Rebalance Day

[SumDay]

I did some rebalancing in July, and was surprised I didn't have to touch a thing today. 1/1 is normally my day to do this, but something made me do it in July.

[ripper1]

Quote:

Originally Posted by W2R Thanks for posting this thread, ripper1. It reminded me to stop procrastinating and go ahead with my usual early January rebalancing. I rebalance right after I do my annual withdrawal in January for the following year's spending. I also allow myself to rebalance at other times if the equity portion of my 42:58 AA is off by over 2.5% (less than 39.5% or over 44.5%). But that would be rare. Yes, it was hard this year! Not only does one not want to sell funds with such good performance, but also the taxes are unpleasant to consider. So anyway, thanks again for the little "nudge".

Always nice to get noticed by someone here. Especially from a distinguished Mod such as yourself. Your welcome, W2R

[GravitySucks]

Since retiring, I rebalance when I pull my living expenses and when I think a market run up has gone long enough.
I've been lucky and haven't had to sell bonds and have reinvesting bonds that have matured.
It remains to be seen if I can pull the trigger to sell bonds and buy stocks when the time comes.

[audreyh1]

Hmm - looks like some of the earlier trimming I did (in early to mid Dec) took care of most of it. I was getting rid of some equity funds that weren’t that tax efficient and did not have an overly large unrealized gain.

[gerntz]

Quote:

Originally Posted by Moemg My RMD will take care of rebalancing for me .

+1

[gerntz]

Rebalancing is way down on my list of financial priorities. Drifting for a while is fine.

[Golden sunsets]

We take our RMD's in late December after having gotten to a finite estimate of federal and state taxes. For 2019, year we took care of the RMD's on 12/23. We withhold 100% of our estimated tax liability from our RMD's and transfer the net remaining distributions to our taxable account. Yesterday I calculated what we need to do to rebalance, selling in our IRA's and buying in our taxable account, so no tax consequences. I put the sell order in on some of these funds last night and will finish up today on the sells. I plan on buying on Monday and Tuesday of next week, buying bonds in our IRA's and index equity funds in our taxable account.

[bingybear]

rebalancing is when the balance is out of wack for me, not time. Looks like I need to add more bond CEFs.

[nancyfrank232]

Quote:

Originally Posted by ripper1 I need to do my annual rebalance and it is hard because stocks have done so well. Oh well. Here we go. Do others here rebalance yearly or within bands?

I’ve been investing since the 90

I’ve never rebalanced yearly or within bands

[mrfeh]

Quote:

Originally Posted by ripper1 I need to do my annual rebalance and it is hard because stocks have done so well. Oh well. Here we go. Do others here rebalance yearly or within bands?

We use bands, however, we ended the year at our exact goal: 60/40.

That only happened because all new money in 2019 went into fixed income.

[racy]

Quote:

Originally Posted by ripper1 I need to do my annual rebalance and it is hard because stocks have done so well. Oh well. Here we go. Do others here rebalance yearly or within bands?

20% bands, based on Kitce's article: https://www.kitces.com/blog/best-opp...nd-thresholds/

[scrabbler1]

While I had been paying far more attention to the taxable part of my portfolio in the last few months, I did notice that my rollover IRA had gotten out of balance a little. So, today, as I often do in January, I made a small move in the IRA to get it back into my AA range.


I don't really have an AA range for taxable part of my portfolio because it is designed mainly to generate cash to cover my expenses. What I tweaked there today was what I want to do with dividends and cap gains in each of the 3 mutual funds. I had just done a major switch of the stock funds with the new one generating less income than the old one.

[mrfeh]

Quote:

Originally Posted by scrabbler1 While I had been paying far more attention to the taxable part of my portfolio in the last few months, I did notice that my rollover IRA had gotten out of balance a little. So, today, as I often do in January, I made a small move in the IRA to get it back into my AA range. I don't really have an AA range for taxable part of my portfolio because it is designed mainly to generate cash to cover my expenses. What I tweaked there today was what I want to do with dividends and cap gains in each of the 3 mutual funds. I had just done a major switch of the stock funds with the new one generating less income than the old one.

