Vanguard STAR Fund as basis for SWR Retirement

[Hydroman]

I am within 2-3 years of ER at which time I will be age 51-52. I like to keep things simple. In that regard I am considering investing all my total SWR portfolio into the Vanguard STAR fund. It is a well diversified fund of funds with about a 60/40 equity to bond to ratio. It has averaged 11% annual return over its 20 year life span with the worst year being down just a tad short of 10%.

Any opinions on its suitablity to withstand 4-5% annual withdrawals?

Here is a link:
http://flagship4.vanguard.com/VGApp/hnw/FundsHoldings?FundId=0056&FundIntExt=INT

 

[preben]

I think it is a fine fund for the purpose you are looking at.(set and "forget").
Personally I would like a bit more foreign (only 12%) and some commodities but that said I like the Star Fund better than many of those "Life Strategy/Retirement 2022" funds out there.
Cheers!

 

[BigMoneyJim]

I think it is a fine fund for the purpose you are looking at.(set and "forget").
Personally I would like a bit more foreign (only 12%) and some commodities but that said I like the Star Fund better than many of those "Life Strategy/Retirement 2022" funds out there.
Cheers!

At the risk of hijacking the thread, do you consider LifeStrategy Moderate Growth less desirable than Star, and why? My only dislike of LS Moderate is the AA fund component, but I'm learning to live with it.

As far as the OP, my current plan (which I'm not following 100%) is to use LS Moderate Growth and throw in some other funds (total international, extended market, REIT index) to tweak the asset allocation. (In reality I have a lot in Wellington due to my 401(k)'s previous lack of LS Moderate Growth.) So I dont see anything wrong with one diversified fund even though I'm adding a little spice to mine.

 

[yakers]

I certainly wouldn't criticize the choice of Star. My wife is retiring in a couple weeks and we expect to transfer her 403b to Vanguard, probably 60% in Wellesley and the rest in the Star fund to get a bit more diversification and growth. The Lifestyle funds more than Target Retirement may also interest you. The fund we have our Roths in is the Asset Allocation fund (VAAPX) which we are satisfied with. Choice is supposed to be a good thing but it can get overwhelming sometimes.

 

[Tony Tampa]

Does Fidelity have anything comparable to STAR Fund that would qualify for the
4% withdrawl strategy?

 

[unclemick]

Why not?

Given the range of ER's who post here - you are always stuck with working from your own personal situation - what is the assigned mission of the particular portfolio you chose and what hormones do you bring to the party.

Me - lazy(balanced index camp), old phart(RMD is coming), with individual stocks for mad money/hormones - cause early SS/small pension are now backstoppers in case I screw up.

BTY - I've always been jealous of Ben's portfolio - if I ever become an ex pat instead of a provincial - well

heh heh heh heh heh heh

 

[preben]

Unclemick; come visit and get a taste of the sweet life in Thailand! Door is open my friend!

BMJ; admittedly a while ago I checked last but I recall finding some of them too conservative for a long retirement - even if one picked a longer peroid (too high a % in bonds). It also had same issue as Star; too little international. I do not recall which had the most overlap but I remember 1 was worse than the other.

Above said both are probably fine, but a fixed 60/40% split (and adding some international+commodities if one has the desire) seems to me to be a good sweet spot. Unclemich added some Reits before but chickened out while still holding some gambles in dividend stocks I believe.

Cheers!

 

[Rich_by_the_Bay]

I figured that when the time comes to draw down my savings, I would cherry-pick the withdrawals from the category of asset that happens to be doing the best, thereby reallocating and withdrawing at the same time. To do this, I would use separate index funds for small, large, value and growth.

With blended funds (whether 60/40 or other), it seems that whenever you withdraw, you are tapping all assets, even those that happen to be down at the time.

Is this a legitimate reason not to put it all in a single fund, however well-diversified it may be?

 

[Hydroman]

Rich,

I had the same concern, but since the fund rebalences itself, I believe affects of withdrawals on reallocation is nil. Maybe I am missing something?

 

[brewer12345]

Rich, I think that a fund like STAR that rebalances does the cherry picking automatically.

 

[Rich_by_the_Bay]

Rich, I think that a fund like STAR that rebalances does the cherry picking automatically.

hmm.. it seems that the autobalancing just assures that when you withdraw, you are always withdrawing 60/40 stocks to bonds. Does it also autobalance among large, small, growth and value?

I guess if autobalancing happens frequently enough or continuously, and if it includes category of equities as well as stocks to bonds, you have already taken advantage of the "cherries" through the rebalancing before you withdraw.

I just confused myself. Anyone?

 

[brewer12345]

I guess if autobalancing happens frequently enough or continuously, and if it includes category of equities as well as stocks to bonds, you have already taken advantage of the "cherries" through the rebalancing before you withdraw.

I think that's pretty much the deal.