Did she go to the obgyn school of investing?

[redduck]

It has occurred to me that it might be a very good idea to present my wife’s financial situation in hopes of receiving some feedback, ideas, and direction that could applied to her investments.
(Actually, we are not legally married, but have been living together for 26 years. It's just easier and quicker to say "married" than to say anything else. And, saying "married" works great when you're in the emergency room).

Worked for 20 years as an elementary school teacher: retired 7 years ago.
69 years old
No debt, house paid for. Car has 23, 000 miles. Has Medicare. Has me.

Spent: $36,287.37 (From June 30, 2012 to June 30, 2013).

Here’s what else she has:

Pension $2600 per month
Social Security: $130 per month

Vanguard Individual Acct.

VMFXX: Fed. MM account: $6500
VFIIX: GMNA: $38,000
VGHCX: Health Care Fund: $13000
VIPSX: Tips Fund: $5000
VFISX: S-T Treasury $13,000

Anyway, Vanguard Total comes to about $76,000

++++
Vanguard: IRA Acct

VTINX: Target Retirement Income Acct. (This was originally the Target Date 2005 Fund but morphed into the Target Retirement Income Fund).
This fund fund’s value: $440,000

According to Vanguard Asset Mix: 27.7% stocks; 66.7% bonds; 5.6% short-term reserves.
+++

Scottrade Roth IRA acct:

DODIX: Dodge & Cox Income Fund: $8,5000
VFIIX: Van GNMA Fund: $8,000

Fidelity:

IRA ACCT:

Money Market Fund: $98,000 (this was a CD that was paying 5% for many years, but finally came due).

So, she has been conservative and that won’t be changing any time soon. However, she is willing to make some changes in the make-up of her portfolio. And, I’m beginning to feeling a bit guilty about charging her two percent of assets under management, plus 20% of the profits (I’ve been lying about the profits for the last few years) plus a .25% fee for office supplies.

Where do we go from here?

[pb4uski]

Psst.....

She could put everything in Wellesley which had a greater than 3% distribution yield and a 2.66% SEC yield and have more than what she needs.

My only question is why do you look at her separately? I suspect there is a good reason.

I would condense accounts so there are less accounts to deal with unless there is some good reason for their being separate.

P.S. I can't see obgyn ever having such a risky portfolio. Dodge & Cox? surely you jest!

[REWahoo]

Quote:

Originally Posted by redduck Where do we go from here?

Raise your fees...

[NYEXPAT]

I would charge my Wife as well, but then I would have to pay income tax and that was the whole point of transferring the wealth to begin with!

[KingB]

Quote:

Originally Posted by redduck Has me.

Is this an asset or a liability?

[ERD50]

Questions:

Is that pension COLA'd?
How safe is that pension?
Is she happy with ~ $36-37K spending? Would she like to spend more, or any big recurring expenses to consider? If a new car in 10 years might cost $20K, that's $2K/year to set aside, etc...

If the pension is COLA'd, and let's just bump the spend up to $40,000 for round numbers, she only needs ~ $8K after pension/SS. Total accounts ~ $630K, that's just 1.3% WR. Just about any AA can handle that WR. The divs on that VTINX are 1.68%. That alone just about gets her there.

I don't see any reason to make any big changes, that VTINX is ~ 30% Equities, and that's fine for that WR. The $100,000 in MM could be moved to the VTINX or Wellesley, or maybe start moving several of these smaller things to Wellesley. But unless she wants to spend much more, or have a better chance (historically) of leaving a larger pile of $$$ to heirs/charities, no big deal that I can see.

Quote:

Originally Posted by pb4uski P.S. I can't see obgyn ever having such a risky portfolio. Dodge & Cox? surely you jest!

I thought he was below 1% equities - not even in the ballpark of the OP situation. Nothing 'wrong' with very low EQ AA, but one should be aware that historically it means keeping a very low WR, and the longer the retirement the lower the WR to needs to go, due to inflation.

-ERD50

[Major Tom]

Quote:

Originally Posted by ERD50 I thought he was below 1% equities - not even in the ballpark of the OP situation. Nothing 'wrong' with very low EQ AA, but one should be aware that historically it means keeping a very low WR, and the longer the retirement the lower the WR to needs to go, due to inflation. -ERD50

He just stated in the "Opinions On SWR" thread that his planned WR was 3 to 3.5% which confuses me. I seem to remember an explanation from him on this before, but it obviously didn't get into my thick skull, as I'm still trying to figure out how someone with an exposure to equities of only about 1% (with the rest being in cash or fixed income) can hope to sustain such a WR.

Obgyn - if you're reading this, I'm honestly trying not to make trouble, as I know this has been a subject of discussion before, but I can't quite figure out how you're going to pull this off.

