Many thanks to all the great posts. Your insights and suggestions have led me to this point. I'm curious to lay out my plan and see if I am missing anything or if anyone may offer improvements.
44 years old
1.0 million in liquid, investable $
200k in a 401(k)
Goal: $50k per year indefinitely (lets say 35 years - I have too many bad habits to live to 100...)
Heres the plan I want to implement:
6 years living expenses in safe investments...(300k)
1-year MMA (50k)
1-year CD (50k)
2-year CD (50k)
3-year CD (50k)
4-year CD (50k)
5-year CD (50k) (My small, Denver credit union is still out of whack with national rates - the 5 -year CD is still yielding 6.0%)
Then set up a Paul Merriman ETF Banaced Buy-and-hold portfolio (http://www.fundadvice.com/portfolio.html
) - split 50/50 between FI and stocks (700k)
6.25% S&P Depositary Receipts (SPDR) S&P 500 (SPY)
6.25% Vanguard Value VIPERs (VTV)
6.25% I-Shares Russell Microcap Index (IWC)
6.25% Vanguard Small Cap Value VIPERs (VBR)
5% I-Shares MSCI EAFE (EFA)
5% I-Shares MSCI EAFE Value Index (EFV)
10% WisdomTree Int'l Small Cap Div Fund (DLS)
5% Vanguard Emerging Market VIPERs (VWO)
25% I-Shares Lehman 1-3 yr (SHY)
25% I-Shares Lehman Aggregate Bond (AGG)
(I may add some foreign bonds to the US mix...)
So at this stage I have 300k in CDs/MMA, 350k in bond funds, and 350k in stock ETFs...
Add to that the 200k in the 401(k) (stock funds), and the totals come out:
CDs/MMAs - 300k
Bond funds - 350k
Non-401(k) stock ETFS - 350k
401(k) stock funds - 200k
Total FI - 650k
Total stock - 550k
I am a little paranoid, and am concerned about the future of the stock market. Thus the stock/bond-CD mix.
I figure to rebalance yearly. If the non-retirement stock funds do well, I'll take the profits and throw it into the MMA. If they don't, and the bond funds do well, I'll throw those profits into the MMA. If neither do well, I'll live off the maturing CDs in the meantime.
Do you think I should send the dividend/cap gains from the stock/bond funds into the MMA?
Have I missed anything?