|
04-07-2012, 03:56 AM
|
#1
|
Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 1,555
|
It's decision time...
I admit I'm concerned about taking the plunge into investing, but have about 200k in inherited (non-spousal) IRAs and 172k in cash currently in a PNC 'Investment Account'. I retire in a year where there is about 560k in tax deferred accounts to deal with - but not until then.
Vanguard has a Wellesley Income Fund, VWINX or VWIAX, 30/70, higher dividends, and I'm wondering about using that for one of the IRA accounts (150k). The other 50k Ira I'm considering putting into a more aggressive account.
Vanguard also has a couple of nice balanced accounts (60/40) I'm considering putting 100k of the taxable cash in. (68k of the 172k to pay aff mortgage).
In the IRA account, where I have RMDs starting at 3.38%, would it be best to have the money in a conservative or aggressive account if I'm only going to take RMDs?
Income or growth for the cash? We have pensions, and I only want to withdraw 20k a year from the portfolio.
Being new, any thoughts or recommendations are appreciated.
Associated thought/question: on a non-spousal beneficiary IRA, can dividends be reinvested? I know we cannot contribute to the fund and must take the RMDs...
__________________
"Growing old is no excuse for growing up."
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
04-07-2012, 06:56 AM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
Vanguard has a financial planning service that is pretty good and reasonable (might be free in your case given the amount you have to invest) and they could make some good recommendations for you.
I'm a couch potato and only have Vanguard Total Stock, Total International and Total Bond in roughly 48/12/40 ratio across all my accounts. For tax efficiency, you want to have your bonds in your tax-deferred or tax free accounts.
|
|
|
04-08-2012, 09:46 AM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
|
Quote:
Originally Posted by pb4uski
I'm a couch potato and only have Vanguard Total Stock, Total International and Total Bond in roughly 48/12/40 ratio across all my accounts.
|
Is that equity/fixed-income/cash?
40% cash seems excessive.
__________________
May we live in peace and harmony and be free from all human sufferings.
|
|
|
04-08-2012, 11:16 AM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
Quote:
Originally Posted by Spanky
Is that equity/fixed-income/cash?
40% cash seems excessive.
|
No, domestic equity/international equities/fixed income. So my equity allocation is 60% and fixed income is 40%.
I count cash the same as fixed income (albeit meager income these days). I vacillate as to whether cash is part of investments or outside investments, but it doesn't make enough of a difference in my case to fret over.
|
|
|
04-09-2012, 06:40 AM
|
#5
|
Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
|
Quote:
Originally Posted by seraphim
Associated thought/question: on a non-spousal beneficiary IRA, can dividends be reinvested? I know we cannot contribute to the fund and must take the RMDs...
|
The dividends can be reinvested but you are probably going to have to redeem more shares than the dividends buy to cover your RMD.
You mentioned that you only want to withdraw $20,000/year. Based on your post, you have $932,000 in assets. The "classic" SWR would have you able to supplement your pensions with up to $40,000/year. How to invest depends on what your ultimate goal is for the money you aren't planning to spend.
If you are investing to increase what you leave to children, a 70% equity allocation makes sense because you would be investing in their time horizon. If it's for added security for you, you have "won" the asset accumulation game. In the words of William Bernstein, "When you have won the game, stop playing." In this case, I'd consider going very conservative and put 60 or 70% in fixed income.
I'm a big Vanguard fan. I am also a couch potato(e) investor with a 40% equities allocation. My equities are Vanguard Total Stock Market (VTSAX) - 60%, Vanguard Developed Market (VDMAX) - 20%, Vanguard Small Cap (VSMAX) - 10% and Vanguard Emerging Markets (VEMAX) - 10%. My fixed income is in individual bonds or CDs. Personally, I consider the interest rates at absurdly low levels due to Fed manipulation. These will go up and probably go up a lot. Long term bond mutual funds will get hammered when this happens. It happened to me in the 1980s and I don't intend to experience it again.
Yes, the paper value of my bonds and CDs will drop but they will mature at their full face value for me to reinvest. A bond mutual fund will continue paying the same dividends but their value will drop.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
|
|
|
04-10-2012, 08:32 AM
|
#6
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
|
A chunk in ETFs........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
|
|
|
04-11-2012, 03:41 AM
|
#7
|
Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 1,555
|
Thanks for all of the reponses. I've been out of touch for a few days, camping.
Quote:
Vanguard has a financial planning service that is pretty good and reasonable (might be free in your case given the amount you have to invest) and they could make some good recommendations for you.
|
That is my next step. DW is hesitant, however, to move away from her mom's FP. I I appreciate the advice about the bonds.
Quote:
The dividends can be reinvested but you are probably going to have to redeem more shares than the dividends buy to cover your RMD.
You mentioned that you only want to withdraw $20,000/year. Based on your post, you have $932,000 in assets. The "classic" SWR would have you able to supplement your pensions with up to $40,000/year. How to invest depends on what your ultimate goal is for the money you aren't planning to spend.
If you are investing to increase what you leave to children, a 70% equity allocation makes sense because you would be investing in their time horizon. If it's for added security for you, you have "won" the asset accumulation game. In the words of William Bernstein, "When you have won the game, stop playing." In this case, I'd consider going very conservative and put 60 or 70% in fixed income.
|
Yes, but I may not have to make an additional draw for a couple of years; The first RMD was $9100+, and it MIGHT be possible to squeak by on that - depends on how much we end up travelling.
I wouldn't mind leaving a nice inheritance for our son, so I have been using a longer time horizon. Plus, the women in DW's family are notoriously long lived. 50/50 is the most conservative I've considered, but maybe 60/40 isn't out of line. The more I listen to people hear, the more conservative I'm becoming. Everyone's helping me narrow down my allocation decision.
Quote:
If I understand ETFs: what would be the advantage, if I don't plan on trading?
__________________
"Growing old is no excuse for growing up."
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|