Ray9640 writes:<<I've just early retired, at 57, with a $270K IRA acct.To receive some income to supplement a fairly good monthly pension, I have started an early withdrawal plan, under the IRS's 72(t) SEPP plan, using the amortization method. The annual withdrawals are $15K, about a 5% drawdown rate. This seems to me to be a reasonable yearly reduction, which I should be able to offset with some of the portfolio invested in stable S-T income yielding investments like CD's (cur- rent rate = 6.9 for 6 and 12-months) and the remainder in a moderate domestic and overseas equity port.Like a lot of other new retirees who have managed their own 401K's, IRA's and other investments for years, I feel that I can pick appropriate funds and stocks to generate the needed return. My concern boils down to 2 words - ASSET ALLOCATION! They say that your long-term returns are affected almost exclusively,at least up to 90%, not by what funds or stocks you pick, but by the particular allocation of the assets. Need growth? But some value also? Large or small? Both? How about some overseas core funds? Sectors for some casual market timing? Europe? (isnt it the "next" US market? Fgn bonds, to hedge the high-riding dollar?Given enough time, paper, pencils and web sites, I can probably derive a safe portfolio, covering enough bases to ride out bad times in each area while doing okay in others. But, dont I really need a financial planner for this? It's not house money now, it's my living expenses for the next 20-25 years. I'd like to hear from other folks who're in the same boat, or have been there maybe done that, or not. Also any suggestions for sites, boards, that specialize in Asset Allocation. I figure all I need is a 5% return on my equity positions and the 6 or 7% from the fixed to stay ahead of the withdrawals...what would you do with the $260K?>>My philosophy is pretty much spelled out in the three successive articles that begin with the one entitled "Investing Your Nest Egg" at http://www.fool.com/retirement/manageretirement/manageretirement6.htm. Basically, you divvy up your money based on your ability to sleep at night. And you do so AFTER you have set aside some three to five years of income in vehicles other than stocks. While you could go to a financial planner to determine an "appropriate" allocation for you assuming you're reluctant to do so yourself, I personally don't think that's necessary. There are plenty of tools available to help you decide what may be right for you. If you want a model (and I'm not saying it's the best thing to use), try the one at Smart Money available at http://university.smartmoney.com/departments/takingaction/assetallocation/index.cfm?story=intro. Not only do they provide a reasonable discussion of the subject, the asset allocation planning model they provide will give you an indication of what you could do. Basically, though, it's a personal decision all of us must make based on our ability to withstand the sight of a fluctuating portfolio in the short-term.Regards..Pixy
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