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Subject:  Re: Impending Retirement Date:  7/28/1999  1:10 PM
Author:  rjm1 Number:  10 of 178

My wife and I have our worst arguments on the allocation of our funds. I am 100% in stocks. My
wife thinks we should have some bonds for income. Since most of our retirement money is in my
IRAs ( from 15 years in the petroleum industry) I control the funds. I am in FF, 10 to 12 large cap
stocks like WMB, HD etc, SPY for diversity and a small amount in PEG5. I plan on retiring in 2 to
3 years and each year converting part of the FF into SPY and monthly selling SPY for a salary.

I am also an agressive investor, but it is now time to get into a some fixed income investments. Figure out your expenses for, say the next three years. Deduct any Social Security and pension payments you will receive. Then start to build a fixed income portfolio to meet these expenses. As you speend these funds down rebuild from the appreciation in your stocks. Also look at selling covered calls on the securities you would sell for living expenses.

Remember, try and keep capital gains out of the tax deferred accounts and income generating securities in the deferred accounts. This will lower the tax bite.

I always ask myself why I am not 100% in stocks. I am about 90% and like the security of the fixed income investments. However, if you have an adaquate emergency fund I can see 100% stocks until you get to two to three years before retirement.

Make sure your wife knows that inflation and taxes take most of the value out of fixed income investments and stocks are your only defense against not having enough income over the next 20 to 30 years.
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