Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Would like help allocating into a 403bRoth and tIRA please
Old 01-03-2021, 04:46 PM   #1
Recycles dryer sheets
 
Join Date: Dec 2020
Posts: 54
Would like help allocating into a 403bRoth and tIRA please

I am doing a bit of a reset with my Investments and opening a new Retirement plan with Vanguard this week. I don't trust salesmen as I've has Insurance Salespeople trying to get me to invest for the last year, but I'm all ears to you guys, despite being total strangers!

I am 49, retiring when I am 56. Will be receiving a pension, no SS. Pension will cover 90% of my expenses. 100% if I get a little more Frugal.

I will be moving my tIRA all Stock MF from Edward Jones to Vanguard.It has about 35k and I haven't touched it in over 8 years, SADLY. It's been in all stocks.*It will be the first thing I withdraw from when I'm 59.5. I calculate that as a supplement to my Pension each month, after tax, that it will last me 7-10 years barring any surprises. I want to keep the tIRA*moderate, reducing my current risk and at the most so I want to make it more balanced.*

I will also open a new 403b Roth through my school district and it would supplement my pension when I'm closer to 70 so it would compound for 20 years. I'm hoping I don't even need to touch it and pass it on to my 2 kids.*

The following are my thoughts on where to allocate my investments...

tIRA- VBIAX ( Balanced Fund) it has only 0.7% and has performed well over the years. I believe it is passive. OR*Target Date Fund 2030, but fees are a little higher. I think it is active.

The 403b- This is where I'm a little unsure. Possibly a 2 or 3 fund Portfolio? Or is there a mutual fund that would be just as good? I am willing to be a little more riskier here since it will sit for 20 years, I hope.

While I am learning a lot about Investments, I am not assuredly confident that I can manage my own investments. That's kinda scary! I will admit I am naturally risk averse, but if something happens to an investment, I would leave it alone knowing that it will eventually go up.

I just want to be smart as I am getting close to retirement. I'm no longer in my 20's! Haha

Thank you in advance.
Stillwater007 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-03-2021, 05:47 PM   #2
Thinks s/he gets paid by the post
Out-to-Lunch's Avatar
 
Join Date: Jan 2020
Location: Milwaukee
Posts: 1,166
Congrats on getting out of EJ!

What are you planning to use to supplement your pension from 56 to 59.5?

If I am reading you correctly, you recognize that it was good (but perhaps lucky) to have been 100% in stocks for the past 8 years. And now, you are looking to take a bit less risk as you get closer to retirement. Did I get that correct?

The VBIAX fund is fine. It's ER is actually 0.07%, not 0.7%, so that is good. It's AA is 60/40. Does that meet your overall risk tolerance?

Personally, I don't think about having different risk characteristics in the different savings vehicles I have. Money is fungible, and what is in your portfolio is what is in your portfolio, no matter how you slice it. However, if it helps you to mentally divide it up, fine with me!

You indicated that you will now start contributing to a Roth savings vehicle. Have you made that decision by comparing what you think your future tax rates will be, compared to what they are now?

I think the next step is for you to share with us what funds are available in your 403(b).

You can do this! You need to learn some more things, I think, but you are on the right track.
Out-to-Lunch is online now   Reply With Quote
Old 01-03-2021, 06:37 PM   #3
Recycles dryer sheets
 
Join Date: Dec 2020
Posts: 54
Quote:
Originally Posted by Out-to-Lunch View Post
Congrats on getting out of EJ!

What are you planning to use to supplement your pension from 56 to 59.5?

If I am reading you correctly, you recognize that it was good (but perhaps lucky) to have been 100% in stocks for the past 8 years. And now, you are looking to take a bit less risk as you get closer to retirement. Did I get that correct?

The VBIAX fund is fine. It's ER is actually 0.07%, not 0.7%, so that is good. It's AA is 60/40. Does that meet your overall risk tolerance?

Personally, I don't think about having different risk characteristics in the different savings vehicles I have. Money is fungible, and what is in your portfolio is what is in your portfolio, no matter how you slice it. However, if it helps you to mentally divide it up, fine with me!

You indicated that you will now start contributing to a Roth savings vehicle. Have you made that decision by comparing what you think your future tax rates will be, compared to what they are now?

I think the next step is for you to share with us what funds are available in your 403(b).

You can do this! You need to learn some more things, I think, but you are on the right track.
Hello! Yes, I've done the math and the Roth is a tad better for me. I will keep the tIRA Traditional so I have a little flexibility.

Here's the list of options I have from Vanguard:
https://www.vanguard.com/pdf/403binvt.pdf
Stillwater007 is offline   Reply With Quote
Old 01-03-2021, 07:01 PM   #4
Recycles dryer sheets
SnowballCamper's Avatar
 
Join Date: Aug 2019
Posts: 291
Quote:
Originally Posted by Stillwater007 View Post
While I am learning a lot about Investments, I am not assuredly confident that I can manage my own investments. That's kinda scary! I will admit I am naturally risk averse, but if something happens to an investment, I would leave it alone knowing that it will eventually go up.
I think a simple solution for you might be to just use target date funds. Since your withdrawal plan is based on the account type, just put each account all into the target date fund that aligns with your planned withdrawal timeline for that account. This would be consistent with your stated aptitude to leave it alone until it goes up. Good luck!
__________________
--At what age does spending less now in order to have more later stop making sense?
SnowballCamper is offline   Reply With Quote
Old 01-03-2021, 10:28 PM   #5
Thinks s/he gets paid by the post
Out-to-Lunch's Avatar
 
Join Date: Jan 2020
Location: Milwaukee
Posts: 1,166
I think Snowball's suggestion is a fine one. I also think that your idea in the OP of a 2- or 3-fund portfolio is also a good choice. For my equity, I chose to go 70% US, 30% international. Then mix in bonds to your AA liking. So, if you wanted a 60/40 AA overall, you could use

40% Total Bond Market
42% Total Stock Market
18% Total International Stock Market
Then rebalance once a year or so.

I know you know this, but just spelling it out to give you some confirmation.
Out-to-Lunch is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Roth conversion with TIRA and non-deductible TIRA fh2000 FIRE and Money 15 10-11-2019 12:07 PM
Allocating tax deferred funds - a quick question seraphim FIRE and Money 8 03-29-2012 06:28 AM
Re-allocating how I use our house Rich_by_the_Bay Life after FIRE 37 03-14-2011 11:39 PM
Allocating new money: Snowball vs. AA method? Urchina FIRE and Money 11 10-22-2008 02:55 PM
Are Asset Allocating Withdrawal Strategies a Reliable Retirement Funding Method? haha FIRE and Money 51 10-15-2008 08:01 AM

» Quick Links

 
All times are GMT -6. The time now is 09:17 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.