I am 61 years old and recently separated from my company. Severance can run me to roughly 62 (Sept, 2025)
My basic question is whether I should do a bond ladder ranging from 2029 to 2046 to provide a steady income stream (assuming 3% inflation). This would get my wife to 80 (she is in relatively poor health) or just go with a bond fund. I project 50% of my portfolio could construct this ladder to 85% of my projected needs (given the inflation rate mentioned). The other 50% would be for long term equity investing and patching the shortfall if lifestyle adjustments can't do it or inflation is higher than anticipated.
Currently at $1.2M in IRA
Another $500K (including severance) in post tax cash and equivalents
No debt
$24K annual pension starting next year
Deciding on when to sign up for SS
Wife is four years younger and has health problems
Looking at about $110K needed per year pretax (hoping to get that number down but $30K for healthcare is a big driver).
Didn't take real advantage of equity run up (scared after Covid). Probably will kick myself the rest of my life over that.
Talking to three different advisory firms. Fee structure ranges from 0.91% (Fidelity) to 1.25%.
Got a crazy plan to at least secure most of my income until wife is 80 (not worried about myself - wife is the big cost driver)
Already have two TIPS coming due in 2026 and 2028. Looking to start a Treasury Bond Ladder (income stream) from 2029 to 2046 when wife is 80. Taking half my IRA and investing in either STRIPs or TIPs or Treasuries (or some combination of the three) forming a ladder that currently could cover about 80% of the shortfall using the $600K (using STRIPs as a surrogate for a mixed approach). This approach assumes 3% inflation. Yields on the STRIPs ranging from 4.4% to 4.7% according to Fidelity Ask price.
The other 50% would be aggressively invested in stocks and short term.
I do not like bond funds. Every advisor I talked to thinks this plan is DOA. I don't like the NAS of bond funds. What I need is a certain income stream for a given year. Rates right now on long term are good unless you go back to the 1990s.
My basic question is whether I should do a bond ladder ranging from 2029 to 2046 to provide a steady income stream (assuming 3% inflation). This would get my wife to 80 (she is in relatively poor health) or just go with a bond fund. I project 50% of my portfolio could construct this ladder to 85% of my projected needs (given the inflation rate mentioned). The other 50% would be for long term equity investing and patching the shortfall if lifestyle adjustments can't do it or inflation is higher than anticipated.
Currently at $1.2M in IRA
Another $500K (including severance) in post tax cash and equivalents
No debt
$24K annual pension starting next year
Deciding on when to sign up for SS
Wife is four years younger and has health problems
Looking at about $110K needed per year pretax (hoping to get that number down but $30K for healthcare is a big driver).
Didn't take real advantage of equity run up (scared after Covid). Probably will kick myself the rest of my life over that.
Talking to three different advisory firms. Fee structure ranges from 0.91% (Fidelity) to 1.25%.
Got a crazy plan to at least secure most of my income until wife is 80 (not worried about myself - wife is the big cost driver)
Already have two TIPS coming due in 2026 and 2028. Looking to start a Treasury Bond Ladder (income stream) from 2029 to 2046 when wife is 80. Taking half my IRA and investing in either STRIPs or TIPs or Treasuries (or some combination of the three) forming a ladder that currently could cover about 80% of the shortfall using the $600K (using STRIPs as a surrogate for a mixed approach). This approach assumes 3% inflation. Yields on the STRIPs ranging from 4.4% to 4.7% according to Fidelity Ask price.
The other 50% would be aggressively invested in stocks and short term.
I do not like bond funds. Every advisor I talked to thinks this plan is DOA. I don't like the NAS of bond funds. What I need is a certain income stream for a given year. Rates right now on long term are good unless you go back to the 1990s.
Statistics: Posted by RetiredinIowa — Wed Jun 26, 2024 10:47 pm — Replies 3 — Views 202
