Desperately needing advice

[CoolRich59]

I am serious, not being flippant. I majored (undergrad) in journalism. Today, I am very glad I did not go to work in that field. Unfortunately, today's so-called "news" outlets are so desperate for advertising revenue, they will say anything to keep people watching and listening. They have found that the best way to do that is to appeal to people's emotions, usually the bad emotions (fear, hatred, insecurity).

Absolutely. The old saying "If it bleeds, it leads" applies to departments other than the news desk.

 

[MRG]

So here is the magical advice.... in your IRAs and taxable accounts... move it all to Vanguard and invest it in Wellington... a ~60/40 managed fund with a solid track record and reinvest all dividends.... same thing with new money... and let it alone.

No tax problems investing that $100k in Wellington either other than dividends of probably $2-3k a year and much of those will be qualified dividends and taxed at a lower rate than your earnings from working.

+1

Such an easy fix! No EDJ required!

 

[Midpack]

I am hoping someone can give me some guidance in saving and investing for retirement. I am not very educated with investing and have major trust issues with my money in other people’s hands.

I have not had very much success in saving money in employer 401K's and simple IRA's as about every 8 to 10 years in my working life, market crashes and recessions have taken large portions of my savings go poof. I was never able to save much early in life due to various reasons and now I am 51 and very worried about being able to retire.

I must come clean in regards to my knowledge of the market, I know quite a bit about making dumb mistakes, bad choices and illogical hunches on when and what to buy and sell, oh, and my favorite bit of knowledge I possess is panic and selling, after the bottom has fallen out.

I know the track I have been on for the last 8 years is not going to get me where I need to be and I have lots of ground to make up. I guess what I was hoping for by posting here was someone would have some magical advice of hey, been there done that, you need to put money here on x,y and z, let it ride and don't worry about the market roller coaster, and for x amount of investment you should make about y ( please do not suggest an annuity to me).

As many knew from your first post, and have already noted - sadly you’re unsatisfactory investing results are due to your impulses, not market ups and downs. You made the same mistake most people make if they don’t understand long term market behavior, you’re not unusual.

You don’t lose money in down markets unless you sell. Many of us here rode the market down in 2008, and it was painful and scary, but we didn’t sell and some even bought more equities. Markets are up about 3X now from the 2008 bottom, you didn’t have to lose, you would be way ahead if you’d just held broad equity market index funds and done nothing during the financial meltdown...

Much of your discussion has centered on where to invest and what to hold. But if you can’t learn to stay the course in downturns, where your money is and what it WAS invested in won’t matter. There have always been up and down markets, and history says there always will be. Every time people say this time is different, and it never has been yet.

Putting all your money in savings is fine when you’re 90 and protecting your assets, but you’ll never make up ground using savings, CD’s and the like. Savings is the equivalent of treading water, you’ll be lucky to even keep up with inflation.

Reading a lot about market behavior from Bogle, Bernstein and the like makes it easier to endure down markets. I’d start there. And then invest simply with a moderate AA, rebalance as needed OR a balanced fund that does it all for you - and leave the money alone in good times and bad. Financial advisors are not popular here because they extract high fees, but if you can’t resist selling when the going gets tough, you might benefit from having a pro talking you off the (selling) ledge.

Best of luck, we’re here to offer suggestions on how to win at long term investing. You won’t find get rich quick philosophies here. You don’t have to be a rocket scientist to invest successfully, but it does take some knowledge and inner strength.

 

[omni550]

So here is the magical advice.... in your IRAs and taxable accounts... move it all to Vanguard and invest it in Wellington... a ~60/40 managed fund with a solid track record and reinvest all dividends.... same thing with new money... and let it alone.

No tax problems investing that $100k in Wellington either other than dividends of probably $2-3k a year and much of those will be qualified dividends and taxed at a lower rate than your earnings from working.

