 % SWR, but I think the OP realizes she has ample assets to retire now. In addition to or instead of using the free services of Vanguard you might feel comfortable if you visited with a fee only planner one time to go over your plan. Before you do that though I would start reading all you can on the subject of investing. Once you have absorbed investing theory and practical advice from a few good sources you could visit a FP to validate your informed plan.