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  • Rifampin
    replied
    What do you all think of this plan set forth by a Vanguard Personal Advisor?
    Here is a summary. Since I will no longer be able to contribute to SEP-IRA with new job, they recommended a rollover IRA until I find out what 401k contribution plans are offered at the new job.

    GOAL: Retirement Accumulate $6,850,000 by 2036,
    contributing $100,000 per year. This will allow you to spend approximately $180,000 annually,
    including taxes, in today's dollar value.

    Holdings by account†
    Taxable $240,000
    Vanguard Total International Stock Index Fund Admiral Shares $62,400
    Vanguard Total Stock Market Index Fund Admiral Shares $177,600

    Rollover IRA (Recommended by Vanguard to Convert SEP-IRA into Rollover) $130,000
    Vanguard Total Bond Market Index Fund Admiral Shares $51,800
    Vanguard Total International Stock Index Fund Admiral Shares $56,000
    Vanguard Total International Bond Index Fund Admiral Shares $22,200

    Leave a comment:


  • Rifampin
    replied
    What do you all think of this plan set forth by a Vanguard Personal Advisor? Since I will no longer be able to contribute to SEP-IRA with new job, they recommended a rollover IRA until I find out what 401k contribution plans are offered at the new job. Here is a summary:

    GOAL: Retirement Accumulate $6,850,000 by 2036,
    contributing $100,000 per year. This will allow you to spend approximately $180,000 annually,
    including taxes, in today's dollar value.

    Holdings by account†
    Taxable $240,000
    Vanguard Total International Stock Index Fund Admiral Shares $62,400
    Vanguard Total Stock Market Index Fund Admiral Shares $177,600

    Rollover IRA (Recommended by Vanguard to Convert SEP-IRA into Rollover) $130,000
    Vanguard Total Bond Market Index Fund Admiral Shares $51,800
    Vanguard Total International Stock Index Fund Admiral Shares $56,000
    Vanguard Total International Bond Index Fund Admiral Shares $22,200

    Leave a comment:


  • Rifampin
    replied
    What do you all think of this plan set forth by a Vanguard Personal Advisor? Since I will no longer be able to contribute to SEP-IRA with new job, they recommended a rollover IRA until I find out what 401k contribution plans are offered at the new job. Here is a summary:

    GOAL: Retirement Accumulate $6,850,000 by 2036,
    contributing $100,000 per year. This will allow you to spend approximately $180,000 annually,
    including taxes, in today's dollar value.

    Holdings by account†
    Taxable $240,000
    Vanguard Total International Stock Index Fund Admiral Shares $62,400
    Vanguard Total Stock Market Index Fund Admiral Shares $177,600

    Rollover IRA (Recommended by Vanguard to Convert SEP-IRA into Rollover) $130,000
    Vanguard Total Bond Market Index Fund Admiral Shares $51,800
    Vanguard Total International Stock Index Fund Admiral Shares $56,000
    Vanguard Total International Bond Index Fund Admiral Shares $22,200

    Leave a comment:


  • Rifampin
    replied




    I like what Jim has recommended so far, and the asset allocation Vanguard calculated seems very close to reasonable, given your age. However, I note:

    1. The 80/20 allocation, for which you would pay 0.3% yearly, can be had for 0% by buying the appropriate LifeStrategy fund whose underlying asset allocation is nearly identical and requires zero rebalancing. You could literally own one fund and be done with this exercise for the next several decades, in so far as your SEP-IRA is concerned.

    2. The recommended funds may be okay for a qualified account but are inappropriate for a taxable account. The two bond funds both generate taxable dividends. From the standpoint of after-tax yield, you would be better off with one of their tax-exempt bond funds. To make this easier, you might use one of their global equity funds in lieu of the two equity funds.

    3. You have an opportunity for tax-located investing. You could own the taxable bond funds in your SEP and own the naturally tax-advantaged equity funds in your taxable account. I don’t know if Vangaurd offers this level of service.
    Click to expand...


    I will certainly have to ask the Vanguard advisors about this. Thanks for your input. With the recent volatility in the markets, I wonder if I should hold out a little. I understand you can't "time the market" but with oil taking a nose dive and people flocking to government bonds today, it wouldn't hurt to be patient.

    Leave a comment:


  • Hatton
    replied
    Reits need to go in a tax protected account since they pay significant dividends

    Leave a comment:


  • Carlos
    replied
    Rifampin, I am just wondering, are you considering to add REITs into your plan? and if so, would you put it into the taxable vs non taxable accounts?

     

     

    Leave a comment:


  • wbenutley
    replied
    I like what Jim has recommended so far, and the asset allocation Vanguard calculated seems very close to reasonable, given your age. However, I note:

    1. The 80/20 allocation, for which you would pay 0.3% yearly, can be had for 0% by buying the appropriate LifeStrategy fund whose underlying asset allocation is nearly identical and requires zero rebalancing. You could literally own one fund and be done with this exercise for the next several decades, in so far as your SEP-IRA is concerned.

    2. The recommended funds may be okay for a qualified account but are inappropriate for a taxable account. The two bond funds both generate taxable dividends. From the standpoint of after-tax yield, you would be better off with one of their tax-exempt bond funds. To make this easier, you might use one of their global equity funds in lieu of the two equity funds.

    3. You have an opportunity for tax-located investing. You could own the taxable bond funds in your SEP and own the naturally tax-advantaged equity funds in your taxable account. I don't know if Vangaurd offers this level of service.

