I am finally ready to tackle the task of possibly reallocating our retirement account assets -- I have had my head in the sand about this for eight years, more or less just coasting along and not really thinking strategically about it.
Basic scenario is this:
1. DH is 49, I will soon be 39. We have a low seven figure NW, with over 60% of it in liquid assets. The large liquid asset stockpile is there because we would like to buy housing in a fairly expensive city within the next 6-12 months. We also want large cash reserves to cover living expenses and possible business start-up expenses in the event that I do not go back to mainstream employment.
2. I took an extended leave from my job earlier this year, and will most likely not go back. Still trying to figure out if I will look for another regular position, try to get into consulting, or do something else to earn basic living expenses. DH is continuing to work and I think will probably do so for at least a few more years -- he is very uncomfortable taking the leap into ER for social/psychological as well as financial reasons. But I would guess he would be ready to step back from work a bit in 5 years or so. I will probably take more of a ESR approach, as there are things I still want to accomplish professionally and personally. We are open to doing 72t distributions, but most likely will try to avoid it. We are not counting on social security, but wouldn't object to a check if the gvt. is still sending them out by the time we get to that age.
3. We currently have about 322k in retirement assets. These are mostly in Vanguard and American Funds (the only option offered by our employer-sponsored plan), along with a small IRA at our credit union. The funds are currently allocated as follows (percentage of holdings in brackets):
VFINX $15,098.26 (4.68%)
VTSMX $47,206.27 (14.62%)
VGTSX $5,262.90 (1.63%)
CU IRA $5,326.04 (1.65%)
AWSHX $87,373.19 (27.06%)
AEPGX $28,342.64 (8.78%)
ANWPX $62,490.65 (19.35%)
AIVSX $30,634.58 (9.49%)
AGTHX $41,157.22 (12.75%)
The American Funds are all in 403b accounts. VFINX and VTSMX are in Roth IRAs. VGTSX is in a traditional Rollover IRA I opened this year (cashed out of Domini, which I was unhappy with).
Of the 403b funds, AEPGX has given us the best returns, followed by ANWPX, AGTHX, AIVSX and with AWSHX at the bottom.
I don't want to invest retirement monies in bonds/bond funds for the time being as we have so much in liquid assets already.
The credit union IRA needs to be moved -- been too lazy to do anything about it so far.
4. Reallocation questions
a. I find it really hard to know how to split up the American Funds money, as their funds do not fit nicely into standard categories. I know I have too much overlap now (between Growth and Investment Co. of A, for example), and perhaps too heavily weighted toward more volatile sectors (international, growth) though Wash Mut does balance things out a bit). Any suggestions for how to reallocate within the AF family so that we have a better balance?
b. I have considered rolling my AF accounts over to Vanguard, but seems that the standard thinking seems to be that once you have AF it is ok to stick with them, as the fees have already been paid (ours were purchased at a reduced charge, FWIW, as our employer has her substantial trust fund invested with them along with the organization's retirement accounts). But I much prefer Vanguard to American (had an argument with the investment plan advisor on our first meeting about the superiority of index funds to managed funds...). Any advice? Stay with AF or move to Vanguard?
c. What about the allocation of the Vanguard funds -- should I tweak with that somewhat?
Would greatly appreciate any advice and suggestions. Please be gentle...
lhamo
Basic scenario is this:
1. DH is 49, I will soon be 39. We have a low seven figure NW, with over 60% of it in liquid assets. The large liquid asset stockpile is there because we would like to buy housing in a fairly expensive city within the next 6-12 months. We also want large cash reserves to cover living expenses and possible business start-up expenses in the event that I do not go back to mainstream employment.
2. I took an extended leave from my job earlier this year, and will most likely not go back. Still trying to figure out if I will look for another regular position, try to get into consulting, or do something else to earn basic living expenses. DH is continuing to work and I think will probably do so for at least a few more years -- he is very uncomfortable taking the leap into ER for social/psychological as well as financial reasons. But I would guess he would be ready to step back from work a bit in 5 years or so. I will probably take more of a ESR approach, as there are things I still want to accomplish professionally and personally. We are open to doing 72t distributions, but most likely will try to avoid it. We are not counting on social security, but wouldn't object to a check if the gvt. is still sending them out by the time we get to that age.
3. We currently have about 322k in retirement assets. These are mostly in Vanguard and American Funds (the only option offered by our employer-sponsored plan), along with a small IRA at our credit union. The funds are currently allocated as follows (percentage of holdings in brackets):
VFINX $15,098.26 (4.68%)
VTSMX $47,206.27 (14.62%)
VGTSX $5,262.90 (1.63%)
CU IRA $5,326.04 (1.65%)
AWSHX $87,373.19 (27.06%)
AEPGX $28,342.64 (8.78%)
ANWPX $62,490.65 (19.35%)
AIVSX $30,634.58 (9.49%)
AGTHX $41,157.22 (12.75%)
The American Funds are all in 403b accounts. VFINX and VTSMX are in Roth IRAs. VGTSX is in a traditional Rollover IRA I opened this year (cashed out of Domini, which I was unhappy with).
Of the 403b funds, AEPGX has given us the best returns, followed by ANWPX, AGTHX, AIVSX and with AWSHX at the bottom.
I don't want to invest retirement monies in bonds/bond funds for the time being as we have so much in liquid assets already.
The credit union IRA needs to be moved -- been too lazy to do anything about it so far.
4. Reallocation questions
a. I find it really hard to know how to split up the American Funds money, as their funds do not fit nicely into standard categories. I know I have too much overlap now (between Growth and Investment Co. of A, for example), and perhaps too heavily weighted toward more volatile sectors (international, growth) though Wash Mut does balance things out a bit). Any suggestions for how to reallocate within the AF family so that we have a better balance?
b. I have considered rolling my AF accounts over to Vanguard, but seems that the standard thinking seems to be that once you have AF it is ok to stick with them, as the fees have already been paid (ours were purchased at a reduced charge, FWIW, as our employer has her substantial trust fund invested with them along with the organization's retirement accounts). But I much prefer Vanguard to American (had an argument with the investment plan advisor on our first meeting about the superiority of index funds to managed funds...). Any advice? Stay with AF or move to Vanguard?
c. What about the allocation of the Vanguard funds -- should I tweak with that somewhat?
Would greatly appreciate any advice and suggestions. Please be gentle...
lhamo