To: Mathjak107 (annuity, bonds, IRA, growth fund)

[rose3408]

Hello Mathjak107:

Desperate need your input and wealth of knowledge. I'm 57 yrs young, will need to work another 10 yrs due to divorce, etc. To say I am way behind on retirement investments is an understatement but due to not only a divorce 10 yrs ago, I was unable to save, plus went thru several job losses.

I am now back on my feet, albeit, too late, but I take 10% out of my 401k at work, they match 6% and I also put another $175 into a savings each pay period which I would also like to start putting into a Roth IRA. I just want to make sure I have enough liquid assets put aside into a savings account before doing so (goal is $25k).

I attached a picture of my presents investments, and when it comes to knowing which funds I should be contributing at work - I'm lost. I then opened up a separate account with FIDELITY because that is who our Company uses at work, and I rolled over an IRA I had thru a previous employer in the amount of $4,500 about two months ago into PRPFX and I have already lost over $200!

Please tell me where I am going wrong and which funds I should be invested in. Because I will desperately need my funds within about 10 years I'm petrified. I do have a very small pension I will receive (only about $225 a month) and as you can see from my present investments, I will also get around $167 a month from the Annuity with Modern Woodmen which should be around $30 by the time I reach 67.

I've talked to "financial advisers" and they only want you to invest in the companies they work with and then of course they also make a commission. I'm so confused an really need your help.

Thank you so much! I hope I am attached my investment choices chart correctly.

[mathjak107]

to be honest i can only give opinions. im not allowed to give financial advice to anyone , im not licensed and im still learning my way around the financial world myself.


i just pick the brains of those smarter than me .

no one says my opinions are the correct ones either. i thought untraded reits were a good deal only a year ago but have since gotten burned by one myself.

markets need cycles and time to work and do their thing. to be successful you need to be able to buy time as well as assets.

10 years is not enough time to guarantee you will be ahead in any equity investments so only money you dont need for at least 15 years should be in stock funds.

prpfx went from the neutral concept it was founded with into being weighted for inflation.

it contains more holdings that respond to inflation more than anything else.

its still a good fund for protecting your assets and you will never be devatstated by any event but it was never designed as a growth fund.

like any investment it will go up or down.


i see you have an annuity in your 401k. it never made much sense to me having a tax deferred vehicle in a tax deferred vehicle. that was probably a poor choice but to undo it may be costly.

with 10 years to go before hitting the money you need to start to wind things down and position them for retirement income. that doesnt mean you wont have equity investments, it only means going forward you want money that wont be used to eat for 15 years or longer in equities.

the rest should be positioned to give you streams of income.
you can make the transition years before as you dont want the next earthquake or terrorist attack destroyng your account right before you were going to sell and re-position.

i would recommend getting ray lucias book the buckets of money retirement solution , the ultimate guide to income fo life .

you can read it ,get an education and make informed decisions about all the products and vehicles out there . the book will then guide you as to how to break whatever money you do have into safe money for spending and money for investing.


a good plan isnt as simple as just throwing money into funds . that plan becomes very important the closer you get to retiring.

many pre-retirees left everything status quo right up to 2008 until they were ready to retire and in the blink of an eye they were down 50% and with it there near term plans to retire were squashed.

the closer you are to retirement the more you want to count on the science of money making things okay and less on the art.

the art of money is being a great stock or fund picker, its about timing, its about predicting world events ,hurricans,terrorist attacks,wars etc.

the study of the science of money says that given enough time everything recovers . the science of money says you need at least 15 years to get 99% successful results that are as good as money in the bank from your diversified stock funds .
your plan has to buy time and buy assets that match the time frames you will utilize the money.

although i have mentioned it hundreds of times my retirement plan uses 3 buckets . bucket 1 has safe secure money like cd's, gic's, bank,money market,annuity income . it contains 7 years of withdrawls .

bucket 2 has bonds,bond funds, income reits and conservative income funds, that contains another 7 years of income which will refill bucket 1.

bucket 3 is all the money i wont use for 15 years and out and its in stocks,gold,reits ,funds and anything else i want to take fliers on. it will refill bucket 2

its a plan that buys assets and buys time.

is it 100% failure proof? heck no .. but its a plan and thats better than no plan to me.

even if the bottom line is mathamatically no different than a plain old hodge podge of stuff to me it feels better and im more comfortable going through the downturns in it.

that makes all the difference in the world to me.

in the journal of financial planning there was a study by spitzer and singh who looked at that very issue. the conclusion was where you tap for your spending money makes a big difference in the overall longevity of your money.

[ragnarkar]

I'm not in the position to give comprehensive financial advice to you either but I'll point you in the right direction.

Enter your city (or the nearest big city) and state, and you'll get a list of charterholders. Call or email some, explaining them your situation, your needs, your risk tolerance, etc. and see if they're willing to work with you to come up with an effective plan. Good luck.

[TechGromit]

Originally Posted by mathjak107

to be honest i can only give opinions. I'm not allowed to give financial advice to anyone , I'm not licensed and I'm still learning my way around the financial world myself.

I have always wonder about this statement, have people been sued in the past giving bad investment advice? And if so, why can't the same be applied to recommendations on where to buy a good sandwich? What stereo is better then another? Which car is better? After all shouldn't stereo and car salespeople be equally certified to give buying advise?



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[mathjak107]

giving financial advice requires a license .... could someone sue someone for giving advice who has no fiduciary responsibility ? i would think not but why even leave yourself open to that.

opinion is one thing but someone asking what to do and you telling them could be a gray area.

[CaptainNJ]

every hear of a company called shufro, rose & co? Shufro & Rose, LLC Wealth Management since 1938

my mom seems to be having a lot of anxiety over her finances lately. she has been using a guy from morgan stanley and is now considering someone from that other company as per a friend's recommendation. i think her returns arent what they once were and her spending is outpacing her income. she wants me involved in her decision, right now im intending to tell her to stick with the guy from morgan stanley and look to reduce her expenses.

[Info Guy]

Series 7?

[mathjak107]

Originally Posted by CaptainNJ

every hear of a company called shufro, rose & co? Shufro & Rose, LLC Wealth Management since 1938

my mom seems to be having a lot of anxiety over her finances lately. she has been using a guy from morgan stanley and is now considering someone from that other company as per a friend's recommendation. i think her returns arent what they once were and her spending is outpacing her income. she wants me involved in her decision, right now im intending to tell her to stick with the guy from morgan stanley and look to reduce her expenses.

never heard of them but not being in the business myself i havent heard of most companies in the business.

the only advice ill give you is this ,it maybe the most important advice anyone gives you for dealing with retirees.

there is a big difference in the advisor you need when your in the accumulation stage and the advisor you need in the decumulation stage.

advisors are a dime a dozen in the accumulation stage. they can tell you what to buy ,how to allocate ,about college funding,tax planning while in your family raising years etc.


advisors who specialize in the 2nd half of the game are few and far between.

these are the likes of guru ed slott, ray lucia .

these are masters of tax planning, of withdrawl stratagies. they know how to manipulate with life insurance to bypass mandatory withdrawls and taxes.

she needs someone who specializes in the decumulation stage not a run of the mill advisor.

[CaptainNJ]

intereting, thanks. i will consider that when we talk.

[theoldnorthstate]

Mathjack, a similar question:

Anticipation of selling my home and downsizing seems unlikely now, given I live in FL and bought at the top of the market. So I am considering renting my house out to cover the mortgage, and will probably sell when the dollars sort out.

Would using my house as investment income, or future sell be worth considering for bucket 3?

Thanks for your thoughts