    Physician Family Financial Advisors Inc.

    Leave a comment:


  • JKG
    replied







    Rifampin,  when I got a financial plan through Vanguard they initially sent a questionaire to determine my risk tolerance and then they followed with a computer generated plan.  I “met” with a CFP via a skype-like connection and discussed what I wanted to do.  They then sent a detailed sell this, buy that recommendations. Then another skype call to further refine the plan.  I implemented most of the plan.  I now just tinker around the edges. This process was more complicated for me because I had a lot of junk from Merrill Lynch that had to be addressed in a tax efficient manner. Your situation sounds straight forward.  You will set up a diversified asset allocation and get your cash deployed. Good job on no debt and savings rate.
    Click to expand…


    Thanks for your input. I will update this post as soon as Vanguard comes back to me with their plan. The mutual fund recommendation through the website came back as:



























    stock legend 48% $172,800.00

    Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)


    international legend 32% $115,200.00

    Vanguard Total International Stock Index Fund Investor Shares (VGTSX)


    bond legend 14% $50,400.00

    Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)


    international bond legend 6% $21,600.00

    Vanguard Total International Bond Index Fund Investor Shares (VTIBX)



     
    Click to expand...


    I like the allocation, just make sure you get the cheaper admiral shares instead of the slightly more expensive investor shares.

    Leave a comment:


  • griva
    replied
    Don't mean to hijack the thread, but I thought this question was relevant to the topic and others might appreciate the info as well.

     

    Does anyone know of other low AUM services that have a retail office and offer similar low-cost index funds?   I am looking for a Vanguard-like place for family that are older and prefer face-to-face interactions.  Would love a 0.3% AUM like Vanguard but would be ok with a little higher.  I just don't want to see them pay 1-1.25%.  I understand Vanguard does not have B&M offices.

    Leave a comment:


  • Hatton
    replied
    The 80/20 stock/bond recommendation is very reasonable at your ages.  You realize that could save the 0.03 percent and use this allocation if you overcome your fear of taking care of your own money. Just remember to put the bonds into the retirement account.

    Leave a comment:


  • nyu04
    replied




    Hey thanks WCI for posting on my behalf and responding to my questions. I suppose I should have mentioned my new job does not start till Feb so I have not had a opportunity to review current 401k options through my new employer. However, I am working a PRN home health job as a 1099 so perhaps I can create an individual 401k through Vanguard. We have a phone appointment with Vanguard in late Jan. I assume that based on our risk tolerance, they will propose a sample portfolio allocation. If possible I will post it here and have y’all critique it.
    Click to expand...


    Please let me/us know how your experience goes if you decide to use the service!

    Leave a comment:


  • Rifampin
    replied




    Rifampin,  when I got a financial plan through Vanguard they initially sent a questionaire to determine my risk tolerance and then they followed with a computer generated plan.  I “met” with a CFP via a skype-like connection and discussed what I wanted to do.  They then sent a detailed sell this, buy that recommendations. Then another skype call to further refine the plan.  I implemented most of the plan.  I now just tinker around the edges. This process was more complicated for me because I had a lot of junk from Merrill Lynch that had to be addressed in a tax efficient manner. Your situation sounds straight forward.  You will set up a diversified asset allocation and get your cash deployed. Good job on no debt and savings rate.
    Click to expand...


    Thanks for your input. I will update this post as soon as Vanguard comes back to me with their plan. The mutual fund recommendation through the website came back as:



























    stock legend 48% $172,800.00

    Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)


    international legend 32% $115,200.00

    Vanguard Total International Stock Index Fund Investor Shares (VGTSX)


    bond legend 14% $50,400.00

    Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)


    international bond legend 6% $21,600.00

    Vanguard Total International Bond Index Fund Investor Shares (VTIBX)



     

    Leave a comment:


  • Hatton
    replied
    Rifampin,  when I got a financial plan through Vanguard they initially sent a questionaire to determine my risk tolerance and then they followed with a computer generated plan.  I "met" with a CFP via a skype-like connection and discussed what I wanted to do.  They then sent a detailed sell this, buy that recommendations. Then another skype call to further refine the plan.  I implemented most of the plan.  I now just tinker around the edges. This process was more complicated for me because I had a lot of junk from Merrill Lynch that had to be addressed in a tax efficient manner. Your situation sounds straight forward.  You will set up a diversified asset allocation and get your cash deployed. Good job on no debt and savings rate.

    Leave a comment:


  • Rifampin
    replied
    Hey thanks WCI for posting on my behalf and responding to my question. I suppose I should have mentioned my new job does not start till Feb so I have not had a opportunity to review current 401k options through my new employer. However, I am working a PRN home health job as a 1099 so perhaps I can create an individual 401k through Vanguard. We have a phone appointment with them in late Jan and I assume that based on our risk tolerance, they will propose a sample portfolio allocation. If possible I will post it here and have y'all critique it.

    Leave a comment:


  • Rifampin
    replied
    Hey thanks WCI for posting on my behalf and responding to my questions. I suppose I should have mentioned my new job does not start till Feb so I have not had a opportunity to review current 401k options through my new employer. However, I am working a PRN home health job as a 1099 so perhaps I can create an individual 401k through Vanguard. We have a phone appointment with Vanguard in late Jan. I assume that based on our risk tolerance, they will propose a sample portfolio allocation. If possible I will post it here and have y'all critique it.

    Leave a comment:

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