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Strategies & Market Trends : Retirement - Now what?
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To: Investor2 who wrote (219)5/29/2009 10:48:06 PM
From: Steve Felix  Read Replies (1) of 288
 
Sure, although I need to add something I forgot.

The wife and I each have Roth IRAs, each roughly 8k. Hers in Vanguard Total Bond Market. Mine in Vanguard Total Stock Market. This money is earmarked to fund an HSA when she retires. If I'm not mistaken we can put in $5800 an year and deduct it on our taxes. I have 18 months to make sure.

Those being our only funds and our only bonds it breaks down as:

Bonds 2%
Cash / CDs 32%
Stocks 66% ( 16k total in annual dividends )

Of course the market drop has lowered the stock percentage as opposed to the cash.

I believe everyones case is different. Barring major health issues or some kind of catastrophe I know what I need in the "super safe" department to span the six years from her retirement until SS kicks in. Point being that actual amount of cash is more important than what percentage it is.

If the market doubled tomorrow I wouldn't raise the cash portion, it would just be 16%.

If the wife was retiring tomorrow and I needed the first years cash, the cash percentage would go to 26-27%. I still wouldn't raise the cash portion.

I don't think planning comes to an end though. My CDs need to come due 2011-16. Currently 2011 and 2014 are filled in. The rest come due in the next year and a half from reaching for the best yields as rates fell. Amazing that back in January I got 5 years at 4.41% where now it is 3%.

I plan to take the other two and put them in a separate account and buy safe 5-7% preferreds. That is as far as peace of mind will let me go.

Will those preferreds go on the stock, or bond side?

I suppose splitting it 50-50 would be fair.
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