Asset Allocation Breakdown with.........

[augam]

Pension/Lump sum as part of portfolio.

I am set to retire within the next few months and am wanting to pin down AA.

Total portfolio of 1.7ish of which 1.1 is in pre tax IRA at Fido and a 600k lump sum or 24k/yr monthly pension option.

How do you figure AA with this scenario.

Thanks

 

[racy]

Are you asking what your current asset allocation is, or what it should be once retired?

 

[RunningBum]

I figure out from immediateannuities.com what it would cost me to buy an annuity equal to my pension, and consider that as cash in my AA. That works well for a single person, perhaps not as well with a married couple depending upon the survivor benefits.

A quick rant on your thread title: please don't use ... and keep your subject vague. If someone else is searching for the affect of a pension on their AA, it's unlikely they'll find this. Also, people who don't care to read this subject don't have to click on it. And to your benefit, someone who have some good input may be skipping over this vague subject title. Rant over.

 

[augam]

Are you asking what your current asset allocation is, or what it should be once retired?

Now, as I would like to adjust what I can now in anticipation of the pension/lump sum.

 

[racy]

List the fund names and amount in each from your Fidelity statement.

 

[RunningBum]

I read the first post more closely and see the $600K lump sum value. You could use that, as cash.

Some here advocate for just reducing your annual withdrawal needed by the $24K of the pension, and figure your AA on the $1.1M part.

It's up to you which way to go. As large of a part as your pension is, if you counted your pension as cash you'd need the rest in equities to have a ~65/35 split. I don't think you want the rest in equities. So I'd probably be inclined to base your AA on only your non-pension investments.

 

[augam]

I figure out from immediateannuities.com what it would cost me to buy an annuity equal to my pension, and consider that as cash in my AA. That works well for a single person, perhaps not as well with a married couple depending upon the survivor benefits.

A quick rant on your thread title: please don't use ... and keep your subject vague. If someone else is searching for the affect of a pension on their AA, it's unlikely they'll find this. Also, people who don't care to read this subject don't have to click on it. And to your benefit, someone who have some good input may be skipping over this vague subject title. Rant over.

My bad on the ....... you are right.

 

[augam]

List the fund names and amount in each from your Fidelity statement.

I get those and post up.

I read the first post more closely and see the $600K lump sum value. You could use that, as cash.

Some here advocate for just reducing your annual withdrawal needed by the $24K of the pension, and figure your AA on the $1.1M part.

It's up to you which way to go. As large of a part as your pension is, if you counted your pension as cash you'd need the rest in equities to have a ~65/35 split. I don't think you want the rest in equities. So I'd probably be inclined to base your AA on only your non-pension investments.

I kinda was thinking along those line regarding lump sum as cash. The W/D rate for the 24k is a good point.

 

[augam]

list the fund names and amount in each from your fidelity statement.

 

[pb4uski]

List the fund names and amount in each from your Fidelity statement.

You forgot to ask for account numbers, user name, password, SS# and address.

 

[racy]

You forgot to ask for account numbers, user name, password, SS# and address.

First, ya have to build trust.

 

[OldShooter]

View attachment 34831

Ack. That may be the most undiversified portfolio I have seen lately. Consider carefully the advice from investing guru William Bernstein (https://en.wikipedia.org/wiki/William_J._Bernstein):

• (on investing for retirement) “Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

and

• “Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine”

IMO your first and highest priority should be diversification, most easily done by buying a US total market fund and an International total market fund in a blend that suits your taste. 70/30 and 60/40 seem to be quite popular around here. We buy a single total world fund, VT/VTSAX that doesn't overweight the US. But IMO that is a minority position here.

 

[racy]

OP, your current allocation is:
US stk 20% (6 companies)
Int'l stk 9% (3 companies)
Cash 72%

You are taking a lot of risk with individual companies (i.e. GE's performance trend).

I don't know your willingness to take risk, your expenses, your goals, etc. so I don't presume to recommend a retirement asset allocation for you.
However, I would suggest you seek the help of a professional. Find a fee based, fiduciary advisor (a "Registered Investment Advisor," RIA) who will act in your interest, not the company he/she works for. (So, don't go to Edward Jones, Raymond James, or an Insurance salesperson!).
Check here: https://garrettinvestmentadvisors.com/

Also, some self education would be a benefit, check here: https://www.bogleheads.org/wiki/Getting_started Watch the videos in the little "The Bogleheads Philosophy" box.

Good luck!

 

[atmsmshr]

Ack. That may be the most undiversified portfolio I have seen lately.

IMO your first and highest priority should be diversification, most easily done by buying a US total market fund and an International total market fund in a blend that suits your taste. 70/30 and 60/40 seem to be quite popular around here. We buy a single total world fund, VT/VTSAX that doesn't overweight the US. But IMO that is a minority position here.

Agree - Unless you have some LTCGs you are trying to tap, asset allocation is not the problem here, it is lack of diversification with exposure to some shaky sectors.

IMHO - would not recommend buying into one of the big three USA indices at the moment. OTOH there are some zombie stocks listed in the portfolio that you are holding now. Tough call.

 

[OldShooter]

... IMHO - would not recommend buying into one of the big three USA indices at the moment. OTOH there are some zombie stocks listed in the portfolio that you are holding now. Tough call.

I would not go all in, either. Too much chance for regret if the market goes down before (as history predicts) it recovers. It may well do that. I would look at dollar cost averaging over maybe 6+ months.

But be careful -- don't permit the tax tail to wag the investment dog. As I'm sure the past couple of months have taught, the current holdings are pretty risky.