Thoughts on low maintenance portfolio in retirement

[beachfire]

I set up a dummy portfolio using thoughts from Morningstar. I am still about a year away from making the jump. I think I would like to have a simple portfolio that I just rebalance annually. Not looking for views on the specific investment vehicles. More looking for thoughts on the general approach of a simple, low maintenance investment portfolio throughout retirement. Thanks for any feedback !

 

[razztazz]

I've known people who have has one single fund. Usually it was a balanced fund. The mutual fund rebalances it automatically. Completely untouched by human hands.

 

[OldShooter]

With any portfolio IMO your only "maintenance" needs to be a look once every year or two. That's what we do, running a portfolio somewhat larger than your Morningstar example. Any more frequent activity starts down the slippery slope from "investing" to "trading." Trading can be hazardous to your financial health.

I think Buffet is a bit overrated but his ideal holding period is "Forever."

So it is not really the number of funds that drives "maintenance" but rather the attitude IMO. With funds, fewer is usually better, however.

 

[Nightcap]

I've known people who have has one single fund. Usually it was a balanced fund. The mutual fund rebalances it automatically. Completely untouched by human hands.

I converted my 403B into an IRA with a single Vanguard LifeStrategy fund: VASFX. The UnIndicted Co-Conspirator was a little more conservative with her 401K: VSMGX.

Passive investing to the point of being supine.

 

[walkinwood]

I've had a low maintenance portfolio and do simple balancing when it gets out of whack by about 5%. I have fewer funds than you do and am in the process of reducing them further. 9 years into ER, it works for us.

 

[LOL!]

A single fund in all one's accounts is a perfect lazy portfolio. The Vanguard LifeStrategy funds or Target Retirement funds are good "single fund" approaches. Fidelity and others have similar finds. Certainly the industry supports the single fund idea wholeheartedly.

The only negative to single funds happens when one has significant assets in a taxable account and not just in tax-advantaged accounts. This is because the tax consequences are slightly different. However, if one understands a little bit about taxes, then even this is not a big deal.

Finally, one doesn't really need to do any rebalancing most of the time. One can let their asset allocation drift all over the place and it really won't matter. It's more a psychological crutch than anything else.

 

[LOL!]

As for the investments in the portfolio you posted, there is nothing special about them. You got your US equities, your foreign equities, and your fixed income.

Such a portfolio would probably not need much management if you were sending dividends to a cash account and spending them. That's because the equities would get chopped back by their 2% to 3% dividend payouts every year.

 

[gauss]

I went to a single fund portfolio upon retirement. I "actively managed" my portfolio during my working years. Once I had enough funds to retire, I put it on auto-pilot with a Vanguard Target fund (ed: balanced and passive).

This relieves my of the stress of feeling that I need to "do something" at times like this when many say the market is overvalued. I can yawn rollover and go back to sleep realizing that my balanced fund is consistently buying[-] high[/-] low and selling [-]low[/-] high. [ed: oops - been away from this too long]

The worst thing that I could do is continue to "actively manage" my portfolio knowing that I do not have future income to absorb any damage that I may inflict upon myself.

-gauss

 

[LOL!]

I can yawn rollover and go back to sleep realizing that my balanced fund is consistently buying high and selling low.

The worst thing that I could do is continue to "actively manage" my portfolio knowing that I do not have future income to absorb any damage that I may inflict upon myself.

Yep, just let the fund managers inflict damage on you passively.

 

[sengsational]

My IRA, Spouse IRA, My Roth mutual fund, My Roth brokerage, Spouse Roth, HSA, 401K, 529DD1, 529DD2...all kept separate because they have to be separate (law) or for my specific reasons. Each has a different "pallet" of options to select from. Even if I selected the closest thing to "balanced fund" available in each, I'd still need to grind through the prospectuses and do many calculations to see if I was getting the asset allocation I was targeting.

I made a spreadsheet that can be used to manage your own asset allocation. Only for the spreadsheet savvy types, but once you get it set-up, it's not that hard. Visit it once a year and be done with it. Of course, some of us visit it several times a year...but that's just because we like to tinker.

 

[pb4uski]

Most people could do fine with as few as 1-3 funds covering domestic equities, international equities and bonds/fixed income. I like to add a little spice with emerging markets stocks and international and emerging market bonds and that would be 6 funds.

Not much need for any more than that.