Need to update Investment Policy Statement (IPS) after retirement

[audreyh1]

I turned 75 this past August. A 5 year comparison is exactly what I want.
I don't see Total International being relevant to my Asset Allocation.

I agree. I’ve reduced my international position and wish I could reduce it more (unrealized cap gains) due to dealing with the annoying foreign tax credit at tax time.

 

[FiveDriver]

Over on Bogleheads, there were a couple of (long and detailed) threads by Professor Ed McQarrie (McQ) that showed that Intermediate Treasuries worked better as a diversifier:

Can you do better than BND? - Bogleheads.org

Can you do better than BND, Part 2: Test across bear and bull markets - Bogleheads.org

Fist Link = Very thoughtful analysis.
McQ's charts are super illustrative (my Engineering background). I note that his first chart points out exactly why I moved out of my Bond Allocation when Chair Powell started hinting at Rate Hikes in December 2021. If you 'stayed the course' your Bond Allocation got knocked back to 2018.

McQ has a post, about half way down page 1, that clearly spells out his thesis.....
"This thread approaches BND as a supplement for stocks, something to be added to a stock portfolio to dial back its risk. The performance of BND in isolation is therefore somewhat irrelevant; the question is whether you can find some other bond fund which provides an even better pairing for the purpose of reducing the risk of a 100% stock allocation—without sacrificing any more return than necessary.

You do understand that historically, owning any bonds at all reduces wealth accumulation? Most of the time, relative to a 100% stock portfolio? You knew that, right? Risk reduction comes at a cost."

Of course, that thread then goes on for 6 more pages, highlighting the dogmatic boglehead approach. Which is why I don't post over there anymore.

 

[FiveDriver]

Not an optimist

Ha-Ha !!
When my Dad retired he always said, "I don't make any long range plans."

He lived to be 99 years old.

 

[Koolau]

Ha-Ha !!
When my Dad retired he always said, "I don't make any long range plans."

He lived to be 99 years old.

Heh, heh, not long-range compared to, say, Sequoia forests, I guess.

But he clearly did something right, living that long. How did his financial situation turn out? Probably just fine. Most people are adaptive.

 

[jebmke]

I agree. I’ve reduced my international position and wish I could reduce it more (unrealized cap gains) due to dealing with the annoying foreign tax credit at tax time.

I've sort of let mine wither a bit as the markets adjust. FTC is still an issue but I'm about to turn over our taxes to a local firm even though ours are simple (ex F1116). I can still do them and do 75-100 returns a year as a volunteer but I would like to get some run time with an accountant before I accidently need them or wife needs them after I croak.

 

[ArmchairMillionaire]

Why are you holding any bonds in your Roth? Folks generally leave that as all stocks for faster growth. If preferentially put your bonds in tax deferred, it will slow the growth of tax deferred and will reduce the need for Roth Conversions later on.

Why? Because I'm still learning about all the intricacies of investing. I'm no expert. That's why I come here - to learn things.

My Roth IRA was 100% equities until just a few years ago, when I reached around 5 years before retirement. Then I shifted most of my accounts from a 34/33/33 allocation first to a 25/25/25/25 split for a few years and then to a 40/20/20/20 split. I did this to hedge against a drop in major equities value hitting just as I retired. Maybe if I had known it wasn't proper to diversify that account somewhat, I would have done it differently.

I'll try to do better in the future.

 

[Gumby]

After years of underperformance, I dumped international equity funds when I retired in 2019. I continue to work to simplify my holdings and my accounts.

 

[zangbao]

After years of underperformance, I dumped international equity funds when I retired in 2019. I continue to work to simplify my holdings and my accounts.

I did the same when I retired.

I'm now 95% domestic stocks.

 

[mrfeh]

Why? Because I'm still learning about all the intricacies of investing. I'm no expert. That's why I come here - to learn things.

Tax-efficient fund placement - Bogleheads

www.bogleheads.org

 

[FiveDriver]

After years of underperformance, I dumped international equity funds when I retired in 2019. I continue to work to simplify my holdings and my accounts.

IMO, we'd be hard pressed to find a length of time when Total International Stocks markedly outperformed the SP500. Maybe in 2001, or maybe 2008, but the rest of the time it'd be pretty much even.....with added currency risks.

 

[ArmchairMillionaire]

Tax-efficient fund placement - Bogleheads

www.bogleheads.org

Thank you.

 

[tulak]

I haven’t dumped my international, but it’s gotten smaller over time.

This reminds me of an article I read about a couple - I think it was the Kaderli’s - who initially retired in the 90’s with only an S&P500 fund. They eventually diversified, when more fund options became available (according the article).

It made sense at the time, and at one point, I slice/diced my allocation and had around 7-8 equity classes. Now I’m down to two, Total US and Total International, and start to think that Total US is more than enough. It’s easy to over-diversify with so many good indexing options.

 

[Out of Steam]

Our current allocation is 45/55 Stock/Fixed income. Most of the fixed income holdings don't carry market risk (i.e. TIAA Traditional). I might go to 50/50 once I'm collecting Social Security next year, especially if interest rates fall.

I've simplified our holdings in the past two years, especially in TIAA.

 

[Koolau]

I've kept my small international MF and, by default, it's gotten smaller in terms of my total portfolio. I keep it - just in case, I suppose. It's a diversity play that hasn't w*rked out all that well.

 

[racy]

Genworth does surveys on the cost of long-term care. Cost of Long Term Care by State | Cost of Care Report

 

[corn18]

That matches up with what my MIL has s paying in Cincinnati. Thanks for the link!

 

[kgtest]

As part of mine, I like to revisit the Callan Periodic Table from time to time

 

[Montecfo]

How much do you think we should plan for LTC? We will self insure. Google seems to indicate 3 years of semi private nursing care. Gonna set the bar a bit higher. A year of fully private nursing home care in a good facility is $180k around my parts. Three years for 2 people equals $1M. That will be a good starting point.

It sounds more like a maximum. It depends I guess on what likelihood of full coverage you feel you need. And existing living expenses seperatey budgeted are an offset.