Not Sure What To Do - 401k Rollover

[Dog]

Interested in other’s thoughts:

Earlier this year I finally pulled the trigger and rolled my 401k from former employer to my Vanguard IRA. I moved the $ into Wellesley and left some in MM settlement fund until I could figure out next steps. I feel like it may be time to reallocate with a new year approaching. This is my IRA allocation as of of 12/16/20:

MM - 13% (vmmxx)
Bonds - 19% (vbtlx)
Intl stock - 8% (vtiax)
Stock - 36% (vtsax)
Wells - 24% (vwiax)

DH and I also have a small rIRAs, his TSP and and about 10% of overall portfolio in taxable CDs, MM and savings for emergencies, vehicle replacement, etc..

I plan to use the MM $ in IRA for Roth conversions and possible income over the next few years.

I’m just not sure if I should just leave Wellesley as is or reallocate among the Intl, total stock and bonds. It seems a bit redundant to keep in Wellesley, although it does help keep my stock/bond mix within my comfort range.

DH and I don’t need an aggressive portfolio and prefer to keep things simple. We just need to keep pace with inflation, although we have enjoyed watching our net worth grow since we retired in 2016, but don’t want to be greedy.

So, I’d like to hear what others think? What would you do?

Thanks everyone!

 

[wolf]

IMHO. I keep it very simple. Investment Assets. In Vanguard total stock market, and
rest in CD's. Allocation is your choice.

I think many years ago, Bob Brinker, recommend this strategy. I think he said,
Total stock market and Bonds. 50/50. Done. For thoughs who do not want to spend a lot of time trying to beat the market.

 

[OldShooter]

I don't like blended funds generally. The reason is what I call the Kool-Aid problem: When you pour the red and the green into a glass you can't tell which was responsible for the flavor or the color. With blended funds you can't compare the equity component with your results for other equity investments. Granted Wellesly has been a pretty good citizen but I'm with Ronald Reagan on this one: "Trust but verify."

So I would ditch the Wellesly. If you like its pieces, equity and bond, just duplicate that with two funds so you can see what each is doing separately.

Re keeping things simple I'm with @wolf on the equity side. Almost. VG total stock market VTSMX yes, but seasoned to taste with international as you are now doing. See:
Vanguard "Global equity investing:The benefits of diversification and sizing your allocation" https://www.vanguard.com/pdf/ISGGEB.pdf
(FWIW we just own VTWAX and don't worry about Us/international percentages.)

Bond fund zealots will be along soon with ideas and AA comments.

 

[Dog]

Thanks Wolf and Oldshooter for your replies. I appreciate your input and will be making some changes for sure.

 

[38Chevy454]

I don't see where the Wellesley is doing anything different than you can do already with your existing bond and stock funds. Only advantage is that Wellesley is active managed and keeps their nominal 40/60 allocation all the time. If you get out and invest in your current funds you will need to do more of the rebalacing as required. I do like the total market vs S&P 500 for extra diversification on the equity side. I struggle with the bond side myself, I try to stick with mid-term duration currently. I like low fees, and widely held funds in general over higher fee active managed. Although I do have some sector specific funds that have fees.


I also think your 13% in MM is kind of high, unless you plan to put that into something soon. I don't know your budget and other income amounts, but it seems that it could be higher total amount than needed for short term expenses. Just my observation.