No. of Recommendations: 4
I had no idea we were paying $5000 in fees. When I asked them about their fees last year I never got a straight answer.

The fees are a huge concern.

My guess: it sounds like you have some sort of managed account that is charging you a fee as a percentage of assets. e.g. They charge you 1% of your account in fees a year. The fees are going to be a big problem for you since you are a conservative investor. A conservative portfolio like you are looking for is only going to earn you a median return of 4%-5% a year. However, a typical managed account is going to charge fee of 1% of assets,or more. So your 4-5% returns are going to be cut to 3-4% (or less). In other words you will be paying (in an average year) 22% of your earnings to your brokerage.

Now, technically, I agree with a lot of the other posters: a collection of ETFs is the best solution to set up a low fee way to invest your money. (I'd argue that you need more than just AGG and VTI, though. If you want to go that route, I'd advise mixing in VEA, VIG, and VNQ as well. Perhaps 20% VTI, 15% VEA, 15% VIG, 10% VNQ, 40% AGG.) If you are willing to learn just a little investing, this is a great approach to take. I am not detracting from this approach: it isn't very hard or time consuming.

But you explicitly state that you are an "uninformed investor", and that your husband is unable to help in managing your money for medical reasons. (Which leads to the question, "how can I set this up so that it requires literally zero maintenance in case something happens to me".

So let me give you a simpler option. Close the Merrill account, open up a Vanguard account, and put everything into the VTENX which is the "Target Retirement 2010" mutual fund (i.e. "I'm already retired"). This will give you a balanced portfolio "out of the box": 35% in bonds, 20% in stocks, 15% in international bonds, 15% in inflation-protected bonds, and 15% in international stocks. And the fund will automatically handle all of the re-balancing and other maintenance.

This approach has no upfront or annual fees and has a very low expense ratio. It has some very minor disadvantages compared with "do it yourself" but is completely drop dead simple and you'll never have to think about it again except to cash the dividend checks.



To answer your question about re-balancing. Say you have $500,000. You follow the other post's advice and put 60% in VTI and 40% in AGG. So $300,000 in VTI and $200,000 in AGG. Now imagine that a year has gone by and it is March 2, 2017. Imagine that your VTI is up 10% and your AGG is flat. So now you have $330,000 in VTI, and $200,000 in AGG. (Now it now would be 62% VTI and 38% AGG.)

Re-balancing annually means that on March 2 every year, you would re-adjust your account back to your goal. So, in this case, you'd sell $12,000 VTI and put it into AGG to balance it out to 60/40 again. (318,000 and 212,000).
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