Re-balancing account via withdrawals.

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Topic Author
widow23
Posts: 9
Joined: Tue Mar 28, 2023 3:06 pm

Re-balancing account via withdrawals.

Post by widow23 »

Aloha all, I am a recent widow. My late husband was a huge fan of Bogleheads. He did a great job with our investments, and I am thankful to have a strategy to follow. I am in the middle of reading the Bogleheads Guide to Investing to learn more. I am planning to keep everything he did the same for now, as I am confident in what he has done. My question is this: I will be drawing first from a double inherited IRA at Vanguard since I will need to have the money out within 10 years. I am planning to make it last the full 10 years. It is currently invested in 3 funds: Short Term Bond Index Admiral 18%, Total Bond Index Admiral 46%, Total Stock Market Index Admiral 36%. Last month was the first withdrawal I did, and I just took from all three funds equally, because I wasnʻt sure what else to do. I was wondering your thoughts on any other ideas regarding my asset allocation. Would it be better to withdraw from one of the funds at a higher ratio over the others? I am a 52 year old woman, my husband was 62, we had both been retired for 10 years and if I am wise and careful I will have enough to last me the rest of my life. We have no children, so I am not worried about what I will pass on after me. I am definitely more conservative in my risk tolerance. The above is 64% bonds, which I know is above my age as far as the amount of bonds, but Iʻm ok with that. I still have a lot to learn and I will keep reading, but I wanted to get your thoughts since I know you all are smarter than I am with this! Thank you!
Call_Me_Op
Posts: 9881
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Re-balancing account via withdrawals.

Post by Call_Me_Op »

widow23 wrote: Tue Mar 28, 2023 3:20 pm Aloha all, I am a recent widow. My late husband was a huge fan of Bogleheads. He did a great job with our investments, and I am thankful to have a strategy to follow. I am in the middle of reading the Bogleheads Guide to Investing to learn more. I am planning to keep everything he did the same for now, as I am confident in what he has done. My question is this: I will be drawing first from a double inherited IRA at Vanguard since I will need to have the money out within 10 years. I am planning to make it last the full 10 years. It is currently invested in 3 funds: Short Term Bond Index Admiral 18%, Total Bond Index Admiral 46%, Total Stock Market Index Admiral 36%. Last month was the first withdrawal I did, and I just took from all three funds equally, because I wasnʻt sure what else to do. I was wondering your thoughts on any other ideas regarding my asset allocation. Would it be better to withdraw from one of the funds at a higher ratio over the others? I am a 52 year old woman, my husband was 62, we had both been retired for 10 years and if I am wise and careful I will have enough to last me the rest of my life. We have no children, so I am not worried about what I will pass on after me. I am definitely more conservative in my risk tolerance. The above is 64% bonds, which I know is above my age as far as the amount of bonds, but Iʻm ok with that. I still have a lot to learn and I will keep reading, but I wanted to get your thoughts since I know you all are smarter than I am with this! Thank you!
Hi Widow23. Welcome and sorry for your loss. I applaud you for your interest in learning about investing - and (IMO) the Boglehead way is the right way.

You can withdraw in such a way as to bring your investments back into balance. By so doing, you are withdrawing and rebalancing at the same time. This keeps your level of risk where you want it.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
Topic Author
widow23
Posts: 9
Joined: Tue Mar 28, 2023 3:06 pm

Re: Re-balancing account via withdrawals.

Post by widow23 »

Thank you. Iʻm wondering if the ratios I posted seem good and I should just withdraw from all equally? I feel like I read somewhere in the book that the Short Term Bond Index is more volatile, but now I canʻt find that page.
Motostash
Posts: 55
Joined: Sun Jan 30, 2022 6:53 am

Re: Re-balancing account via withdrawals.

Post by Motostash »

Short term bond index is the least volatile fund you listed. It almost behaves like cash. Only you can decide if the allocation remains right for you. You've had a major life change. Keep reading - you'll get there.
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