Retirement portfolios

[K Frame]

We'll be his financial advisers, and he'll like it!

And charge suspiciously high fees...

[MillCreek]

Minimum investment on the Wellesley Income Fund Admiral shares is $50,000.

I ran into that with one of my income fund investments. I wanted to convert to Admiral shares, and was going to move some money around to get to what I thought was the minimum threshold... until I realized the minimum was $50k.

I was trying to move $ 108,000 and received an error message that 'this particular fund is not available for that trade'.  I have noticed some funky things about a self-directed Merrill account: you cannot, for example, make many exchanges directly.  You have to sell fund one and then buy fund two.  So two different steps that take two days to execute.  Some funds are seemingly not available and yet are open to new investors.  Merrill clearly must give different levels of service to a solo investor vs. a broker buying on behalf of someone.  When I have called support about some of these matters, the standard line is 'your request is not available in a self-directed account'.

[MillCreek]

We'll be his financial advisers, and he'll like it!

I figure that between my legal and MBA training (especially the MBA) and my research skills, I can do as good a job as a financial adviser for my own accounts.  I am certainly cheaper and do not incur an hourly fee or churn for commissions.  I do a lot of reading on the topic to educate myself.

[K Frame]

"When I have called support about some of these matters, the standard line is 'your request is not available in a self-directed account'."

Yeah... That right there would have me noping right out of that company. Basically, if you want that fund, you have to go through their brokers, which means... PROFIT!

[MillCreek]

So after the latest round of transactions, the portfolio stands at:

47% TRRBX
36% VBIAX
17% VWINX

giving me approximately 56% equities, 42% bonds and 2% cash all told which is actually pretty close to the current glide path of the TRRBX. I am going to sit tight for a while and then do some rebalancing down the road, possibly increasing the percentage of VWINX.  Although one of the reasons I settled on this three fund recipe is it will largely be set and forget in terms of the TRRBX glide path changing to a higher percentage of bonds over time and the fixed asset allocations of the Vanguard funds. I just might tweak the relative percentages of each fund in the portfolio from time to time. Thanks for the suggestion on the Vanguard Wellesley.

Edited to add: I also received yesterday the annuity contract from New York Life. Payments of $ 1000/month start on June 17, 2021. If I die before the $ 202,400 premium is paid out in benefits, my wife gets the remainder as a lump sum.

[K Frame]

OMG! ALL THE WRONG CHOICES! YOU'RE GOING TO BE EATING RANCID CURRYWURST OUT OF A BOISE TRASHCAN IN WEEKS!

[Ben]

OMG! ALL THE WRONG CHOICES! YOU'RE GOING TO BE EATING RANCID CURRYWURST OUT OF A BOISE TRASHCAN IN WEEKS!

 

[MillCreek]

OMG! ALL THE WRONG CHOICES! YOU'RE GOING TO BE EATING RANCID CURRYWURST OUT OF A BOISE TRASHCAN IN WEEKS!

And lapping up the dregs of craft beers from a Boise gutter.

[K Frame]

My only thought would be that I'd want at least one global moderate growth index fund in that mix, may a total of 10%; 5% pulled from the two two holdings.

[Ron]

What percentage of the US stock market is actually global in nature?

With a large chunk of my money in the Schwab Total Stock Market Index Fund I’m pretty sure I have a fair amount of global exposure. It’s a Willshire 5000 fund like the famous Vanguard Total Stock Market Fund.

For years I had misc global funds and they always seemed to underperform.

They didn’t work well as a hedge either, they sunk with the US market and often sunk deeper.

[MillCreek]

What percentage of the US stock market is actually global in nature?

With a large chunk of my money in the Schwab Total Stock Market Index Fund I’m pretty sure I have a fair amount of global exposure.

For years I had misc global funds and they always seemed to underperform.

They didn’t work well as a hedge either, they sunk with the US market and often sunk deeper.

