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we don't really use buckets , i just run two portfolio's which work out to a comfortable beta together . the fidelity insight income and capital preservation model make 2/3's of our overall investments and 1/3 the growth and income model .
about 35% overall equity but a lot of the bond budget is high yield as a less volatile proxy for stocks . so far it has been out performing stocks with almost 1/2 the volatility of the s&p 500
the only bucket we have is really 2 years withdrawals in laddered cd's which are through fidelity and can be resold at any time like a bond . .
Last edited by mathjak107; 06-10-2016 at 09:18 AM..
I didn't realize that I could ladder CDs in a qualified account. I thought you meant withdrawal to buy the CDs.
You can buy nearly any financial instrument in an IRA. There are a few exceptions, but stocks, bonds, mutual funds, money market funds, CDs, etc, are all fair game.
Can you expound on using CDs in an IRA I'm still working but when I retire…let's see if I have this right….
Right now my 401k, and defined contribution plan are in balanced, "target" and index funds…. with a major low cost fund family that is the administrator of our work accounts. I also have my own Roth IRA, with the same company, and it's in an index fund.
Are you all saying that upon retirement -- and "rolling that over" to a Traditional IRA -- that there's a benefit to looking at putting some of that into CD's….I was just going to keep in in the same "funds" -- but as my own Traditional IRA instead of the 'company 401k.'
And you're saying the benefit of CD is you're locking in at least some predictable gain?
So when the CD's come up for renewal you can renew them or redeem them/cash them out…..if you do that a year at a time won't that bump you into the next tax bracket??
I'm not promoting CDs or any other particular instrument. The comment was to put dollars in someplace safe for the early years of retirement. That could be CDs, a money market fund, a short-term bond fund, a ladder of treasuries, etc. Honestly, the interest from any of these safe securities is almost nothing today, so using the "coffee can" investment account would be nearly as good . I don't think Fidelity offers that one, though!
I didn't know that either! Is that correct? Some info would be great!
Beachsportsfan: if it makes sense to delay until FRA to get that extra 6% a year, why isn't it worth to wait until 70 for the extra 8%/yr...just curious.
RTB was referring to purchasing an annuity with a tax deferred plan so no taxes are paid except on the payments as they occur. If the rates are good enough, that is a safe and predictable plan. CDs within an tax deferred plan would be the same effect...guaranteed ROR/no sequence risk.
I'm comfortable waiting until FRA, could I wait for 70? It will depend on changes to my situation, how are my and my other half health, how is our 401k doing, how SS changes if any etc. I think 80-85 is my probable expiration date.
1.75 tracks current inflation and zero chance of loss in a meltdown. Thats the allure. Is there really a difference between a 5 year CD AND a 5 year annuity besides monthly payments from the annuity?
it is silly buying cd's in a deferred account . they spin off so little interest why take up the space when you can have other money fully invested in the deferred stuff .
especially if you are delaying ss . you may find you need as low a taxable income as you can get early on for aca subsidy or medicare premiums are based on magi .
1.75 tracks current inflation and zero chance of loss in a meltdown. Thats the allure. Is there really a difference between a 5 year CD AND a 5 year annuity besides monthly payments from the annuity?
only difference isjust the way they are taxed and the way they handle distributions . otherwise they are close . you can roll un-needed myga's over when they come due and hold off taxes . you can't do that with cd's
Last edited by mathjak107; 06-10-2016 at 12:49 PM..
Thanks.
I really didn't get it either. But thought I'd ask more about that so I could maybe learn something.
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