+1

KISS (Keep it simple, saver.) Set it and forget it. Ignore the fear-mongering media.

omni

 

[97guns]

Pretty sure I’ll get slammed for my response but If it was my portfolio at the age I would look for better yield in real estate, its what has worked for me, I would take a look at real estate crowdfunding with 10-12% yields

I would feel my net worth would be in need of a jumpstart and that would need to take on some risk, definitely not CD type of risk

 

[Yarnstormer]

If I were you I’d get a vanguard account, invest a good portion of your cash in index funds, some in a target date fund and just keep contributing. Be sure to set it to reinvest dividends. Because of your discomfort with risk, leave a generous buffer in cash or cds. Most important, don’t try to pick individual stocks, and don’t sell. Try not to check too often.

 

[Sunset]

OP - Best thing you can do is give control of all the investments and bank accounts to your wife, and then ignore what she does.
She will do better than you at investing, and cannot do worse.

 

[purplesky]

I am hoping someone can give me some guidance in saving and investing for retirement. I am not very educated with investing and have major trust issues with my money in other people’s hands.

I have not had very much success in saving money in employer 401K's and simple IRA's as about every 8 to 10 years in my working life, market crashes and recessions have taken large portions of my savings go poof. I was never able to save much early in life due to various reasons and now I am 51 and very worried about being able to retire.

I currently have an employer sponsored simple IRA that matches 50 cents per dollar up to 3% with of all places Edward Jones. The current balance is 58K and is invested very conservatively. I am currently making the maximum contribution of 15,500 annually to this plan.

I also have a pension (I think) thru the union I once was in at prudential that has a balance of 26K, no contribution are being made.

I also have (2) 401K's with 18k and 3k balances, that are partially invested, the 18K 401K has 9k invested in PONDX the remaning balance is sitting in cash.

And lastly here is the 900lb gorilla, I have 183K sitting in a savings account making me a whopping .005%

Between my disabled wife and I we currently make 140K a year and are putting 30K a year in our savings account along with the 15.5K going into my simple IRA.

As I stated in the beginning of my topic, I have major trust issues with investment firms and money managers, seems all my investing life, I have been ripped off and lied to many times and with the market crashes and recessions, I have lost a fair amount of money to warrant my feelings.

I would like to retire at 62 if I can, I think I can pull this off if I don’t have any more 40 to 60 % losses along the way, but I need some guidance in what I should do and where I should put my money that will be safe from losing my principle and make a decent return.

It’s looking like between my wife and I, we will make about 31k from SS, and I think we will need about 75k a year in retirement to live ok, so with simple math, anyone can see, I have a problem.

You have great income so you definitely have the ability to catch up your retirement investments.

You are not going to find your solution here or on any website to get comfortable about putting money in the stock market.

Do you have a Fidelity or Charles Schwab office in your city?

You need a financial advisor. Yesterday. ONLY Use Fidelity ,Schwab, or Vanguard.

They will not rip you off.

Go to a office location or work with them by phone.

 

[pb4uski]

^^^^ not a bad idea as a FA can provide handholding.... a friend of mine who is a FA says that is a big part of his job.

 

[retired1]

No need to panic. Seems that you have a good plan and you need to be diligent about saving and keep the end-goal in sight. Do Not go to any experts... you learn/do yourself by reading online. ups & downs are part of life. Resist the temptation to sell during downturn. I find that having enough money (1 yr minimum) in CDs/Bank keeps my nerves in check

 

[RunningBum]

I'd like to hear more details on the "getting ripped off" comment in post 1.

 

[brucethebroker]

Thank you for the reply's and the advice thus far.

I know the track I have been on for the last 8 years is not going to get me where I need to be and I have lots of ground to make up. I guess what I was hoping for by posting here was someone would have some magical advice of hey, been there done that, you need to put money here on x,y and z, let it ride and don't worry about the market roller coaster, and for x amount of investment you should make about y ( please do not suggest an annuity to me).

I do have some ideas of what to put my money in, from lurking around this forum and others a bit, but what I am not sure of is the following, and please correct me if I am wrong.

Keep lurking. In a couple of years, you will realize how really funny your "please do not suggest an annuity to me" really is!