I have read some interesting arguments that given the amount of international sales and operations by US firms, holding stocks of US firms already gives you a degree of international exposure.  A lot of the Bogleheads really embrace this philosophy.

[K Frame]

"With a large chunk of my money in the Schwab Total Stock Market Index Fund I’m pretty sure I have a fair amount of global exposure."

Uhm... not in the sense that the market community uses global. From Squab... "Objective: The fund’s goal is to track the total return of the entire U.S. stock market, as measured by The Dow Jones U.S. Total Stock Market Index"

A global-based fund will have holdings in companies traded on any stock market in any country.

You have global exposure in the sense that all of the companies have international operations and international income streams, but the fund is not a global fund.

[K Frame]

If you want to see the composition of a fairly typical broad-based global fund, look at the Vanguard Global Equity Fund, VHGEX. https://investor.vanguard.com/mutual-funds/profile/portfolio/vhgex

[K Frame]

Oh, and I'm continuing to bat 100%.

It seems that no matter what I buy, when I buy it, any holding I invest in immediately drops in value.

Latest example, Vanguard Real Estate ETF (VNQ).

Bought it yesterday morning, and between yesterday and today it's down almost 4%.

Over the past 10 years I'm pretty sure that every time I've picked up a holding, whether a mutual fund or an individual stock, it's immediately gone on a losing streak. Fortunately, with the exception of the Vanguard Precious Metals and Mining fund, on which I ate a ton of *expletive deleted*it even as the overall sector was outperforming, everything has pretty much risen over time.

[Ron]

I guess my point was more that I gave up trying to find an international fund that performs as well as the US total stock market.

My international funds always under performed. I only held them because I was following expert advice.

That money has done much better in the US market since I reallocated it nearly a decade ago.

[K Frame]

Well that's because your US funds are steeped in the blood of those destroyed by the glories of Capitalism. And that always performs better than benevolent socialism...  because PROFIT! vs kumbayah...

[Ron]

MAGA!

Keep America Great!

[MillCreek]

MAGA: make assets grow again

[charby]

No offense to the hive mind, who seem well read and have interesting points, but do you not have a financial advisor?

Retirement funds are the kind of thing (IMHO) it's worth having a professional keep an eye on.

I do, I wanted to have 110% income replacement at retirement, so I needed to hire someone to help me do it. I'm still on track to retire between 62 and 63 years of age if I want to.

[zahc]

VBIAX and done.

[dogmush]

I do, I wanted to have 110% income replacement at retirement, so I needed to hire someone to help me do it. I'm still on track to retire between 62 and 63 years of age if I want to.

That's where Mrs. Mush and I are at, except we have more time. We want some more income after retirement so we can play, but we'd like to retire when we're young enough to play.

[charby]

That's where Mrs. Mush and I are at, except we have more time. We want some more income after retirement so we can play, but we'd like to retire when we're young enough to play.

I'm only 45

[MillCreek]

^^^I am 59.5 and my wife is 62.  The target retirement date is the summer of 2022, after my wife completes her 30th year as a teacher at age 65.  I may pull the plug earlier, I am pondering this.  Now that I am 59.5, I can start to pull money out of the 401(k) without the 10% tax penalty. 

If we had access to a decent health care plan at reasonable cost, we could both retire tomorrow.  An individual plan for both of us right now would cost between $2300 and 2800 per month (gold or silver plan from Premera).  If she works until 65, she is eligible for the school/state employee retirement medical plan that would also cover me.

[charby]

.  If she works until 65, she is eligible for the school/state employee retirement medical plan that would also cover me.

I know I'd be working until 65 for a benefit like that.

[dogmush]

I know I'd be working until 65 for a benefit like that.

I'd be even more excited about the wife working till 65 for a benefit like that. :D

We're hoping to retire in the 57-58 range, but medical insurance will be a huge driver on whether that happens.  There's enough elections between now and then I'm not getting too into the weeds on that planning.  We might all be on Solyent Green Medicare for all by then.