Questions about Portfolio Allocation and Location

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Cras108er
Posts: 47
Joined: Sun Jan 03, 2016 5:34 am

Questions about Portfolio Allocation and Location

Post by Cras108er »

Looking to retire soon. I am 61, spouse is 56. Have met with three different CFP’s. All say we have more than enough to retire (approx $3M, no mortgage, no debt) comfortably, plus a couple of government pensions.

Debating whether to go with Vanguard PAS. Definitely not putting everything under their management. Have approximately $600K (20% of our portfolio) at VG, and intend to match their recommendations elsewhere. The CFP recommends a 60/40 mix as follows:

STOCK
28% U.S. Large Cap
12% U.S. Mid/Small Cap
18% International
2% Individual

BOND
11% U.S. Short Term
14% U.S. Intermediate
3% U.S. Long Term
11% International

Do those sound about right for our situation?

Lastly, any benefit in rolling TSP to an IRA at VG (without putting it AUM)? The TSP and a 403B at Fidelity represent the rest (80%) of our portfolio. Any benefit to putting it all at VG for simplicity? Any suggestions are welcomed. Thanks!
000
Posts: 8211
Joined: Thu Jul 23, 2020 12:04 am

Re: Questions about Portfolio Allocation and Location

Post by 000 »

Have you thought about including TIPS (inflation-linked treasury bonds)?
exodusNH
Posts: 10350
Joined: Wed Jan 06, 2021 7:21 pm

Re: Questions about Portfolio Allocation and Location

Post by exodusNH »

Cras108er wrote: Wed Oct 20, 2021 11:05 pm Looking to retire soon. I am 61, spouse is 56. Have met with three different CFP’s. All say we have more than enough to retire (approx $3M, no mortgage, no debt) comfortably, plus a couple of government pensions.

Debating whether to go with Vanguard PAS. Definitely not putting everything under their management. Have approximately $600K (20% of our portfolio) at VG, and intend to match their recommendations elsewhere. The CFP recommends a 60/40 mix as follows:

STOCK
28% U.S. Large Cap
12% U.S. Mid/Small Cap
18% International
2% Individual

BOND
11% U.S. Short Term
14% U.S. Intermediate
3% U.S. Long Term
11% International

Do those sound about right for our situation?

Lastly, any benefit in rolling TSP to an IRA at VG (without putting it AUM)? The TSP and a 403B at Fidelity represent the rest (80%) of our portfolio. Any benefit to putting it all at VG for simplicity? Any suggestions are welcomed. Thanks!
No reason to hold individual stocks.

Anything that comprises less than 5-10% of your portfolio won't do much and just makes it needlessly more complicated.
000
Posts: 8211
Joined: Thu Jul 23, 2020 12:04 am

Re: Questions about Portfolio Allocation and Location

Post by 000 »

Rolling out of the TSP will cause you to lose access to some special funds not available elsewhere (like the G fund).
venkman
Posts: 1338
Joined: Tue Mar 14, 2017 10:33 pm

Re: Questions about Portfolio Allocation and Location

Post by venkman »

How much work do you want to do managing the portfolio? You could go all-in with Vanguard's 60/40 Lifestrategy Moderate Growth (VASGX), which would get you pretty close to the percentages recommended by your CFP (which look fine to me), and you'd never have to worry about managing or rebalancing. No PAS required.
BitTooAggressive
Posts: 1085
Joined: Tue Jul 13, 2021 3:15 pm

Re: Questions about Portfolio Allocation and Location

Post by BitTooAggressive »

venkman wrote: Wed Oct 20, 2021 11:21 pm How much work do you want to do managing the portfolio? You could go all-in with Vanguard's 60/40 Lifestrategy Moderate Growth (VASGX), which would get you pretty close to the percentages recommended by your CFP (which look fine to me), and you'd never have to worry about managing or rebalancing. No PAS required.
Yep, life strategy moderate growth.
secondopinion
Posts: 6011
Joined: Wed Dec 02, 2020 12:18 pm

Re: Questions about Portfolio Allocation and Location

Post by secondopinion »

exodusNH wrote: Wed Oct 20, 2021 11:09 pm
Cras108er wrote: Wed Oct 20, 2021 11:05 pm Looking to retire soon. I am 61, spouse is 56. Have met with three different CFP’s. All say we have more than enough to retire (approx $3M, no mortgage, no debt) comfortably, plus a couple of government pensions.

Debating whether to go with Vanguard PAS. Definitely not putting everything under their management. Have approximately $600K (20% of our portfolio) at VG, and intend to match their recommendations elsewhere. The CFP recommends a 60/40 mix as follows:

STOCK
28% U.S. Large Cap
12% U.S. Mid/Small Cap
18% International
2% Individual

BOND
11% U.S. Short Term
14% U.S. Intermediate
3% U.S. Long Term
11% International

Do those sound about right for our situation?

Lastly, any benefit in rolling TSP to an IRA at VG (without putting it AUM)? The TSP and a 403B at Fidelity represent the rest (80%) of our portfolio. Any benefit to putting it all at VG for simplicity? Any suggestions are welcomed. Thanks!
No reason to hold individual stocks.

Anything that comprises less than 5-10% of your portfolio won't do much and just makes it needlessly more complicated.
It depends on the risk skew on whether 2% makes sense. Two or three small caps can actually be meaningful to the performance (for good or bad). Either that or a single large-cap stock. You will not get rich, but it is not trivial if the selection size is small.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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patrick013
Posts: 3301
Joined: Mon Jul 13, 2015 7:49 pm

Re: Questions about Portfolio Allocation and Location

Post by patrick013 »

Cras108er wrote: Wed Oct 20, 2021 11:05 pm
STOCK
28% U.S. Large Cap
12% U.S. Mid/Small Cap
18% International
2% Individual

BOND
11% U.S. Short Term
14% U.S. Intermediate
3% U.S. Long Term
11% International

Do those sound about right for our situation?
Have you looked in the VG wiki for tax efficient allocation for your portfolio allocation ?
age in bonds, buy-and-hold, 10 year business cycle
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