Seriously, keep saving, keep reading, keep checking in.

 

[AndyS]

..... I am 51

.... simple IRA .... current balance is 58K

..... pension ..... balance of 26K

..... 401K's ..... 18k and 3k balances

..... 183K....savings account

...... disabled wife

.... we currently make 140K a year

..... I would like to retire at 62

.... we will make about 31k from SS,

.... we will need about 75k a year in retirement

Hope you don't mind ... I kind of took some of the "noise" out of your OP & just broke it down to the pertinent facts.

Current retirement monies:
Simple IRA 58k
Pension fund balance: 26k
401k's: 21k

Savings: 183k
Total: 283k

Current Income: 140k
Years to desired retirement: 11
Expected SS income: 31k
Desired retirement income: 75k (-31k SS = 44k needed)


Well, you don't mention some other important factors such as:

• current mortgage debt,
• other debt
• current living expenses (how much are you spending now)
• anticipated large future medical expenses (you say your wife is "disabled"?)
• possible future college or other expenses you'd like to pay for any kids
• income security for the next 11 years on that 140k a year you currently earn

What's your plan to pay for health care after age 62 though?

Point being, it kind of depends some of the other factors I mentioned above.

(Also ... any way you can get that 26k out of that defunct union pension fund and put it in some other retirement tax-advantaged vehicle that you control? How much interest are you earning on that where it is?)

 

[UnrealizedPotential]

I think the OP has a trust issue of which the cause to me at least is uncertain. Maybe the OP needs to see someone about his trust issues so he can get to a better place before doing anything further.

This is just a suggestion. It might be good, it might be bad. It's something to consider. Fear of anything can be dangerous because it often leads to inaction.

 

[Badger]

I currently have an employer sponsored simple IRA that matches 50 cents per dollar up to 3% with of all places Edward Jones. The current balance is 58K and is invested very conservatively. I am currently making the maximum contribution of 15,500 annually to this plan.

I don't have experience with EJ but years ago my wife's only choice for 403b was either one of many annuities or Merrill Lynch. You may want to get some feedback from past posts. I don't care for either business. We had no other choice but ML and ignored the reps suggestions for loaded mutual funds as well as having him move the money around as he saw fit (that sounded like a good way to lose her retirement money) and instead put the money in a money market account. Then about 2 or 3 times a year had the money moved to a no load mutual fund with Vanguard. ML tried to convince us it could not be done but evidently that was not the case. It was extra work on my part but the money eventually was invested in a good fund family and a good fund.

Cheers!

 

[nash031]

IMO OP expressed two psychological issues affecting investment performance:

(1) Severe aversion to risk and paper losses.
(2) Letting perfect be the enemy of good enough.

(1) by itself is not uncommon and can be overcome either with financial assistance to keep you on course when you're tempted to sell out during the next inevitable market dip, or by changing your allocation to be something that won't fall as much when the market crashes.

(2) when combined with (1) is really crippling. OP is struggling to make moves because he's afraid of the opportunity cost of locking in a certain CD rate, for example, which might get a little bit better if he just waits. The problem is, OP is wasting time waiting for an action over which he has control, and is continually losing money to inflation. Especially with his relatively short time horizon to retirement, staying in cash when OP needs to be generating some return is hazardous to his retirement health.

My recommendation would be to put some of that savings into a CD and forget about future rates because you're killing yourself sitting in cash this late in the game. Trying to play perfection in an imperfect game is crippling your ability to retire, IMO, particularly when combined with severe risk aversion.

 

[Ranman]

Hope you don't mind ... I kind of took some of the "noise" out of your OP & just broke it down to the pertinent facts.

Current retirement monies:
Simple IRA 58k
Pension fund balance: 26k
401k's: 21k

Savings: 183k
Total: 283k

Current Income: 140k
Years to desired retirement: 11
Expected SS income: 31k
Desired retirement income: 75k (-31k SS = 44k needed)


Well, you don't mention some other important factors such as:

• current mortgage debt,
• other debt
• current living expenses (how much are you spending now)
• anticipated large future medical expenses (you say your wife is "disabled"?)
• possible future college or other expenses you'd like to pay for any kids
• income security for the next 11 years on that 140k a year you currently earn

What's your plan to pay for health care after age 62 though?

