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Review Requested: Proposed Allocations in Prep for Retirement

Bogleheads • View forum - Investing - Help with Personal Investments - www.bogleheads.org
All,

I would love to pick the collective BH wisdom on the proposed allocations.

Background:

Plan to retire: Dec2017 from a Mega-Corp.

Expected Withdrawal Rate: Under 3%

Social Security: Me - 70, DW - 67 (and then shift to spousal)

Assets:

IRA/401K: Mid 7 figures

Roth: Low 5 figures

Taxable: Mid 6 figures.

Emergency Funds: $50,000

Debt: Mortgage, $130,000 remaining, paid off in Feb2028 - 15 year 2.75%

Tax Filing: Married Filing Jointly

Children: Daughter, already launched (hoping for marriage and grand-babies)

Fed Tax Rate:28%

CA Tax Rate: 9.3%

Age: Me-58, DW-57

Desired Asset Allocation: 57%/39%/4% (start of Retirement)

Desired International allocation: 33% of Equities

Current Asset Allocation: 57%/39%/4%

Currently funds are partially invested with an FA at Merrill Lynch and the other portion is part of my 401K at my Mega-Corp. Plan is to Roll-over the 401K in Jan2018 (after retirement) to an IRA already at Merrill Lynch. In late 2018 I will shift all of the funds to Merrill Edge and begin managing them myself. In addition, I plan a series of Roth Conversions from age 58-70 to fund living expenses and reduce the expected Taxes when RMDs begin.

In the meantime, I have been working with my FA and have come up with a proposed allocation strategy:

Equities 5% IEMG ISHARES INC CORE MSCI EMERGING MKTS ETF

14% EFA ISHARES MSCI EAFE

14% VUG VANGUARD GROWTH ETF

5% VBK VANGUARD SMALL CAP GROWTH ETF

14% VTV VANGUARD VALUE ETF

5% VNQ VANGUARD REAL ESTATE

Fixed Income - this represents 12 years of expenses which will take me to age 70 when SS begins. Plan is to reduce this over time to 10 years of expenses and hold there through retirement

5% PONPX PIMCO INCOME FUND

27% BIV VANGUARD INTERMEDIATE TERM BOND ETF 31L53

7% BSV VANGUARD SHORT TERM BOND 31L60

Cash - this represents 1 year of expenses + emergency fund

4% CASH Cash (USD)

My plan will be to shift my IRA holdings (managed by Merrill Lynch) to the portfolio proposed above once it has been finalized. When the 401K is rolled over in Jan2018, I will re-balance those funds into this portfolio as well. In the mean-time, I do not plan to adjust any holdings in the 401K since none of the options in my desired portfolio is available. We have been managing the portfolio as a whole despite the fact that only a portion is with Merrill Lynch.

Questions:1. What are your thoughts on the proposed portfolio?

2. Any thoughts on the Asset Allocation Strategy?

3. Any concerns with the International Exposure?

4. Other suggestions or concerns?
Date: Jun 20, 2017   


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