[FinanceDude]

Quote:

Originally Posted by redduck It has occurred to me that it might be a very good idea to present my wife’s financial situation in hopes of receiving some feedback, ideas, and direction that could applied to her investments. (Actually, we are not legally married, but have been living together for 26 years. It's just easier and quicker to say "married" than to say anything else. And, saying "married" works great when you're in the emergency room). Worked for 20 years as an elementary school teacher: retired 7 years ago. 69 years old No debt, house paid for. Car has 23, 000 miles. Has Medicare. Has me. Spent: $36,287.37 (From June 30, 2012 to June 30, 2013). Here’s what else she has: Pension $2600 per month Social Security: $130 per month Vanguard Individual Acct. VMFXX: Fed. MM account: $6500 VFIIX: GMNA: $38,000 VGHCX: Health Care Fund: $13000 VIPSX: Tips Fund: $5000 VFISX: S-T Treasury $13,000 Anyway, Vanguard Total comes to about $76,000 ++++ Vanguard: IRA Acct VTINX: Target Retirement Income Acct. (This was originally the Target Date 2005 Fund but morphed into the Target Retirement Income Fund). This fund fund’s value: $440,000 According to Vanguard Asset Mix: 27.7% stocks; 66.7% bonds; 5.6% short-term reserves. +++ Scottrade Roth IRA acct: DODIX: Dodge & Cox Income Fund: $8,5000 VFIIX: Van GNMA Fund: $8,000 Fidelity: IRA ACCT: Money Market Fund: $98,000 (this was a CD that was paying 5% for many years, but finally came due). So, she has been conservative and that won’t be changing any time soon. However, she is willing to make some changes in the make-up of her portfolio. And, I’m beginning to feeling a bit guilty about charging her two percent of assets under management, plus 20% of the profits (I’ve been lying about the profits for the last few years) plus a .25% fee for office supplies. Where do we go from here?

Are you serious about the fees? You must be joking........

[steelyman]

Is she tormented? If not, she's probably safe (and the portfolio seems fine for that age group).

[MichaelB]

Quote:

Originally Posted by redduck Where do we go from here?

More cowbell

I've Got A Fever... - YouTube

[obgyn65]

All I said is that at the moment, my FIRE spreadsheet assumes about 3 or 3.5% SWR, and this number is likely to continue to change in the future. Additionally, it is correct to say that I could live on less than 3-3.5% SWR. Yes, i am financially independent. I no longer think it is a good idea to share absolute expense, nest egg and budget numbers - since some people around here got quite upset recently about this - so I will let you play around with your calculators (if you feel like it :-) ) and guess my likely minimal, optimal and maximal expenses and their associated SWR levels.

I also found out that buying deferred annuities while still in my 40s and buying SPIAs in my 70s is better than sticking to CDs and munis mainly. These findings may also change in the future, as rates and remaining life expectancy change. This works for me and of course does not mean will work for everyone else.

Quote:

Originally Posted by Major Tom He just stated in the "Opinions On SWR" thread that his planned WR was 3 to 3.5% which confuses me. I seem to remember an explanation from him on this before, but it obviously didn't get into my thick skull, as I'm still trying to figure out how someone with an exposure to equities of only about 1% (with the rest being in cash or fixed income) can hope to sustain such a WR. Obgyn - if you're reading this, I'm honestly trying not to make trouble, as I know this has been a subject of discussion before, but I can't quite figure out how you're going to pull this off.

[obgyn65]

First, I would be honest with my partner and not lie to her. Second, I would never charge her for financial advice or service. And third, I would let her do what she is comfortable with financially - it is her money, not yours.

Quote:

Originally Posted by redduck Where do we go from here?

[Bestwifeever]

Thank goodness she can use the $130/month SS to pad the budget!

[aja8888]

Quote:

Originally Posted by obgyn65 First, I would be honest with my partner and not lie to her. Second, I would never charge her for financial advice or service. And third, I would let her do what she is comfortable with financially - it is her money, not yours.

+1, well said.

[Mulligan]

Quote:

Originally Posted by Bestwifeever Thank goodness she can use the $130/month SS to pad the budget!

Hey Wife, that's a windfall compared to mine... I am looking at about $110 myself.

[Bestwifeever]

Quote:

Originally Posted by Mulligan Hey Wife, that's a windfall compared to mine... I am looking at about $110 myself.

Hey, big spender!

Shirley Bassey - Big Spender (From "Divas Are Forever" DVD) - YouTube

[Bestwifeever]

Quote:

Originally Posted by obgyn65 First, I would be honest with my partner and not lie to her. Second, I would never charge her for financial advice or service. And third, I would let her do what she is comfortable with financially - it is her money, not yours.

I think if you read back several of Redduck's posts you would realize he has a nice quirky little sense of humor, Ob (just as we appreciate from reading your posts that you have been a very good sport about your conservative take on your nest egg). I have a feeling Not-Really-Mrs. Redduck isn't really paying him for his financial services . Well, not in cash, anyway.

[obgyn65]

I would like to apologize to Redduck if I missed the joke. As mentioned in the past, I was not born in the US and my culture and language from birth are very different from the Anglo Saxon ones, hence the occasional misunderstanding.

Quote:

Originally Posted by Bestwifeever I think if you read back several of Redduck's posts you would realize he has a nice quirky little sense of humor, Ob (just as we appreciate from reading your posts that you have been a very good sport about your conservative take on your nest egg). I have a feeling Not-Really-Mrs. Redduck isn't really paying him for his financial services . Well, not in cash, anyway.

[Meadbh]

Quote:

Originally Posted by obgyn65 I would like to apologize to Redduck if I missed the joke. As mentioned in the past, I was not born in the US and my culture and language from birth are very different from the Anglo Saxon ones, hence the occasional misunderstanding.

Neither was I, but I do see the humour (With a U. I am in Canada!)

Let's all lighten up!

[steelyman]

Quote:

Originally Posted by Meadbh Neither was I, but I do see the humour (With a U. I am in Canada!) Let's all lighten up!

Or just finally say where he is from? Al Capone's Vault?