Pro Rata

[pilgrim555]

Hello Y'all

Question: I have seven various mutual funds (no Roth's) Have been withdrawing via short term bond...Monthly...TRowe Rep suggested the option of Pro Rata...I guess a percentage of all...Does it make much difference? Thanks

 

[Brat]

If you are retired you should develop a withdrawal plan, not just how much but which resource to use first. I like the approach of Ray Lucia where the retiree has about 7 years of money in very secure investments (CDs, Fed. Bonds), 7 years in low risk investments (for me balanced mutual funds), and the remaining in equities. Draw down the very secure first, then spend the low risk investments. His theory (and they are all theories) is that if you hit a bear market they cycle time is less than 14 years and there should be ample reserves to re-allocate your investments.

He has a new book coming out in a month or two. He touts non-traded REITs as a part of a portfolio. I am old enough to remember non-traded REITs tanking in the 70s, not enough accountability IMHO. A traded REIT that invests in office/industrial property would do the job IMHO.

No one investment strategy meets everyone's needs. I like to read them all and put together an approach that fits my style.