Stable Value Funds

[sengsational]

Attached the prospectus this time for my SVF.

This one had a 3.59% return last year. And a 0.33 expense ratio.

 

[Tadpole]

My husband has a Fidelity stable value fund - Fidelity Managed Income Porfolio. It returned about 1% last year and will be about the same or lower this year. It appears to return less than most others.

 

[ripper1]

Well, now I am wondering if a should convert the majority of my funds in my 457 to stable value so I get to my 50% for total portfolio and then convert the fixed income in my inherited ira and taxable account to mostly my stock funds so I have a 50/50 holistic approach. I would then have to calculate how I would withdraw from these accounts to reach my 2.5% withdraw rate. Any thoughts from this distinguished panel?

 

[sengsational]

Well, now I am wondering if a should convert the majority of my funds in my 457 to stable value so I get to my 50% for total portfolio and then convert the fixed income in my inherited ira and taxable account to mostly my stock funds so I have a 50/50 holistic approach. I would then have to calculate how I would withdraw from these accounts to reach my 2.5% withdraw rate. Any thoughts from this distinguished panel?

Since I don't have any inherited IRA's, I'm not sure what the differences are between pulling from that vs the 457. But I presume they're both penalty-free withdrawls but both taxable income, the difference being required minimum timing? If the 457 has better rmd rules, it would make sense to have the stability there, I guess?

 

[Animorph]

Well, now I am wondering if a should convert the majority of my funds in my 457 to stable value so I get to my 50% for total portfolio and then convert the fixed income in my inherited ira and taxable account to mostly my stock funds so I have a 50/50 holistic approach. I would then have to calculate how I would withdraw from these accounts to reach my 2.5% withdraw rate. Any thoughts from this distinguished panel?

The 457 and IRA should be identical for holding fixed income versus stocks, so it works for that. I hesitate about losing stock growth in the 457, given that the markets cooperate. It is relatively easy to sell a stock fund or whatever in the taxable account and buy it in the 457 or IRA to maintain the AA while "moving" cash into the taxable account. Just watch out for wash sale tax rules if you sell at a loss and buy the same fund within 30 days.

So you can do what you're thinking easily enough I think. Just think about growth in your tax advantaged accounts.

 

[Hermit]

All stable value funds are not created equal:

My SVF Morningstar Rating shows 1.28% for a 1 year return with a 3.67% category average and a benchmark return of 0.12%. It uses "Barclays US Trsy Bellwethers 3Mon TR USD" for a benchmark. Known expenses will drain most of my taxable accounts. I put emergency money in this fund while I am in the process of retiring, moving, building a new house, and adjusting to a life without kids' tuition and living expenses. I will move it to a better paying fund in a year or two when I have a better idea of my expenses in retirement.

 

[Cat-tirement]

DW's 403b has a stable value/fixed income fund that has a rate guaranteed for six months at a time. It was at 3% for the first half of the year, and just announced 3% for the second half. After reading this discussion, I am considering moving a significant portion of our bond allocation into it. Any reason that's a bad idea?

 

[brewer12345]

Sounds like a no-brainer to me.

 

[pb4uski]

+1 Wish I had something like that.