The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: cmdrfunk on January 09, 2017, 05:35:40 PM

Title: New to this, retire in a year maybe, how should I shift these funds about?
Post by: cmdrfunk on January 09, 2017, 05:35:40 PM
I'm almost 37 years old.  I'm thinking of retiring in a year or so, but I don't think I'm quite set up properly yet, but I'm not sure how to get set yet to actually do so.

I basically have very little bonds now except a few in my TSP (basically fed employee 401k) account, but I'm thinking I should move some of the below assets into a Vanguard bond fund.  What do you think I should do?  My initial reaction is to take a good portion of the savings account and putting it into Vanguard Total Bond Market Index (VBTLX) and then sucking it up and pay the taxes and transfer some of the Dividend fund (how much? is it wise to do at all?) to the same fund since that's the one with a higher 0.33% fee.  Then I'd use a combination of the bond and stock funds to live on when I retire.  I think that's the way to simulate the advice here ( since I already have such a high percentage in stocks.

Or I could just skip all that, save the taxes, and spend the next year just buying mostly VBTLX bonds with my take home salary to balance things out instead of being 98% in stocks.

Also I was thinking of moving my Roth IRA to Vanguard as well, but putting it into cheaper stock funds like the Total Stock and Total International Stock.

I've calculated my spending to be about $20k (maybe a bit more, but I can certainly cut) as a single guy but if I retired I'd probably move somewhere with cheaper housing (I rent now) as the only reason I put up with the expensive housing now is for the job.

Vanguard Taxable Funds
VFIAX 500 Index Fund Admiral $120k  0.05%
VDIGX Vanguard Dividend Growth Fund  $60k 0.33%
VIGAX Vanguard Growth Index Fund Admiral $65k 0.08%

TRowePrice Roth IRA
Capital Appreciation - Roth IRA  PRWCX  $23k 0.7%
Equity Index 500 - Roth IRA  PREIX $19k 0.27%
New Horizons - Roth IRA PRNHX $34k 0.79%

TSP: $171k
Health Savings Account: $2,200 (this HSA is pretty new and I think I'm going to be maxing it for 2016 and 2017)
Savings Account: $34k (this really has to move somewhere more useful)

Net: $529,264.38

Thanks a lot for any suggestions.
Title: Re: New to this, retire in a year maybe, how should I shift these funds about?
Post by: MustacheAndaHalf on January 09, 2017, 05:48:58 PM
First take a look at Vanguard's retirement nest egg calculator.  It's a very simple interface that lets you say how much you have ($500k) and how long that money would last in retirement.  For example, are you prepared to live on roughly $1500 to $2000/month in expenses?  Is there something besides the $500k that will help pay expenses during your retirement?

In higher tax brackets it can make sense to hold a tax-exempt bond fund in taxable.  Vanguard even has some state-specific tax-exempt bonds - those are exempt from Federal and state tax (in the listed state).
Title: Re: New to this, retire in a year maybe, how should I shift these funds about?
Post by: somers515 on January 10, 2017, 04:37:26 AM
Check this out too, I found it helpful when considering AA when approaching FIRE.

Congrats on being so close!