Investing During Retirement

Best Two Pages You Can Read about Immediate Fixed Annuities

jagor — Fri, 20 Nov 2009 07:26:25 GMT

Anybody who is already retired, approaching retirement or even planning for retirement should read this excellent two-page article by Kipllinger columnist Steven Goldberg entitled "Buy a Pension with an Immediate Annuity."

He manages, in less than two pages, to explain the whole concept of immediate fixed annuties (IFA's) in plain English that is comprehensible to anybody.

It will take you less than five minutes to read this article and that five minutes could spell the difference between a comfortable retirement or a squalid existence of dumpster-diving for half-eaten BigMacs.

Read it! http://tiny.cc/KiplingerAnnuityArticle

Jagor

Internation Allocation In Retirement

JFSHW47 — Fri, 20 Nov 2009 18:17:23 GMT

I am 63 and retiring at the end of the year. I have reviewed various conservative portfolios, both Morningstar Wealth Keeper, and Bob Brinker's Marketimer Portfolio #3, and both seem to suggest approximately 6% in International Funds.

Please let me know your opinion, based on a retirement allocation.

Thanks

Jim

Suitable Retirement Portfolio?

dfred495 — Thu, 12 Nov 2009 02:52:11 GMT

I am 70 years old and fully retired. My pensions and social security cover all of my current living and leisure expenses. At this stage of my life I am very risk averse and have set up a very conservative portfolio that luckily did not produce a loss in 2008. My primary concern is capital preservation and to stay ahead of inflation, capital accumulation is secondary.

I would appreciate any comments or suggestions from members of this forum. Am I too conservative?

Here is my current portfolio:

Berwyn Income (BERIX) 6.7%

Fidelity Ginnie Mae (FGMNX) 10.7

FPA Crescent (FPACX) 6.9

Greenspring (GRSPX) 4.5

Harbor Bond (HABDX) 10.7

IVA Worldwide (IVWIX) 6.7

Mathews Asian G&I (MACSX) 3.4

Oakmark E&I (OAKBX) 6.8

SIT US Gov't Securities (SNGVX) 9.9

T Rowe Price Short Term Bond (PRWBX) 21.8

TCW Total Return Bond (TGLMX) 10.6

Cash 1.3

The M* Instant X-Ray Asset Allocation is as follows:

Cash 17%

US Stocks 9

Foreign Stocks 6

Bonds 64

Other 4

Thanks again for your assitance.

International Allocation In Retirement

JFSHW47 — Fri, 20 Nov 2009 18:17:31 GMT

Please let me know your opinion, based on a retirement allocation.

Thanks

Jim

Take SS @ age 62, vs 66?

Limoman — Fri, 20 Nov 2009 15:21:48 GMT

being an Andy Rooney ( 60 min TV show) Advocate..

Seems to me , taking your SS @ age 62 is a better Bet vs waiting longer..

That is, if My Figures are correct or even close..

1. Get $10k yr SS at Age 62 vs $13k yr at age 66..

2. If making the past 10 yrs apy of 9.16% on just bonds and Putting that $10k yr into your Roth or tax deferred account

3. I figured you'd have about $50k By age 66 saved up..

4. It keeps making that 9.16% apy and your Making an additional $4,580 yr on it + your $10k yr = $14,580 yr

5. And you have that $50k in your Greedy Little Hands for emergencies or to leave to the Wife to go to the Casino's with her Friends after your gone.. or to your Kids to go buy a New Car, Boom Box and Big Screen TV or Go take a trip to Disneyworld.. every yr on that $4,500 bucks it makes for them..

And think your going to live longer than the Ave of age 82 is a Pipe dream.. and most that do? End up in either a NHome their last couple of yrs or Being a shut in , in their own homes, having Hospice take care of you .

make sense?

and makes more sense to have our SS tax Indexed per Inflation and not this fixed rate business. I figure it should have been over Double what is is now after the past 28 yrs and not that 7.5% and the same for Employers..we have now..

But Wall Street and the Gov't doesn't want Us to have to save More and have Less to Spend.. We have less in our payroll cks to spend and support Wall Street and all those who make their Living from it and IRS would have Less Taxes Comming in and our Congress would have Less taxes to Spend.. or have to raise Payroll taxes and Other Taxes to fund their Spending habits..

I say, Take that SS owed you at age 62 and Invest it..Until you need it.. and don;t wait tilla ge 66 or later and buy that "it will be worth More" to you garbage if you wait longer..

What they are really afraid of? If we all took it at age 62 and since they Stoled so much of it in yrs past and it's all IOU's, SS would need a major Bail out and less $ for their Bailing out everyone else, including themselves...

Good deal for PenFed customers

NormanA61 — Sat, 21 Nov 2009 01:42:10 GMT

Penfed has a good deal for anyone with a CD coming due in Jan.

from Bankdeals/blog

For those who opened the 6.25% CDs three years ago that mature in January 2010, PenFed has a good deal for you. PenFed is offering the following roll-over CD rates:

4.25% APY 7 years
4.00% APY 5 years
3.50% APY 3 years

These rates are listed at PenFed's Certificates Reservation page as of 11/20/2009. The page states that this offer expires when $250 million has been reserved or on 1/31/2010.

Ten for the Money

yogibearbull — Sat, 21 Nov 2009 14:12:32 GMT

This week's Barron's (Nov 23, 2009) has a cover story on retirement income. It mentions how a portfolio of stocks alone can produce income.

STD, CVX, INTC, JNJ, MCD, NSRGY, NVS, PEP, PG, VZ

This group has dividend yields in range 2.8-6.2% for an average yield of 3.6%.

ABT, T, KO, EMR, LMT, MRK, MSFT, TEF, UTX, WMT

This group has yield range 1.7-6.3% with an average 3.4%.

SOME REFERENCE YIELDS:

SP 500 yield 2.2%

10-yr Treasury 3.37%

2-yr Treasury 0.72% (record low in Dec 2008 0.657%)

T-Bill yield was briefly negative.

Cash Flow Expectations?

kglenn718 — Tue, 17 Nov 2009 10:05:41 GMT

Hello, I'm a first time participant in the forum.

I'm trying to plan my retirement cash flow and would like opinions on what % I can safely assume. My goal is not to touch any of my investment principal so I can leave it to my children and live only on generated free cash flow. What do you think a safe % to forecast assuming low to moderate risk investments. Assume principal amount of $1.5 million.

Alternative to fixed annuity

rkculver — Sun, 08 Nov 2009 14:07:47 GMT

I am looking for thoughts on a strategy for income over a 13 year time period. I would normally consider a bridge immediate annuity or bond or CD ladders; but with returns so low, I wonder if there are other better options. This portfolio would be in addition to my other balanced portfolio.Safety is obviously very important, but I think I need more return than just CD's, MM, etc. I was considering things such as Vanguard's Life Strategy [vasix] or Retirement Income [vtinx] with 1-2 years needs in the before mentioned CD or MM.

how to invest?

teedot — Thu, 19 Nov 2009 18:27:06 GMT

have 850,000 in cd's maturing in 5 days-need ideas on conservative investments better then 2% cd's-any ideas?

How to draw down retirement funds

tom1as — Wed, 18 Nov 2009 21:21:59 GMT

In one year, at 68, the income valve shuts off and I am on my own. Living expenses will be paid from my investments and SS. 60% of my funds are in a SEP, and the remainder are in taxable accounts.

My plan is to live off the taxable funds until I reach 70 1/2 and then augment the required withdrawls from the SEP with the taxable funds. Is this rational, and is there a better way?

Many thanks, Tom

Early retirement portfolio & medicare questions

barefootjan — Tue, 10 Nov 2009 16:13:27 GMT

At age 56 (him) and 54 (her) my husband & I find ourselves needing to structure our portfolio as if we were retired.

Oddly enough, we may need to draw down some of the money over the next 8 years, but after that we probably won't need much at all. The wild card being the costs of health insurance & health care.

Meanwhile our portfolio looks like this:

34% cash/MM
18% short-term bonds (Vanguard funds)
19% intermediate term bonds: Pimco Total Return Class (PTTAX.lw)
16% inflation-protected bonds
5% Vanguard High Yield Bond fund (VWEHX)
4% Vanguard GMNA fund (VFIIX)
4% Pimco Commodity real Return Strategy D (PCRDX)

We've had no stocks for about a year, so we temporarily took a little higher risk with our bonds instead. Luckily that worked in our favor, but now that our life is becoming more stable we want a more diversified, conservative, "set it & forget it" type portfolio. Up to 25% stocks; no more.

I've been thinking of using Vanguard Wellesley Income for the stock portion. I also plan to get rid of the Pimco Total Bond fund and go all Vanguard for the bonds.

Would greatly appreciate any input from experienced investors who've been in the withdrawal phase for awhile. Also if any of you are willing to share what you pay for Medicare/Medigap coverage, that would be a tremendous help in our planning.

Thanks,
Jan

RETIREE: SHOULD I REBALANCE NOW OR WAIT TILL LATER?

Fundscan — Mon, 16 Nov 2009 18:32:06 GMT

My spouse & I are retirees and we entered the recession at a 30:70 stock funds:fixed accounts ratio in our accounts.

I treat our retirement accounts and one joint taxable account as one overall portfolio when determining the stock funds:fixed accounts ratio.

In April 2009, after the downturn of 08/09, I rebalanced back up to 30:70 for the overall portfolio. The stock fund portion had plummeted, but the fixed accounts kept providing interest with no declines.

I just calculated the overall portfolio and determined that we are already at a 40:60 ratio of stock funds:fixed accounts.

What are your thoughts about rebalancing back down to a retirees' 30:70 ratio to take advantage of saving some profits?

Or should I let it ride by keeping the stock funds at their current funding to take advantage of more growth?

Back in my casino days (a couple of decades or so ago), I would not only let it ride, but would have pressed (invested additional funds). Now that I'm 68, things look a little different.

I got the idea for a 30:70 ratio from Morningstar in their book,

MORNINGSTAR GUIDE TO MUTUAL FUNDS which discusses a wealth keeper portfolio of 35:65.

RettW2 -- your charts?

barefootjan — Sun, 15 Nov 2009 23:01:07 GMT

In this thread

http://socialize.morningstar.com/NewSocialize/forums/p/248127/2730786.aspx#2730786

you did a chart for my old investment plan. Can you do that again, or tell me where I can do something like that myself? I have a new plan and I'd like to see how it compares to the old one.

Here's the new plan, in case you want to mess around with it yourself (100% tax-deferred):

5% PCRDX - Commodities

6% VFIIX - Ginnie Mae

8% VWEHX - High-yield bond

15% PTTRX - Pimco Total Return bond

17% VBISX - Short-term bond index

49% VWIAX - Wellesley Income

Thanks.
Jan

question about paying off mortgage

librarian — Tue, 17 Nov 2009 03:43:49 GMT

Should one payoff a mortgage before retirement? I have read arguments for both sides. What are the questions I should be asking myself. Yes, I do have the cash, but am hesitant to spend the money. Thanking you in advance.

Investing at age 90

marv211 — Tue, 08 Sep 2009 23:59:13 GMT

I am a retired MD and have lost over half of our nest egg investing with a friend broker with Morgan Stanley who had us in various income producing preferred financial stocks. We sold it all as we reached the point of no return at which our social security, small retirement check and 50,000 from our 500,000 current nest egg. At age 90 we have enough to last till we reach 100. At present all is invested in no risk CDs at 2 and 2.3 % maturing in December '09 and March '10. We would like to leave a bit to our two children. Our home was valued at about $800,000 two years ago and there is no mortgage. Does anyone have a good, very low, almost no risk idea of a portfolio that could help us do a bit better?

Conservative retirement portfolio

barefootjan — Fri, 13 Nov 2009 18:49:01 GMT

Hi,

I separated this from my earlier post because it was going in all different directions.

Does anyone see anything wrong with the following conservative retirement portfolio? Any suggested improvements?

60% Vanguard Wellesley Income

15% inflation-protected bonds

15% Vanguard Short-term bond index

10% Cash

THANKS!

Jan

Social Security question for surviving spouse

Jeannette10 — Mon, 16 Nov 2009 00:53:21 GMT

I have researched the Social Security government website and I can't seem to find the answer to this simple question.

Let's say the husband is getting social security benefits of $1500. The wife is 62 years old, no longer working but not collecting social security benefits. If she were to collect at age 62, she'd get only $1000.

In case the husband dies, can the wife receive 1/2 of her husband's social security benefits until she reaches the full retirement age (66), at which time, she could get a higher monthly benefit? Or does she have to switch to her own benefits immediately after her husband's death, even though she has not reached full retirement age (66).

Thank you for anyone who knows the answer.

Jeannette

"Life is non-linear: Structured retirement portfolios for the long haul"

norbertc — Thu, 12 Nov 2009 12:41:03 GMT

The article - summarized HERE - analyzes six retirement asset allocation strategies:

Benchmark: 40% U.S. large-cap stocks and 60% U.S. Treasury bonds.
Smoothed consumption: the benchmark allocation with constant, inflation-adjusted spending (unlike the chart below).
Delayed retirement: the benchmark allocation with retirement delayed by two years.
Stacked portfolio: next five years of cash flow covered by nearly risk-free assets (e.g. certificates of deposit) and the balance 60% in U.S. large-cap stocks and 40% in U.S. Treasury bonds.
Fixed annuity and growth portfolio: roughly half of initial allocation in an inflation-adjusted, fixed annuity and the balance 60% in U.S. large-cap stocks and 40% in U.S. Treasury bonds.
Variable annuity and growth portfolio: same as fixed annuity allocation, but with a variable rather than fixed annuity.

The author is Joachim Klement at UBS Wealth Management Research.

Depending on whether we take an opimistic (5%), median, or pessimistic (95%) view of future market returns, these six strategies would offer very different relative withdrawal rates. The table below is for an individual with a $1M retirement nest egg and a 15% average tax rate.

(click to enlarge)

The entire "Life is non-linear" article can be downloaded from HERE.

A key conclusion of the paper is that a stacked portfolio - that keeps five years worth of cash-flow needs in essentially zero-risk assets while keeping the rest in a more growth-oriented portfolio - offers the best long-term withdrawal rate assuming optimistic or median market performance expectations.

FWIW.

Norbert

International Balanced Mutual Funds

james57 — Sun, 08 Nov 2009 11:15:01 GMT

I am in the process of putting together a portfolio of bond funds and balanced stock/bond funds. My problem is in finding international balanced mutual funds to add to this portfolio.

Since i am a small investor, initial purchase of less than $10000 is required. ALso i am looking for no load types without redemtion fees added. My purchase would be thru Scottrade. There are so many different share classes it becomes somewhat confusing.

I would appreciate help from any other small investors who have already researched this area of the market. Thanks much in advance.

Jim

NEW YORK LIFE - 3 YR ANNUITY

BRIANL — Fri, 06 Nov 2009 18:37:09 GMT

It has been proposed to me by a Fidelity Investments advisor to invest in the New York Life 3 year "annuity" with a guaranteed 3% return as an alternative to retaining the monies in a money market with a .2% return. This doesn't appear to be structured as a normal annuity and my alternative is to investigate the use of an ETF in the worldwide currencies sector.

Any ideas or experiences?

Identify Theft

DaveLee — Mon, 12 Oct 2009 11:55:14 GMT

My apologies for abusing this board, but lots of helpful and smart people hang out here....

My 80+ year old Mom just had her wallet stolen (and it included her SS number). She has taken all the right steps regarding credit cards, checking acct, etc. But she is the poster child for identify theft at this point.

I really don't know a solution other than to pay for a service like www.lifelock.com . If you really know all the systems, all the credit agencies, all the 'how big is the all the..', etc. maybe you could do this yourself.

Is there a better answer here? If it were one centralized rating agency, I can imagine a do-it-yourself path. But even the big-three is not the whole story (from just a credit perspective, and there are many more perspectives to worry about).

Thanks.

dave

Half in Vanguard Wellsley and half in Wellington.

equity1 — Thu, 08 Oct 2009 13:22:09 GMT

I will be retiring very soon and my advisor suggested put half in Van Wellsley and the other half in Van Wellington which would give me approx 50/50 AA. Anyone tried this or have any thoughts if it might work in an effort to create the income yield while reasonable chance for some growth. Thanks

AARP and Healthcare Reform

DaveLee — Thu, 05 Nov 2009 20:11:33 GMT

Honest - this is NOT intended to be "debate bait". But I do have a single question (that I hope doesn't get side-tracked into a healthcare reform debate).

This is a quote from the CEO of AARP

We can say with confidence that it (current healthcare legislation) meets our priorities for protecting Medicare, providing more affordable health insurance for 50- to 64-year-olds and reforming our health care system," LeaMond said in a briefing for reporters.

The item in italics added by me and the item in bold is the question.

What is it in the current legislation that protects Medicare? All that I have seen is that they will be making some major cuts in Medicare funding by reducing subsidies to the Advantage plans and the always popular, never implemented reduction in waste and fraud.

Where are they coming from here? I just don't get it (and I AM NOT taking a position on healthcare reform here - I just don't understand where AARP is coming from).

dave

Jason Zweig Articles & Books to Pass on down

Limoman — Fri, 06 Nov 2009 13:08:49 GMT

Some Books and Articles you may want to Pass on Down the Family Tree for your Kids, Nephews,Nieces etc.

Jason Zweig Articles & Advice: Learn How to Become a Better Investor

Jason Zweig's Books: Read About Benjamin Graham and The Intelligent Investor

The Little Book of Safe Money: How to Conquer Killer Markets, Con Artists, and Yourself

Quote: The Little Book of Safe Money acts as a guide for those trying to make their way through today's down markets. The topics covered include everything from investing behavior-why our minds come with their own set of biases that often prove harmful-to the use of financial advisors. But this timely book goes one step further than the rest by questioning an investor's true appetite for risk.