Is there a reason you don't look at the AA of your portfolio as a whole, instead of account by account?

[Chuckanut]

I re-balanced today and took advantage of the up market to pull out the estimated cash I will need in 2020.

I also checked my variable withdrawal SS and I see that after taking a somewhat decreased withdrawal for 2019 (based on the 2018 market) the market of 2019 has made up for the decrease and more. And, yes, the fact that I have one less year to provide for also gives a bump up in the withdrawal amount. I also spent less than I anticipated last year on wine women and song due to my knee surgery and the long recovery period. I've got to use up that excess cash ASAP in 2020.

[scrabbler1]

Quote:

Originally Posted by mrfeh Is there a reason you don't look at the AA of your portfolio as a whole, instead of account by account?

As I wrote earlier, the taxable portion of my portfolio I use to generate income to cover my expenses. Whatever the AA happens to be to achieve that goal doesn't matter. The rollover IRA I won't be tapping into for at least 3 more years, so its AA I do target while I wait. I have been gradually moving it away from stocks and into bonds but it is still close to 50/50.

I do look at the overall AA of both accounts but it's only a "that's interesting" reaction I have to it.

[RockyMtn]

Wrapped up my rebalancing this week to get back to my desired 60/36/4 weighting. Took about ten different trades to accomplish everything. Trying to find what to sell that triggered the least capital gains was the hardest part. Now I can let is sit and hopefully have to deal with the same problem next year.

[RobLJ]

Similar to several others, I scraped off about 15% of last years' gains to fund the next two years' spending. The lucrative part-time online gig probably ends in May, so next year all will come out of my 403b, until DW's IRA is available for withdrawals in 2022.

I have been preparing for three years, slowly scraping off 20-40% of gains, and moving from a 63% stock allocation to (beginning last year 53%), with a target of 57%. We moved up in 2019 to 59% stock allocation due to gains, despite some withdrawals midyear to stock holdings. My account is 50-35-15%, with DW's stock allocation considerably higher, although after she qualifies for IRA withdrawals, I'll balance out the allocations.
Overall, we are 57-27-16; I'll move some of the cash to short-term bonds for a bit more yield and to have a considerable stash to move back into stocks if we get a 10% or higher correction.

Right now (and for the next 5 years) I'm withdrawing from my account up to the top of the 12% tax bracket, with unspent withdrawals going into a brokerage account; we may do some Roth roll-overs beginning 2021. Beginning next year-2024, the withdrawal rate will slightly top 5%, then go down to 3.5%-4% when I draw SS.

It took paying for a solar panel installation and a Chevy Bolt to slightly top our planned SWR spending this year, so there is quite a bit of slack in the budget. In 5 years when I hit SS full age and begin SS withdrawals, I plan to gradually move the stock allocation back up to between 60-65%, the latter when DW hits SS full age.

[Dtail]

For now, rebalancing is an easy no tax concept, since most of the investments are in TIRA.

[kgtest]

Considering I am 100% equities...and still accumulating... I continue to buy more equities via both DW and I 401k contributions.

And they say the ride up isn't as fun as the ride down...

Not sure if I will ever be less than 100%...but family real estate business sort of acts as our families "bonds". I really hate to compare it to bonds, as its really fixed income in the sense all notes are paid so they generates cash.

SO no need to really have a "safe alternative" to equities in a crash.

[gerntz]

Quote:

Originally Posted by Golden sunsets We take our RMD's in late December after having gotten to a finite estimate of federal and state taxes. For 2019, year we took care of the RMD's on 12/23. We withhold 100% of our estimated tax liability from our RMD's

No way I know what 100% of our taxes are by 12/23 of any year. Net, always overpay from RMD up to +10% of previous year.