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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75338  
Subject: Re: help -retirement investing plan Date: 6/5/2011 1:15 AM
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You are doing great and should really do the traveling while you can and feel free to spend more too.

Since you are a couple you really need to look at the numbers three different ways assuming;

1) Both of you live into your 90's
2) Husband outlives his spouse by a long time.
3) Wife outlives her spouse by a long time.

The problem is that when one of you passes away the amount of social security and possibly the pension could be greatly reduced. The survivors expenses might not be reduced much or could even increase if they have to hire more help to do what their spouse used to do.

Between the possibly of reduced income someday and inflation even though you are set VERY well you can't just leave it all uninvested.

Be very very careful about planning to do a lot of active stock investing yourself. The problem is that you may be capable of doing it now, but maybe less so by the time you are 80 or 90. Unfortunately it is not uncommon for older people who are having problems with reduced mental capability to have their portfolio crash and burn while they are trying to still manage it. You really need to find a way to get the investments on automatic pilot so that you will not risk making mistakes with it later in life.

Keeping it simple also helps if one spouse does most of the financial planning, but then the other spouse has to take it over some day. you need to make all the plans so that either of you can handle it.

TIPS are good for inflation protection but because of the way they are taxed they should usually only be held in a retirement account.

As a starting point you might consider putting;

1) All the tax protected retirement account money into individual TIPS. You may need to move the 401K money into an IRA to invest in individual TIPS, but this would generally be good to do anyway to give your more flexibility.

2) Put most of the rest of taxable cash account into the Vanguard targeted Retirement income fund. This would give you some reasonable stock and international exposure that you will need to provide more growth.

https://personal.vanguard.com/us/funds/snapshot?FundId=0308&...


This is a bit simplistic and can of course be fine tuned but this would be a good benchmark to compare other alternatives to and to use as a starting point.

Greg
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