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I am a VERY nervous investor

I am semi-retired. I currently do not need income from my investments but may need it at any time. As long as I have my current part time job I'm fine. The job will last at least another year, but could last as long as 3 years. I am 62. I don't plan to start collect Social Security until I'm 66 if possible, but if necessary I could start now and collect $1400/ month. I also have a small pension.

I am a VERY conservative investor. When I will need income from my investments I will need about $30K per year pre tax. I have $350K in my former employer's 401k. That was with John Hancock. I'd just as soon leave it where it is, but I know I should put it into an IRA rollover account. I'm tempted to keep it simple and put it all into a balanced fund like the Vanguard Wellington fund. Would that be a terrible choice? My current investments are as follows:

$350K John Hancock Fixed Income Fund (paying 4.5%) Has never paid less for more than 30 years $28K Manulife stock (formally John Hancock) $22K Wellpoint stock (current employer) $107K Vanguard Wellington (part of current 401k) $34K Vanguard Total Bond (part of current 401k) $49K Vanguard Institutional Index (part of current 401k) $70K Series I Savings Bonds $11K in IRA CDs

I would really appreciate your advice.

Thank you.

Reply to
Jane
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Your total assets add up to 671k.

To comfortably live on 30k for 30+ years, you will want ~$750k saved. (30k/.04 withdraw). This does not include SS.

If you factor in SS (1400*12,800), the investment portion only needs to supply the 14k annual difference. To withdraw 14k from assets, the 350k you have in the John Hancock fund is enough (14k/.

0450k).

These calculations assume a 4% initial withdraw.

You have two issues playing tug of war (financially). One is your risk tolerance, the other is you might "outlive" your savings (if you live 30+ years in retirement).

Wellington is a 60-40 Equity-bond mix. I think rolling 401k into Wellington makes sense. This is 190k total.

I see 81k in cash type vehicles (CDs and I Bonds). This is ~ 5 years of income (81k/14k=5.75). I might suggest spending this money first, and draw down other assets to replenish this supply. This "5 year" cash position is an excellent hedge against market risk (market could go down for 5 years and you would NOT run out of income until 6th year). A further suggestion is to add another year to this "cushion" in an up market, and leave it alone if market goes down (don't "draw down" on a "down year").

The only other change I would suggest is to sell the Manulife/John Hancock stock and the well point stock. I would add this to "fixed income fund" position. This would reduce your risk some. Holding two individual stocks is not enough diversification, and I think the other investments look solid.

Reply to
jIM

Jim, all good advice, but I think you meant, "don't replenish cushion" in a down year as opposed to "don't drawdown" from cushion in down year, right?

-Will

Reply to
Will Trice

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