When we move in a year's time, we will have HIGHER monthly expenses than we do now. I'll be on Medicare. Wife needs to be working, still 46 yrs old a year from now. She has exceedingly great evaluations from her current job. We're expecting it won't be a problem for her to find something, most likely doing the same thing. She'll get a stellar recommendation from our doctor-friend out there in AZ. Maybe she could even work at the same hospital as doctor-friend. (Janitor, making $15/hour right now.)
Holdings: MAPOX 18.9%
PRWCX 36%
PTIAX 4.02%
RPIHX 14%
PRSNX 8.79%
PRIDX 8.1%
PRDSX 6.08%
VSCIX 4.11% (wife's 403b)
KISS It. Keep it simple, Stupid. Shall I "raid" and empty-out MAPOX with its quarterly divs, and redistribute it into my bond funds? I deliberately chose bond funds that pay monthly. to meet monthly expenses. RPIHX is TRP Junk Bonds, global. Not long ago, it replaced PREMX, EM bonds.
I want to keep the lineup around 50/50 stocks/bonds. Morningstar X-Ray tells me I'm at 55 stocks and 37 bonds right now. I suppose that includes bonds held in MAPOX and PRWCX....... The
rent and
electric bill (A/C) will surely be our highest expenses. I bet the A/C and other appliances will cost us about $500/month through most of the year.
If I unloaded MAPOX, then I'd have one less fund to worry about, and one less separate fund family in the mix. I would be ALL in TRP, then.
Oops, except for
PTIAX, and I do intend to keep and grow that one. Very good divs, though lower than during ZIRP days.
AZ is not the best State for taxes re: retirees, but it's not awful.
http://im.mstar.com/im/newhomepage/Miller_State_by_State.pdfThen there's food. Internet (common use room, not in indiv. apartments) and gym might be provided, depending on the apartment complex we choose. Booze. Eating out. Entertainment. Taxes. Gas. Insurance. Wife will ostensibly be able to get health ins. at her job. I do expect to buy a medi-gap policy to supplement Medicare. And my SS check will be smaller, paying for Medicare. My pension grows a tiny bit each year. Up to $700.00 right now per month. We have no revolving debt. We're collecting reward points and intend to take the offered cash, rather than to choose from the fancy menu of options offered by the credit card outfit. Our 2nd car will be paid-off before we go.
The 403b can be rolled over. Maybe into the new job's 403b or to an IRA.
This is a long post, but what thoughts might you have for me? I'm eager to hear.
Comments
Buffet's core is 90% S&P 500 Index / 10% ST Bonds...no explore here. The 90% of his Core is for growth and 10% for income during market downturns. Your income needs maybe greater than 10%, especially if your portfolio is small and market downturns last multiple years.
It's a math problem.
Say you need $1K of income each year:
10% of 10K is $1K, but if the market downturn last 3-5 years you need $3K-$5K or 30%-50% held as income because this portfolio is so small.
10% of $100K is $10K...you have the luxury of increasing you income up to $3K ($3K X 3 years) is less than the $10K you have set aside which is also still less than 10%.
10% of $1,000,000 is $100K...this would provide $30K for 3 years...$20K for 5 years...without having to touch your core.
Your income needs over a 3-5 year period should drive your income portfolio percentage.
So, working backwards if you need $20K of income and your portfolio is $500k Using Buffets 90/10 portfolio as a guideline you would have to tweak it to 88/12:
$20K x 3 years = $60K/$500k = 12% of portfolio (88/12)
$20K X 5 years = $100K/$500? = 20% of portfolio (80/20)
Second point, we explore too much...it's exciting, but not always profitable or practical.
Do you consider MAPOX / PRWCX your core (55% of your portfolio)
Do you consider PTIAX as income (Buffet's ST Bond) your at 4%.
Ask yourself, how do these other funds fit into a "Core & Income" portfolio?
Worry about "Explore" later.
Age difference between you and your spouse:
If TRP offerings simplify things for you, look at their Retirement Funds. Very inexpensive, very diversified. Very simple. PRWCX would compare well with a TRP retirement date of 2040 so I also can see this being your core, but at 36% its hardily "at bat" much. Maybe Pair PRWCX with 2 retirement different dated funds that reflect the age difference between you and your wife's ages. This would provide you with 3 core funds. When your 90 & your wife is 70, these retirement date funds will have transitioned with age as well.
Finally,
Manager risk is real. Institution risk is real.
Some here would spread this core out among managers and among institutions.
Derf
Fishing sounds a lot more fun. https://azstateparks.com/patagonia-lake/on-the-water/fishing
Service jobs in the gig economy cover an ever-wider territory. Dog walking and housesitting pay reasonably well. Or perhaps you can work out of your home, if you choose to.
https://mutualfundobserver.com/discuss/discussion/comment/92389/#Comment_92389
Enjoy your retirement,
Derf
If this is truly true (forget surveillance stuff) and good-faith efforts and not always self-sabotaging vibes ('thanks, we totally get your opposite-of-eager message'), then yeah, absolutely, not worth your time or effort to continue, not one iota. Only real-world super-intense financial pressures would effect a change, and for many people even that is not enough, nothing is, unlike past centuries.