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Author: Bisonrules Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 294  
Subject: Want your opinion Date: 12/29/2006 3:08 PM
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Hi all,

I'm helping my mom with her retirement planning. (She's not worked in 30 years and my father passed away just under 3 years ago. He was the bread winner but had just retired. Anyway...I'm trying to get a feel for how we've invested it.)

Some basic information. Our financial advisor charges 0.65% of assets under his watch. Based on what I've read this is a very competitive rate.

There are 3 accounts under the F/A.
Trust: $183,000 (I'm the trustee of this account)
Taxable: $51,000
IRA: $616,000
Total: $850,000

Now, the trust has real estate partnerships paying regular dividends into the account. In 2006 it was $19,000. In 2007, I estimate that it will pay $20,000. (The real estate has been a very consistent performer) The trust will pay to the taxable account $12,960 of the dividends from the partnerships. (Current income +5k approx. Eventually the properties will sell and we'll get the cash but valuing them into the portfolio is difficult, so I'm ignoring them for the moment but for the cash inflows)

Now I expect mom to withdrawal $39,000 (3,100/month 1st 6 months and $3,400 last 6 mos) in automatic withdrawals. I also expect $10,000 in unplanned withdrawals for next X-Mas, for emergencies, etc. (Health care costs in July will go up because she will be paying for med's, doc's out of pocket)

So, if the expected happens she will withdrawal $49,000 from the accounts in 2007. This is offset by the income coming into the portfolio (trust) by $21,000, so the final actual hit to the portfolio should be $28,000

$28,000/850,000= 3.29%,
For 2006 it was: $26k/815k = 3.19%

We currently have the following investments in these accounts:
Cash (MM): 1.2%
Short term bond: 4.8%
Bank Loan: 8.9%
Core Bond: 7.1%
Infl. Ind. Bond: 6.5%
Convertible Bond: 6.1%
Intn. Bond 4.0%
Merger: 5.3%
Tact. Asset Allc: 13.2%
Mark. Neutral: 5.3%
US Long/Short: 2.4%
Global Long/Short 2.4%
Real Estate 3.4%
Large Cap Val. 4.7%
Large Cap blend 4.4%
Small Cap Blend 3.5%
Global Equity 12.3%
Commodity: 4.7%
Total 100.0%

According to the FA the expected return is 8.2% with a deviation of 4.6%.

Does it sound like I'm on the right track or do I need to look into this more?

Thanks,
Bisonrules
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