seraphim
Thinks s/he gets paid by the post
- Joined
- Mar 6, 2012
- Messages
- 1,555
Backgound:
I'm retiring June 1. My wife and have pensions to cover our basic needs. Currently have about 275k in Vangaurd with an AA of 60 stock and 40 bonds: an allocation I would like to maintain. Another 625k in stable employee accounts (principle protected/tax deferred) which are earning about 1.75% and 3% respectively. Money available for transfer to Vanguard accounts after I retire. We plan to withdraw about 2% a year for the purpose of travelling . I also maintain about 40k in cash savings.
With the concerns about bonds, it occurred to me if - rather than move 40% of that additional 625k into bonds, I left that percentage in the 3% account, it would be earning a similar (better?) yield than bonds without the risk of losing principle when the QEs end and interest rates began rising. The other 60% would go into stock funds.
I could make withdrawals from the taax deferred accounts as needed, if stocks dropped. If appropriate, down the road, I could transfer that money into bond funds when bond futures did not look so dismal.
I'd like to ask everyone's thoughts on this strategy. Any negative points I might be missing?
All thoughts appreciated.
(current funds are VTSAX, VTIAX and Vanguards total bond fund)
I'm retiring June 1. My wife and have pensions to cover our basic needs. Currently have about 275k in Vangaurd with an AA of 60 stock and 40 bonds: an allocation I would like to maintain. Another 625k in stable employee accounts (principle protected/tax deferred) which are earning about 1.75% and 3% respectively. Money available for transfer to Vanguard accounts after I retire. We plan to withdraw about 2% a year for the purpose of travelling . I also maintain about 40k in cash savings.
With the concerns about bonds, it occurred to me if - rather than move 40% of that additional 625k into bonds, I left that percentage in the 3% account, it would be earning a similar (better?) yield than bonds without the risk of losing principle when the QEs end and interest rates began rising. The other 60% would go into stock funds.
I could make withdrawals from the taax deferred accounts as needed, if stocks dropped. If appropriate, down the road, I could transfer that money into bond funds when bond futures did not look so dismal.
I'd like to ask everyone's thoughts on this strategy. Any negative points I might be missing?
All thoughts appreciated.
(current funds are VTSAX, VTIAX and Vanguards total bond fund)
Last edited: