My mother is retiring in one year. Looking for help optimizing her portfolio.

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jomama341
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My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

My mother is going to retire in January 2023 at the age of 65. Overall, she’s in great financial shape, but as she nears her retirement date, I figured it would be a good moment to take a look at her portfolio to see what she might want to tweak.

Disclaimer: my mom is not a Boglehead (her son is :wink: ), so as you’ll see she has a hodgepodge of different funds that were recommended to her over the years. Some have worked out well, others not so much. One of my main goals here is to simplify everything as much as possible. So, please be kind and know that I will probably agree with the consensus here and take it to heart.

Emergency funds: $30k (five months of living expenses)

Debt: Two mortgages on two different properties. The cost of these mortgages is already factored into her estimated spend, discussed further down.

Tax Filing Status: Married Filing Separately

Tax Rate: 24% Federal, 6.33% State

State of Residence: NY

Age: 64

Desired Asset allocation: Looking for advice on this specific point.

Her current portfolio is spread across two taxable accounts and five retirement accounts. The breakdown is as follows:

Taxable Account #1 (Chase)

18% Fidelity® Total Market Index (FSKAX)(0.015%)
9% Vanguard NY Long-Term Tax-Exempt Adm (VNYUX)(0.09%)
3.5% Putnam Ultra Short Duration Income A (PSDTX)(0.4%)
1% Utilities Select Sector SPDR® ETF (XLU)(0.1%)
5.5% Assortment of municipal bonds
2% Cash

Taxable Account #2 (Vanguard)

1% Vanguard FTSE Social Index Admiral (VFTAX)(0.1%)

403b #1 (Chase)

4.5% Vanguard Total Bond Market Index Adm (VBTLX)(0.5%)
13% Vanguard 500 Index Admiral (VFIAX)(0.04%)
2% Vanguard Total Intl Bd Idx Admiral (VTABX)(0.11%)
6% Vanguard Total Intl Stock Index Admiral (VTIAX)(0.11%)
2% Vanguard International Explorer Inv (VINEX)(0.39%)

403b #2 (TIAA)

5% Teachers Insurance And Annuity Association Of America - Real Estate Account Variable Annuity (QREARX)

403b #3 (Prudential)

2% Harbor Capital Appreciation Instl (HACAX)(0.67%)
7.5% Vanguard Instl Trgt Retire 2030 Instl (VTTWX)(0.09%)

Roth IRA (Chase)

7% Fidelity® Contrafund® (FCNTX)(0.86%)
5.5% Vanguard Total Stock Mkt Idx Adm (VTSAX)(0.04%)

Traditional IRA (Chase)

1.5% First Eagle Global A (SGENX)(1.11%)

Checking/Savings (Chase)

2% Cash

Portfolio total: $1.45mm

Approximate allocation:

US Equities: 51%
Int’l Equities: 12%
US Bonds: 26%
Int’l Bonds: 2%
Alternatives: 5%
Cash: 4%

When my mom retires, she will receive a taxable pension of approximately $2k per month. She will also be eligible after 1.5 years for social security, which will pay her another $2k per month.

She also owns shares in a large family business that should average ~$50k in post-tax distributions annually. However, the distributions may be irregular and could evaporate depending on the health of the business. Right now, the business is in very good shape, though.

Lastly, she has a non-trivial sum of equity in three residential real estate properties, she likely stands to inherit ~$250k down the road, and the family business shares are worth approximately $500k, but highly illiquid. For the purposes of this exercise, I’d like to disregard all of these assets.

She lives in a VHCOL area and all-in her monthly expenses come out to approximately $6k per month post-tax. With approximate taxes factored in, this comes out to roughly $99k per year. So, she will either have to withdraw ~$50k annually or, should the family business continue down its current course, she may not have to make any withdrawals and may even run at a slight surplus.

I don’t have a very specific question other than to see what she might want to consider doing with her portfolio to better position herself for retirement.

Immediately, off the top of my head: she should consolidate her accounts as much as possible, under the roof of one bank/brokerage, if possible. Secondly, there are a few funds in the mix with high expense ratios (SGENX, HACAX, FCNTX). She also seems to be weighted too heavily toward equities.

Apologies for the super long post. Thank you for making it this far and thanks in advance for any wisdom you might want to share!
Last edited by jomama341 on Fri Nov 26, 2021 4:58 pm, edited 5 times in total.
BarbBrooklyn
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by BarbBrooklyn »

I can tell you what I did in the year before retirement; I reduced my equity exposure to 30%, ran my SS numbers through Mike Piper's SS calculator to develop my optimal claiming strategy and lived very frugally when I first stopped working (market drop in December 2018 made me feel good about all this).

The danger of a 50% drop in equities always seems very real to me (having lived through 87, 2001, 2009...).

3 years down the road, I have 50% more in my accounts than I did on my retirement date, am 50% equities/ 50% guaranteed fixed municipal fund and we are enjoying spending more freely at about 4% per year.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
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JoeRetire
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by JoeRetire »

jomama341 wrote: Fri Nov 26, 2021 12:28 pm My mother is going to retire in January 2023 at the age of 65.

When my mom retires, she will receive a taxable pension of approximately $2k per month. She will also be eligible after 1.5 years for social security, which will pay her another $2k per month.
She should consider delaying her social security benefits until age 70.
See: https://opensocialsecurity.com/
She lives in a VHCOL area
Would she consider moving?
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

JoeRetire wrote: Fri Nov 26, 2021 1:20 pm
She should consider delaying her social security benefits until age 70.
See: https://opensocialsecurity.com/
That's something she is considering doing. Based on her SS statement, it seems like it would take 9 years for her to break even. I.e. once she turns 79, she'll start benefiting from the higher payment. Is this generally the recommended approach for a healthy retiree?
JoeRetire wrote: Fri Nov 26, 2021 1:20 pm Would she consider moving?
Probably not.
niagara_guy
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by niagara_guy »

I see she has several 403b accounts. Many (most?) of the 403b providers are very expensive and probably not honest (they rip people off). Could you post the names of the 403b providers and the fees they charge?

It would help if you use this format: viewtopic.php?f=1&t=6212

Yours is pretty close but does not include the expense ratio. For the non-403b accounts add any fees charged by the provider like AUM fees.

Most here like Vanguard, Fidelity and Schwab and I do too (have accounts at all 3). There are also others that are probably low cost as well but I am not familiar with them.

I did look up HACAX and it's expense ratio is 0.67% which is high. You can get similar funds at the 3 firms I mentioned for a much smaller expense ratio. I use index funds with low expenses (0.04% or so).

QREARX is a variable annuity (not recommended here).
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

niagara_guy wrote: Fri Nov 26, 2021 1:27 pm I see she has several 403b accounts. Many (most?) of the 403b providers are very expensive and probably not honest (they rip people off). Could you post the names of the 403b providers and the fees they charge?

It would help if you use this format: viewtopic.php?f=1&t=6212
Noted. I'll work on updating the original post.
Yours is pretty close but does not include the expense ratio. For the non-403b accounts add any fees charged by the provider like AUM fees.

Most here like Vanguard, Fidelity and Schwab and I do too (have accounts at all 3). There are also others that are probably low cost as well but I am not familiar with them.
Definitely steering her to putting everything under Vanguard, Schwab or Fidelity, although we may wait till she actually retires to make those changes.
I did look up HACAX and it's expense ratio is 0.67% which is high. You can get similar funds at the 3 firms I mentioned for a much smaller expense ratio. I use index funds with low expenses (0.04% or so).

QREARX is a variable annuity (not recommended here).
Got it. Fortunately, QREARX is in a tax advantaged account, so she can put it into an index fund without taking a tax hit.
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JoeRetire
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by JoeRetire »

jomama341 wrote: Fri Nov 26, 2021 1:25 pm
JoeRetire wrote: Fri Nov 26, 2021 1:20 pm
She should consider delaying her social security benefits until age 70.
See: https://opensocialsecurity.com/
That's something she is considering doing. Based on her SS statement, it seems like it would take 9 years for her to break even. I.e. once she turns 79, she'll start benefiting from the higher payment. Is this generally the recommended approach for a healthy retiree?
Is there a reason she wouldn't live past 79?
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retire2022
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by retire2022 »

jomama341 wrote: Fri Nov 26, 2021 1:32 pm
I did look up HACAX and it's expense ratio is 0.67% which is high. You can get similar funds at the 3 firms I mentioned for a much smaller expense ratio. I use index funds with low expenses (0.04% or so).
Jomama341

I concur with niagara_guy Habor Capital Appreciation is an actively managed fund, what other options are in your mother's plan?
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

retire2022 wrote: Fri Nov 26, 2021 2:26 pm
jomama341 wrote: Fri Nov 26, 2021 1:32 pm
I did look up HACAX and it's expense ratio is 0.67% which is high. You can get similar funds at the 3 firms I mentioned for a much smaller expense ratio. I use index funds with low expenses (0.04% or so).
Jomama341

I concur with niagara_guy Habor Capital Appreciation is an actively managed fund, what other options are in your mother's plan?
Will find out and update the post ASAP.
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

JoeRetire wrote: Fri Nov 26, 2021 2:23 pm
jomama341 wrote: Fri Nov 26, 2021 1:25 pm
JoeRetire wrote: Fri Nov 26, 2021 1:20 pm
She should consider delaying her social security benefits until age 70.
See: https://opensocialsecurity.com/
That's something she is considering doing. Based on her SS statement, it seems like it would take 9 years for her to break even. I.e. once she turns 79, she'll start benefiting from the higher payment. Is this generally the recommended approach for a healthy retiree?
Is there a reason she wouldn't live past 79?
No reason per se, but life is obviously unpredictable.
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JoeRetire
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by JoeRetire »

jomama341 wrote: Fri Nov 26, 2021 5:07 pm
JoeRetire wrote: Fri Nov 26, 2021 2:23 pm
jomama341 wrote: Fri Nov 26, 2021 1:25 pm
JoeRetire wrote: Fri Nov 26, 2021 1:20 pm
She should consider delaying her social security benefits until age 70.
See: https://opensocialsecurity.com/
That's something she is considering doing. Based on her SS statement, it seems like it would take 9 years for her to break even. I.e. once she turns 79, she'll start benefiting from the higher payment. Is this generally the recommended approach for a healthy retiree?
Is there a reason she wouldn't live past 79?
No reason per se, but life is obviously unpredictable.
Of course life is unpredictable. It doesn't need to be predictable to make good choices.

If you make plans for living a long life, the worst thing that happens is you die with leftover money.
If you make plans for a short life, the worst thing that happens is you are old and poor.

In the US, the average life expectancy of a 64 year old woman is 21 additional years.
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dbr
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by dbr »

jomama341 wrote: Fri Nov 26, 2021 1:25 pm

That's something she is considering doing. Based on her SS statement, it seems like it would take 9 years for her to break even. I.e. once she turns 79, she'll start benefiting from the higher payment. Is this generally the recommended approach for a healthy retiree?
The argument for delaying SS is not breakeven but insuring against longevity risk. Imagining that someone age 64 will not live past 79 is taking a risk that can be offset to some degree by delaying SS.
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

dbr wrote: Sat Nov 27, 2021 9:11 am
jomama341 wrote: Fri Nov 26, 2021 1:25 pm

That's something she is considering doing. Based on her SS statement, it seems like it would take 9 years for her to break even. I.e. once she turns 79, she'll start benefiting from the higher payment. Is this generally the recommended approach for a healthy retiree?
The argument for delaying SS is not breakeven but insuring against longevity risk. Imagining that someone age 64 will not live past 79 is taking a risk that can be offset to some degree by delaying SS.
Pardon my ignorance, but when you say “longevity risk”, you mean the possibility that she lives a very long time and her savings start to dry up?
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WoodSpinner
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by WoodSpinner »

OP,

I noticed she is MFS for taxes. Wondering what the rationale is behind this? It might be a factor in the SS claiming strategies.

What does she want Retirement to look like for her? It’s hard to give advice without a good foundation on what her goals are?

WoodSpinner
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dbr
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by dbr »

jomama341 wrote: Sat Nov 27, 2021 9:19 am
dbr wrote: Sat Nov 27, 2021 9:11 am
jomama341 wrote: Fri Nov 26, 2021 1:25 pm

That's something she is considering doing. Based on her SS statement, it seems like it would take 9 years for her to break even. I.e. once she turns 79, she'll start benefiting from the higher payment. Is this generally the recommended approach for a healthy retiree?
The argument for delaying SS is not breakeven but insuring against longevity risk. Imagining that someone age 64 will not live past 79 is taking a risk that can be offset to some degree by delaying SS.
Pardon my ignorance, but when you say “longevity risk”, you mean the possibility that she lives a very long time and her savings start to dry up?
Yes, exactly. And the reason SS is a good offset for that is the inflation indexing, which can't be obtained with regular fixed annuities and the fact that the benefits increase at high rate over the years age 62- age 70.
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by leo383 »

Your mom is crushing it.

Maybe delay SS until 70.

Maybe roll those 403b accounts all into one trad IRA or a trad IRA then move them to Roths with vanguard fidelity or schwab.

Nothing really emergent imo.
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

WoodSpinner wrote: Sat Nov 27, 2021 9:30 am OP,

I noticed she is MFS for taxes. Wondering what the rationale is behind this? It might be a factor in the SS claiming strategies.

What does she want Retirement to look like for her? It’s hard to give advice without a good foundation on what her goals are?

WoodSpinner
Without delving into the specifics, my understanding for why she is MFS has to do with disagreements she’s had in the past with her spouse surrounding their taxes back when they filed jointly. I’m not sure there’s any way to resolve those differences. Their finances are only really commingled on the real estate side of things. Beyond that, all of my mother’s assets are in her name only.

Can you elaborate on how the MFS status might impact her SS?

And as far as how she wants her retirement to look, I think the easiest way to think about it is that she wants to preserve her current lifestyle without having to worry about her finances at all. She’s not planning to make any major changes to her lifestyle once she retires, so the $72k of after-tax living expenses I cited in the original post is a pretty good barometer to go off of.
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

leo383 wrote: Sat Nov 27, 2021 10:22 am Your mom is crushing it.

Maybe delay SS until 70.

Maybe roll those 403b accounts all into one trad IRA or a trad IRA then move them to Roths with vanguard fidelity or schwab.

Nothing really emergent imo.
When you say “move them to Roths”, are you referring to the Roth conversion ladder strategy?
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by leo383 »

[/quote]

When you say “move them to Roths”, are you referring to the Roth conversion ladder strategy?
[/quote]

https://www.investopedia.com/roth-ira-c ... es-4770480

It depends a lot on her tax/life expectancy/etc. situation and ambition level, but she could transfer the 403b accounts to vanguard or wherever into one traditional IRA account, then over time transition the traditional ira to a Roth IRA.

It may or may not be worth doing. Depends a lot on her situation.
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by Taylor Larimore »

jomama341:

Your mother is approaching retirement which is an excellent time for a professional review of her finances. It is dangerious and in this case, unnecessary for you to act as an advisor. You are not as qualified as an independent advisor, but more important, whatever you recommend will have periods of underperformance and you will be/feel to blame. I would not undertake that responsibility if you do not need to.

Consider Vanguard PAS which is an excellent value at 0.3%/year. Also, Allan Roth and Rick Ferri are two excellent fee-only Boglehead advisors.

Best Wishes
Taylor
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by WoodSpinner »

jomama341 wrote: Sat Nov 27, 2021 10:27 am
WoodSpinner wrote: Sat Nov 27, 2021 9:30 am OP,

I noticed she is MFS for taxes. Wondering what the rationale is behind this? It might be a factor in the SS claiming strategies.

What does she want Retirement to look like for her? It’s hard to give advice without a good foundation on what her goals are?

WoodSpinner
Without delving into the specifics, my understanding for why she is MFS has to do with disagreements she’s had in the past with her spouse surrounding their taxes back when they filed jointly. I’m not sure there’s any way to resolve those differences. Their finances are only really commingled on the real estate side of things. Beyond that, all of my mother’s assets are in her name only.

Can you elaborate on how the MFS status might impact her SS?

And as far as how she wants her retirement to look, I think the easiest way to think about it is that she wants to preserve her current lifestyle without having to worry about her finances at all. She’s not planning to make any major changes to her lifestyle once she retires, so the $72k of after-tax living expenses I cited in the original post is a pretty good barometer to go off of.
In terms of SS planning for a married couple, typically it’s better for the higher earner to delay to 70 and the lower to claim before FRA. This aspect should definitely be planned as a couple—assuming they are living together and aren’t planning to separate.

In terms of Retirement Goals, typically we look at aspects like:
- Extra Travel and/or other Experiences
- Any plans to relocate?
- Long Term Care
- Charity
- Inheritance

Lastly, MFS for a couple living together is usually less than optimal from a Tax perspective. Might be time to review the impact with her to see if she wants to shift.

WoodSpinner
WoodSpinner
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

Taylor Larimore wrote: Sat Nov 27, 2021 12:55 pm jomama341:

Your mother is approaching retirement which is an excellent time for a professional review of her finances. It is dangerious and in this case, unnecessary for you to act as an advisor. You are not as qualified as an independent advisor, but more important, whatever you recommend will have periods of underperformance and you will be/feel to blame. I would not undertake that responsibility if you do not need to.

Consider Vanguard PAS which is an excellent value at 0.3%/year. Also, Allan Roth and Rick Ferri are two excellent fee-only Boglehead advisors.

Best Wishes
Taylor
Jack Bogle's Words of Wisdom: "Tens of millions of investors need personal guidance in allocating their assets and selecting funds. Other tens of millions do not."
Thanks for your perspective, Taylor. I appreciate it. In all honesty, my relationship with my mom is such that we both feel completely comfortable with me advising her on this matter, but I understand your concerns. I'll take a look at Vanguard PAS, Allan Roth and Rick Ferri, though.
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

WoodSpinner wrote: Sat Nov 27, 2021 3:05 pm
In terms of SS planning for a married couple, typically it’s better for the higher earner to delay to 70 and the lower to claim before FRA. This aspect should definitely be planned as a couple—assuming they are living together and aren’t planning to separate.

In terms of Retirement Goals, typically we look at aspects like:
- Extra Travel and/or other Experiences
- Any plans to relocate?
- Long Term Care
- Charity
- Inheritance

Lastly, MFS for a couple living together is usually less than optimal from a Tax perspective. Might be time to review the impact with her to see if she wants to shift.

WoodSpinner
Her spouse is 15 years older than her and has already been collecting SS for a while now, so the strategy you proposed isn't really an option, unfortunately. As I mentioned before, their finances are relatively minimally commingled, so for our purposes here, we're more or less treating my mom's financial situation independently from her spouse's. Probably not ideal from an efficiency standpoint, but that's just the way it is I'm afraid.

I'll review the bullet points you mentioned with her. I do know she doesn't have any plans to relocate. Inheritance should be pretty straightforward as I am her only child and will likely inherit the majority, if not entirety, of her estate.
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illumination
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by illumination »

jomama341 wrote: Sat Nov 27, 2021 5:02 pm
WoodSpinner wrote: Sat Nov 27, 2021 3:05 pm
In terms of SS planning for a married couple, typically it’s better for the higher earner to delay to 70 and the lower to claim before FRA. This aspect should definitely be planned as a couple—assuming they are living together and aren’t planning to separate.

In terms of Retirement Goals, typically we look at aspects like:
- Extra Travel and/or other Experiences
- Any plans to relocate?
- Long Term Care
- Charity
- Inheritance

Lastly, MFS for a couple living together is usually less than optimal from a Tax perspective. Might be time to review the impact with her to see if she wants to shift.

WoodSpinner
Her spouse is 15 years older than her and has already been collecting SS for a while now, so the strategy you proposed isn't really an option, unfortunately. As I mentioned before, their finances are relatively minimally commingled, so for our purposes here, we're more or less treating my mom's financial situation independently from her spouse's. Probably not ideal from an efficiency standpoint, but that's just the way it is I'm afraid.

I'll review the bullet points you mentioned with her. I do know she doesn't have any plans to relocate. Inheritance should be pretty straightforward as I am her only child and will likely inherit the majority, if not entirety, of her estate.

As long as you're figuring out her retirement strategy, you might want to get her estate plan in order if she's open to that. If there's an understanding the finances are separated and the spouse has their own assets (and likely intends to have different heirs) you might want to get all that nailed down. Especially if there's a family business in the mix and multiple properties. I've just known people where this goes sideways.

On the retirement accounts, any fund that has an expense ratio of over a .09%, you should probably find an alternative. Putting everything in the Traditional IRA would probably make a lot of sense in streamlining during RMD stages and more fund choices.
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by nedsaid »

The original poster did a very good job of laying out his or her mother's finances and asking for comments. I want to commend the OP for not waiting until after the fact before asking for a review.

I would echo Taylor's comments, this would be a good opportunity to seek a professional review of her finances. Vanguard Personal Advisor Services would be a good choice, the advisor could handle the rollovers, set up the portfolio, and create a systematic withdrawal strategy. Rick Ferri or Alan Roth would be excellent choices for an independent Advisor, my suspicion is that both are probably booked up. There are other good and lower cost alternatives available.
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jomama341
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by jomama341 »

nedsaid wrote: Sun Nov 28, 2021 9:42 am The original poster did a very good job of laying out his or her mother's finances and asking for comments. I want to commend the OP for not waiting until after the fact before asking for a review.

I would echo Taylor's comments, this would be a good opportunity to seek a professional review of her finances. Vanguard Personal Advisor Services would be a good choice, the advisor could handle the rollovers, set up the portfolio, and create a systematic withdrawal strategy. Rick Ferri or Alan Roth would be excellent choices for an independent Advisor, my suspicion is that both are probably booked up. There are other good and lower cost alternatives available.
Thanks. We're definitely going to look into Vanguard PAS. At $750/year on a $1mm portfolio, it seems pretty reasonable.

As an aside, I'd be very curious for everyone's opinion on what sort allocation would be appropriate for my mom. I'm inclined to just rebalance her portfolio to broadly reflect the allocation in Vanguard's 2020 or 2025 target date funds, but curious if anyone thinks that doesn't make sense for whatever reason.

Another question I have is whether she should factor rising inflation into her decision making at all. Or does the traditional 3-4 fund portfolio already account for that?
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by nedsaid »

jomama341 wrote: Sun Nov 28, 2021 11:22 am
nedsaid wrote: Sun Nov 28, 2021 9:42 am The original poster did a very good job of laying out his or her mother's finances and asking for comments. I want to commend the OP for not waiting until after the fact before asking for a review.

I would echo Taylor's comments, this would be a good opportunity to seek a professional review of her finances. Vanguard Personal Advisor Services would be a good choice, the advisor could handle the rollovers, set up the portfolio, and create a systematic withdrawal strategy. Rick Ferri or Alan Roth would be excellent choices for an independent Advisor, my suspicion is that both are probably booked up. There are other good and lower cost alternatives available.
Thanks. We're definitely going to look into Vanguard PAS. At $750/year on a $1mm portfolio, it seems pretty reasonable.

As an aside, I'd be very curious for everyone's opinion on what sort allocation would be appropriate for my mom. I'm inclined to just rebalance her portfolio to broadly reflect the allocation in Vanguard's 2020 or 2025 target date funds, but curious if anyone thinks that doesn't make sense for whatever reason.

Another question I have is whether she should factor rising inflation into her decision making at all. Or does the traditional 3-4 fund portfolio already account for that?
Using a Target Date Fund or a LifeStrategy Fund as a template for your mom's portfolio is actually a very good idea. I have used Target Date and Target Risk portfolios as a template for my own portfolio for years.

As far as how to deal with rising inflation, that is a difficult topic. Indeed, I posted a lot on 2-3 threads expressing my own uncertainties on the topic. If you decide to go with the Vanguard Personal Advisor Service, just do what the advisor recommends.
A fool and his money are good for business.
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Re: My mother is retiring in one year. Looking for help optimizing her portfolio.

Post by abuss368 »

Taylor Larimore wrote: Sat Nov 27, 2021 12:55 pm jomama341:

Your mother is approaching retirement which is an excellent time for a professional review of her finances. It is dangerious and in this case, unnecessary for you to act as an advisor. You are not as qualified as an independent advisor, but more important, whatever you recommend will have periods of underperformance and you will be/feel to blame. I would not undertake that responsibility if you do not need to.

Consider Vanguard PAS which is an excellent value at 0.3%/year. Also, Allan Roth and Rick Ferri are two excellent fee-only Boglehead advisors.

Best Wishes
Taylor
Jack Bogle's Words of Wisdom: "Tens of millions of investors need personal guidance in allocating their assets and selecting funds. Other tens of millions do not."
Hi Taylor -

This has been my journey as well in life. Years ago I would offer and inject myself into friends and relatives personal finances and investments. I too learned the best approach was hands off. While answering a question here or there is fine (if navigated in a nice manner) I will not roll up my sleeves or get involved any longer.

I have recommended Vanguard PAS to family who have engaged them and could not be happier. As a side benefit, I could not be happier either.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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