Point being, it kind of depends some of the other factors I mentioned above.

(Also ... any way you can get that 26k out of that defunct union pension fund and put it in some other retirement tax-advantaged vehicle that you control? How much interest are you earning on that where it is?)

My mortgage has been paid off for 6 years now
no car loans no credit card debt or any other debts
living expenses and utilities run around 4 to 4.5k a month, and are expected to lower some in retirement.
no kids
job is a secure as it can be unless something goes south


I'm not sure yet about medical insurance for me between the ages of 62/65 but my wife is on medicare already so she is covered.

I have not looked into moving the money from my IBEW IO pension, not sure I can, but it's currently making 15.6% return between its allocations.

I would expect our medical expense to be our biggest hurdle in retirement, I have been calculating our future expenses at 500 a month for medical, but that might be to low.

I have the possibility of leasing my Master Electrical license after retirement for a possible 500 to 1k a month, but that's still an unknown at this point and is not being calculated into my retirement scenarios.

 

[purplesky]

So here is the magical advice.... in your IRAs and taxable accounts... move it all to Vanguard and invest it in Wellington... a ~60/40 managed fund with a solid track record and reinvest all dividends.... same thing with new money... and let it alone.

No tax problems investing that $100k in Wellington either other than dividends of probably $2-3k a year and much of those will be qualified dividends and taxed at a lower rate than your earnings from working.

^^^ Hey OP this is your magical advice right here! You cannot go wrong with Wellington. This is a long term plan you should execute today and for your last 10 years of working you will build principle that will produce income in retirement for you and your wife.

After you move your current cash into Wellington start dollar cost averaging your savings into this Wellington fund.

Just remember if and when we experience a major market correction you will be buying low with your dollar cost averaging.

Have a bucket of cash available and DO NOT touch the Wellington fund because the market always recovers.

 

[indiajust]

Rollover 401k's and pension into an IRA. Keep at least a year in cash and put the rest into a brokerage acct. Read the work less live more as an allocation idea, but follow a simplified approach of ETF's/mutual funds since I suspect you have no interest in stock picking. Vanguard and Schwab have the lowest fee structures.

Once the dust settles, run the FIREcalc and see where you stand.

Might take a few months for the transactions, but the paperwork and decisions can be done in a weekend or two.

 

[Ranman]

^^^ Hey OP this is your magical advice right here! You cannot go wrong with Wellington. This is a long term plan you should execute today and for your last 10 years of working you will build principle that will produce income in retirement for you and your wife.

After you move your current cash into Wellington start dollar cost averaging your savings into this Wellington fund.

Just remember if and when we experience a major market correction you will be buying low with your dollar cost averaging.

Have a bucket of cash available and DO NOT touch the Wellington fund because the market always recovers.

Wellington VWELX is closed to new investors - any other suggestions?

 

[pb4uski]

Wellington VWELX is closed to new investors - any other suggestions?

It is not closed if you buy it directly from Vanguard.

 

[UnrealizedPotential]

It is not closed if you buy it directly from Vanguard.

I didn't know that. I learned something. Awesome.

 

[Ranman]

Hmm, I already have 2 IRA accounts with Scottrade... was thinking I would just keep these accounts and open a taxable account there, just to keep it simple. Or should I open accounts at Vanguard and roll these IRA's over?

 

[Gumby]

If you are going to continue contributing on a regular basis, open a Vanguard account. There are no commissions when you buy more.

 

[purplesky]

If you are going to continue contributing on a regular basis, open a Vanguard account. There are no commissions when you buy more.

^^^ Go for it! Dollar cost avg. into Wellington with your new Vanguard account.

You will be very happy in 11 years when you to retire.

Just remember to leave this account alone during market corrections or selloffs.