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Dear Fools,

I am 56 and my DW is 58. I love my career and at this point have no reason why I would really need to retire before 2015 other than to be able to spend more time with my best friend/partner/wife if she would retire early in 2009 which is a possibility since she is burned out with her present position. Philosophically, we are both into experiencing and enjoying each other more than amassing wealth and living the "expensive" life and would do well with gardening (we live on an acre) and raising rabbits for meat. However, we do enjoy traveling and it would be nice to be able to go places in our retirement. To this end, we have lived below our means and maxed out our IRA's and 401K's for the past 20 yrs or so and are sitting on a modest nest egg. Actually, from what I read about my peer's savings habits it is more like a fortune. With due respect, our love of traveling has developed and been afforded by the passing of loved ones who have made it possible for us take some unforgettable vacations. Although we have invested the majority of our inheritances, we have realized the importance of enjoying life in the now. We both work with geriatrics and know the uncertainties of old age. As such, we eat healthy and work out regularly.

My question is this - with 78% of our assets (not including house, cars etc.) in equities weighted toward SPY and dividend producers, and the rest (22%) in ING savings/CDs ( $325,000 + all together) - are CD ladder(s) the way to go to start stabilizing our portfolio? At this point I'm comfortable with an 80/20 ratio, but going forward I want to begin adding stability. (At this point half of that 22% is earmarked for new auto(s) and European vacation in the next few years)

Here is what I'm considering - I have a $25K CD ladder with ING (5K for 1,2,3,4,and 5yrs) which start maturing in Nov 05. Starting in 1/06 I will fund an ING Roth IRA 5 yr CD and continue the ladder for the next 5 yrs as the non-IRA CDs mature. To diversify tax implications and spread the maturity dates out, I'm thinking of transferring 25K from DW's Traditional IRA SPY to an ING CD Traditional IRA ladder (5K/ 1,2,3,4,5 yr) in July of 2006 and reinvesting both my (Jan) and her (Jul) CD's in 5yr CDs as they mature until such time as we need the cash and the equity market is down to the point it would be beneficial to cash in the CDs rather than the equities.

We moved from CU IRAs in the early 80s to mutual funds in the early 90s and thanks to MF to individual stocks in 2001. My big problem now is how to stabilize as we move toward retirement. From everything I've read over the years and especially what I've read recently, I don't trust bonds and treasuries have no appreciable advantage over CDs at this point.

I do however have experience with CDs. When I took over my late fathers finances a few years ago I put the vast majority of it in a 7% CD which turned out to be by far the best investment of his funds. For this reason I am leaning toward the CD ladder approach and even considering adding to the amounts (e.g. $25,000 in 3/06 or 07 and $25,000 in 9/06 or 07) to spread out the interest pay-outs should the market be down at the time. If not, I could reinvest and take money out of equities.

OK, so here's the challenge dear Fools. What would be a more productive investment than CDs for stability in my portfolio?

I hope this makes sense as I”ve tried to keep it breif.

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