As 2020 winds to a close, I am five full years into early retirement. I would like to simplify the fund ‘count’, but so far I’ve only trimmed the bond choice down to a single entity. Part of the desire to simplify is I want to teach my wife to manage this stuff in case I’m not able. Sharon is a retired CPA, so can handle most anything I throw at her, but she would not enjoy the process as much as I seem to have done.
The other realization is that for the last 10 years or so, I have been managing the traditional IRA portfolio and the Roth IRA Portfolio with the same risk profiles (though I balance them separately).
With five years of experience, I’m finding that we are living on ‘draws’ solely from the traditional, with the Roths being allowed to grow untouched. At this writing, the Roth is about 25% of the total of the portfolio. Similar to how I allowed the presence of a pension to ‘boost’ allowable risk in the investments, I’m now making that call on the Roths.
Since I’m using Schwab as a brokerage, I am primarily using their ETFs. These funds are low expense, and as a bonus they trade for free in the Schwab universe.
Here is what I’m considering for Traditional IRAs:
|
Category |
FundName |
Ticker |
Percent |
Expense Ratio |
US Equities 43% |
US Large Cap Growth
Stocks |
SCHG |
8.00% |
0.04% |
|
US Large Cap Value
Stocks |
SCHV |
9.00% |
0.04% |
||
US Small Cap Growth |
SLYG |
8.00% |
0.15% |
||
US Small Cap Value |
SLYV |
9.00% |
0.15% |
||
ETF – REIT |
VNQ |
9.00% |
0.12% |
||
Bonds 15% |
US Bonds |
SCHZ |
15.00% |
0.04% |
|
International Equities 28% |
Intl Equity |
SCHF |
7.00% |
0.06% |
|
Intl Large Cap Value |
DWX |
7.00% |
0.45% |
||
ETF - Int'l Small Cap |
DLS |
7.00% |
0.58% |
||
Intl Diversified
Emerging Markets |
SCHE |
7.00% |
0.11% |
||
Gold, Cash 14% |
Gold |
SGOL |
4.00% |
0.17% |
|
Cash |
|
$$$ |
10.00% |
0 |
|
100.00% |
0.14% |
The result is very low expense with decent diversification and free trades. I hung on to the Vanguard REIT in lieu of Schwab’s SCHH, as the Vanguard just seems to perform much better, at least on a trailing basis.
And here is where I’m going with the Roth portfolio:
|
Category |
FundName |
Ticker |
Percent |
Expense Ratio |
US Equities 50% |
US Large Cap Growth
Stocks |
SCHG |
10.00% |
0.04% |
|
US Large Cap Value
Stocks |
SCHV |
10.00% |
0.04% |
||
US Small Cap Growth |
SLYG |
10.00% |
0.15% |
||
US Small Cap Value |
SLYV |
10.00% |
0.15% |
||
ETF – REIT |
VNQ |
10.00% |
0.12% |
||
Bonds 6% |
US Bonds |
SCHZ |
6.00% |
0.04% |
|
International Equities 40% |
Intl Equity |
SCHF |
10.00% |
0.06% |
|
Intl Large Cap Value |
DWX |
10.00% |
0.45% |
||
ETF - Int'l Small Cap |
DLS |
10.00% |
0.58% |
||
Intl Diversified
Emerging Markets |
SCHE |
10.00% |
0.11% |
||
Gold 4% |
Gold |
SGOL |
4.00% |
0.17% |
|
Cash |
|
$$$ |
0.00% |
0 |
|
100.00% |
0.18% |
Wish me luck!
Send e-mail to: Todd <todd@thepeaches.com>