Well, last post I had was called "39 and thinking" Lots of things have happened since then. I was unemployed till September of 2010 (about 16 months) I was living on 600/month plus income from one of my rentals. It was easy living! I had plenty of money coming in to pay bills, have fun, and still had some left over! In September I got a call from my old company and they needed some contract help, so I am back at work about 1/3 time. This still pays all my bills and then some.
In the 39 and thinking post I was considering pulling the plug then and there. I since that post sold the house 1/2 owned with my sibling. I'm working on setting up a portfolio that is ready to kick in should work dry up again and I decide to retire. While i'm working I'll be adding a bit to it here and there as well...
So Just for kicks, here is an incredibly simple portfolio I am considering. If anyone wants to comment I'd love to hear it, and I'd also like to know if anyone's portfolio mimicks something like this. Here it is:
Assume a 750k portfolio and a 50 year payout
70/30 stock/bond/cash mix
750 * 0.3 = 225k in cash/bonds
750k - 225k = 525k stock funds
475k in S&P 500/total stock market fund
50k in global/emerging markets high risk own picks etc. (appx 10%)
assume 30k/year for living expenses
5 years living expenses in a ladder or decent interest bearing cash vehicle
5 * 30k = 150k for 5 years living expenses in some laddered investments or anything with decent interest rate
225k - 150k(from 5 yr ladder) = 75k to be put into bond fund
Other information:
Firecalc gives me 100% survival rating even when no SS is assumed and interest rate is at 4%
I have a paid off house that I rent out which nets me about $6000/yr, house value is about 130k.
This will eventually be sold and proceeds added to portfolio.
I own half of a 2 family which flows cash but all monies are currently reinvested to fix it up.
Current value of 2 family is about 160k. Balance of loan is 140k and loan matures in 25 yrs.
This would either be sold eventually and proceeds added to the portfolio, or once paid off use
the rents to lower withdrawals from portfolio
The house I live in I owe 130k on and is worth about 250-270k. I could sell this house
and buy a nice house for about 150-170k loan free with lower taxes.
I would only do this if my work dried up.
In my current house, I would need to withdraw 26k annually, so I have 4k wiggle room
If I were to sell this house and buy the cheaper one, I would have to withdraw about 20k/annually so I would have
about 10k wiggle room
I plan on adding modestly to my portfolio while I contract part time, and not withdrawing anything from it unless work dries up.
Questions:
Is this a reasonable allocation for the cash portion given the real estate holdings?
Is this in general how some people are structuring their portfolios during deaccumulation phase?
Where do I park the 150k living expenses where i get a decent interest rate? CDs are terrible now?
Any other comments?
In the 39 and thinking post I was considering pulling the plug then and there. I since that post sold the house 1/2 owned with my sibling. I'm working on setting up a portfolio that is ready to kick in should work dry up again and I decide to retire. While i'm working I'll be adding a bit to it here and there as well...
So Just for kicks, here is an incredibly simple portfolio I am considering. If anyone wants to comment I'd love to hear it, and I'd also like to know if anyone's portfolio mimicks something like this. Here it is:
Assume a 750k portfolio and a 50 year payout
70/30 stock/bond/cash mix
750 * 0.3 = 225k in cash/bonds
750k - 225k = 525k stock funds
475k in S&P 500/total stock market fund
50k in global/emerging markets high risk own picks etc. (appx 10%)
assume 30k/year for living expenses
5 years living expenses in a ladder or decent interest bearing cash vehicle
5 * 30k = 150k for 5 years living expenses in some laddered investments or anything with decent interest rate
225k - 150k(from 5 yr ladder) = 75k to be put into bond fund
Other information:
Firecalc gives me 100% survival rating even when no SS is assumed and interest rate is at 4%
I have a paid off house that I rent out which nets me about $6000/yr, house value is about 130k.
This will eventually be sold and proceeds added to portfolio.
I own half of a 2 family which flows cash but all monies are currently reinvested to fix it up.
Current value of 2 family is about 160k. Balance of loan is 140k and loan matures in 25 yrs.
This would either be sold eventually and proceeds added to the portfolio, or once paid off use
the rents to lower withdrawals from portfolio
The house I live in I owe 130k on and is worth about 250-270k. I could sell this house
and buy a nice house for about 150-170k loan free with lower taxes.
I would only do this if my work dried up.
In my current house, I would need to withdraw 26k annually, so I have 4k wiggle room
If I were to sell this house and buy the cheaper one, I would have to withdraw about 20k/annually so I would have
about 10k wiggle room
I plan on adding modestly to my portfolio while I contract part time, and not withdrawing anything from it unless work dries up.
Questions:
Is this a reasonable allocation for the cash portion given the real estate holdings?
Is this in general how some people are structuring their portfolios during deaccumulation phase?
Where do I park the 150k living expenses where i get a decent interest rate? CDs are terrible now?
Any other comments?