Allocation and Investments

[escape_velocity]

I'd love some advice about my allocations and investments.

I'm 45 years old and want to retire in 10 years (at 55).

My current investment securities are:

* Taxable Brokerage Account: ~$5 million

60% stocks / 40% bonds.

US Stocks: VTI, ITOT (50% of stocks)
Int'l Stocks: IXUS, VXUS (50% of stocks)
Municipal Bonds: VWAHX, VWITX, and MUB

* Tax-Advantaged Accounts: ~$750,000

100% stocks

S&P 500 Index Funds (VOO, IVV)

I expect to have spending needs about $250,000+ at that time (2027), although in reality, it will be much lower (my current annual spend is $150,000 and my expenses would drop by a minimum of $40,000).

I also expect to add ~$1MM annually to these accounts until then (2027) and will slowly rebalance to 50% stocks / 50% bonds overall.

Any suggestions?

 

[FlaGator]

No.

looks like you're fine with the current plan.

If history holds, your $5.75 million will about double in 10 years. If spending drops as you expect, your heirs will be happy.

 

[shortstop14]

Adopt me?

I'd have to really love my job to keep working in your situation.

 

[escape_velocity]

Thanks to you both. I do love my job, but I also love my kids and want to put them through college, etc., and because of the kids, cannot run off just yet to do what I really want to do (sailing!!). Thanks again for the kind thoughts ... it may seem obvious to others, but I always doubt myself . . . confident, but never cocky.

 

[shortstop14]

With your trajectory, you've got a lot of options to build whatever you want. There are some here at your asset level that can provide some good strategic advice. Based on your projected spending level, you shouldn't have to carry a lot of risk.

 

[Whisper66]

Thanks to you both. I do love my job, but I also love my kids and want to put them through college, etc., and because of the kids, cannot run off just yet to do what I really want to do (sailing!!)..

I think you are underestimating what $5.7 million can support. I'm glad you love your job, cause you certainly don't need to keep working for the money.

Asset allocation - seems fine, good tax efficiency, typical conservative allocation.

An alternate viewpoint - With such a high value portfolio, I personally wouldn't have such a high % of fixed assets. In the event of a market downturn, you have $2M in fixed assets to ride it out. At $200k burn rate a year, you could wait out any market downturn for 10 yrs without having to sell any equities. At a $150k burn rate, it's 13 yrs. Most downturns only last 3-5 yrs. I guess if you are happy with the fixed asset return, it's fine. I personally would probably have only 30% or maybe 20% fixed in your situation. Just depends on how conservative you wish to be I suppose.

 

[Scuba]

I think you are underestimating what $5.7 million can support. I'm glad you love your job, cause you certainly don't need to keep working for the money.

Asset allocation - seems fine, good tax efficiency, typical conservative allocation.

An alternate viewpoint - With such a high value portfolio, I personally wouldn't have such a high % of fixed assets. In the event of a market downturn, you have $2M in fixed assets to ride it out. At $200k burn rate a year, you could wait out any market downturn for 10 yrs without having to sell any equities. At a $150k burn rate, it's 13 yrs. Most downturns only last 3-5 yrs. I guess if you are happy with the fixed asset return, it's fine. I personally would probably have only 30% or maybe 20% fixed in your situation. Just depends on how conservative you wish to be I suppose.[/

+1

 

[audreyh1]

An alternate viewpoint - With such a high value portfolio, I personally wouldn't have such a high % of fixed assets. In the event of a market downturn, you have $2M in fixed assets to ride it out. At $200k burn rate a year, you could wait out any market downturn for 10 yrs without having to sell any equities. At a $150k burn rate, it's 13 yrs. Most downturns only last 3-5 yrs. I guess if you are happy with the fixed asset return, it's fine. I personally would probably have only 30% or maybe 20% fixed in your situation. Just depends on how conservative you wish to be I suppose.

I just wanted to point out that only part of that $2M fixed income would be available for surviving down years - and not 10 years worth at $200K per year. A chunk of it would be used for rebalancing. Fixed income in a portfolio is used both for rebalancing (buying more stocks when they are low) and simultaneously drawn from for annual income during down years. So you want some cushion to support both.

 

[brokrken]

I agree with most of the comments here, you seem in good shape. The only thing I would add is I hope you have a good estate plan in place. As some have mentioned here, in 10 years, with market returns plus the 1mln you are adding per year, your heirs could have some issues if you get hit by a truck.

 

[escape_velocity]

I appreciate all the thoughts and comments.

I'll sleep better now.

 

[Blue Collar Guy]

you have accumulated a ton of dough. just keep doing what your doing, your in the top 5 % of the country