Diversifying My Retirement Funds and Confused

[Rob]

Hi-
* * *I've always been very impressed with the wisdom a lot of you show, and the expertise you have about retirement income.* So here goes.....
* * *Back around 1977 I started putting money into a very reputable private retirement pension plan.* I've been so obsessed with retiring in relative comfort that I consistently put money into the this private pension plan on a monthly basis for all these years.* However, here I am 58, soon to be 59, and I have about $760,000 in this retirement account but very little money in the bank.* Not only that, but because I am a conservative investor, I have about $600,000 of all of this money in an annuity getting 5.1%, and the rest in stocks, bonds and real estate stocks.* I have very little money in the bank, and all my life my rent has always been paid for by the school I have worked for.
* * *I talked* to a financial plannner today who said that I lacked diversification.* He made me feel sort of bad, especially after I thought I was diversified.* Sometimes I think that with life so short and all this money tied up waiting for me to start using, I almost feel like I should start using it soon.*
* * *Here are my 1st question.* Given that I do not have any sort of extravagant lifestyle, is it reasonable to retire early so that I can person can start using some of my retirement income to re-invest and become more diversified?* My retirement income would be about $52,000/year.* Any experience investing retirement income out there?
* * *Here is my 2nd question.* If I retired using only the interest on the $600,000 annuity, I would be getting about $32,000* per year, and then I could work part-time and wait a few more years to get full retirement (which increase every year the longer I wait)* Would that be more advisable than getting the full retirement?* The only problem with this is I would not be able to re-invest the money and probably spend all of the $32,000 to live.
* * Here is my 3rd question.* Do many of you work part-time where you really can supplement your retirement income while working very few hours a day?* Do you do it because you need to or want to?*
* * *My health/medical insurance will be inexpensive in my case, so that is not a big concern.* I would have to get used to actually renting a place.* I've never done that in my life.
* * Thank you for any advice you can give.

Rob

* * *

[yakers]

Warning! Danger, Will Robinson (or Rob, in this case)!

Is this a fee only financial planner? While I am not big on annuities they have aplace and since you are already invested and they give you 5.1% you probably don't want to change that $600k part of your $760K resources. The rest are in stocks, bonds and real estate stocks. Sounds like some diversification there. Depends on how many different stocks and bonds but not bad in itself. If you like your holdings the beat way to ad some diversification is to put new money into an appropriate mutual fund or stocks/bonds of different asset classes. An easy way to get some diversification is to just get something like a Vanguard market index fund.
But it seems like you are starting from a decent place asset wise. IMHO no need to liquidate unless you do not like some of your holdings.
As to working part time, totaly your call. Some people want to do that if they really like their field of work. If you *have* to work and don't like it then I suppose part time is better than full time.
The biggest driver in your case may be medical coverage. Maybe a reason to work? Or at lest get a plan around this issue before settling on whether $32K a year or some amount more is necesary for retirement.