Is Fidelity FFNOX for surviving spouse a good choice ?

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carminered2019
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Is Fidelity FFNOX for surviving spouse a good choice ?

Post by carminered2019 »

Wife is not very knowledgeable with investing so I am thinking of Fidelity FFNOX for her if I am no longer around ? Wife understands I will never be below 70% in equities and no max in equities as long as I set 10x-20x(Saving, I bonds, CD) for emergency.
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retired@50
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Re: Is Fidelity FFNOX for surviving spouse a good choice ?

Post by retired@50 »

carminered2019 wrote: Wed Aug 17, 2022 1:20 pm Wife is not very knowledgeable with investing so I am thinking of Fidelity FFNOX for her if I am no longer around ? Wife understands I will never be below 70% in equities and no max in equities as long as I set 10x-20x(Saving, I bonds, CD) for emergency.
With 10x - 20x in savings bonds, I bonds, and CDs, the remainder of the portfolio may not matter too much.

When you consider the "safe money" as fixed income, what is the overall allocation of the total portfolio?

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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carminered2019
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Re: Is Fidelity FFNOX for surviving spouse a good choice ?

Post by carminered2019 »

retired@50 wrote: Wed Aug 17, 2022 1:59 pm
carminered2019 wrote: Wed Aug 17, 2022 1:20 pm Wife is not very knowledgeable with investing so I am thinking of Fidelity FFNOX for her if I am no longer around ? Wife understands I will never be below 70% in equities and no max in equities as long as I set 10x-20x(Saving, I bonds, CD) for emergency.
With 10x - 20x in savings bonds, I bonds, and CDs, the remainder of the portfolio may not matter too much.

When you consider the "safe money" as fixed income, what is the overall allocation of the total portfolio?

Regards,
Currently 10x in FI puts us at 87/13 not counting my Real Estate(69X) which I will sell all within the next 5 years to put it in the markets. Is FFNOX a good choice or should I just put in Total US market instead and just keep 20x in FI for her.
the_wiki
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Re: Is Fidelity FFNOX for surviving spouse a good choice ?

Post by the_wiki »

It's only 16% Bonds, which seems pretty low for a retired Widow. But it looks like a solid diversified fund for someone who wants to hold a high stock ratio.

You may want to let her have some input on her risk comfort as it will be her money and she alone will have to live with the returns and risk. Most advisors are going to recommend a lot more bonds.
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retiredjg
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Re: Is Fidelity FFNOX for surviving spouse a good choice ?

Post by retiredjg »

carminered2019 wrote: Wed Aug 17, 2022 1:20 pm Wife is not very knowledgeable with investing so I am thinking of Fidelity FFNOX for her if I am no longer around ? Wife understands I will never be below 70% in equities and no max in equities as long as I set 10x-20x(Saving, I bonds, CD) for emergency.
I think this will be different for different spouses.

If I recall correctly FFNOX is a lovely fund...but it is 85% stock and 15% bonds. In a future downturn, it could easily lose 1/3rd of its value and maybe even half its value. More than that is not impossible, but seems improbable.

During the bad times, some spouses will look at their savings, I bond, CD accounts and say "I'm fine". Some spouses will be alarmed by the drop in the FFNOX and focus on that in spite of the fact that it does not matter.

If you are leaving a spouse enough money, there is no reason s/he should ever be alarmed. That would be a shame. Set up the portfolio so that will not happen. Whether that includes FFNOX is not is up to you to decide, based on what you know about your spouse.
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retired@50
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Re: Is Fidelity FFNOX for surviving spouse a good choice ?

Post by retired@50 »

carminered2019 wrote: Wed Aug 17, 2022 2:36 pm
retired@50 wrote: Wed Aug 17, 2022 1:59 pm
carminered2019 wrote: Wed Aug 17, 2022 1:20 pm Wife is not very knowledgeable with investing so I am thinking of Fidelity FFNOX for her if I am no longer around ? Wife understands I will never be below 70% in equities and no max in equities as long as I set 10x-20x(Saving, I bonds, CD) for emergency.
With 10x - 20x in savings bonds, I bonds, and CDs, the remainder of the portfolio may not matter too much.

When you consider the "safe money" as fixed income, what is the overall allocation of the total portfolio?

Regards,
Currently 10x in FI puts us at 87/13 not counting my Real Estate(69X) which I will sell all within the next 5 years to put it in the markets. Is FFNOX a good choice or should I just put in Total US market instead and just keep 20x in FI for her.
I think FFNOX is a fine low-expense, broadly diversified fund. Based on what you've shared, she'll be fine, assuming she's not one to worry during a market downturn.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
zie
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Re: Is Fidelity FFNOX for surviving spouse a good choice ?

Post by zie »

i agree FFNOX is great, the only thing I'd mention is it's not guaranteed to be tax-efficient, since it regularly dumps capital gains. If you are holding in a atxable account, AOA may be a better choice. It's slightly less equities (80% instead of 85%), but otherwise doesn't generally distribute capital gains, since it's an ETF. It's an iShares Core Allocation ETF, part of a family of fixed asset-allocation ETF's from 30% equities to 80%.

In tax-advantaged I happily hold FFNOX, in taxable I hold AOA.
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
invest2bfree
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Re: Is Fidelity FFNOX for surviving spouse a good choice ?

Post by invest2bfree »

carminered2019 wrote: Wed Aug 17, 2022 1:20 pm Wife is not very knowledgeable with investing so I am thinking of Fidelity FFNOX for her if I am no longer around ? Wife understands I will never be below 70% in equities and no max in equities as long as I set 10x-20x(Saving, I bonds, CD) for emergency.
Look into AOA, way better it is 80/20.

Tax efficient and quarterly dividends.

I would personally hold 60/40 which is AOR.
36% (IRA) - Individual LT Corporate Bonds , 33%(taxable) - schy, 33%(taxable) - SCHD Dividend Growth
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