[Hal :-)]

Originally Posted by l2ridehd

....
Personally I would do it myself using my own vs Vanguards plan. I had Vanguard do a plan for me and it was fine, they do the plan for free, but I like others better. I basically use the lazytraders.com 6 fund slice and dice with me own AA. Cheaper, easier, and better back tested results then the Vanguard plan proved to be.

I agree with that approach. Paul Farrell at Marketwatch does a good job tracking lazy portfolios.

[TF Hutch]

Originally Posted by l2ridehd

A true booglehead would never pay for that service when it is so easy to do yourself. Vanguard will do a free plan for you if you have 500K with them and then you can follow that plan. Why pay them .7% of assets when you can everything they will do in about 1 hour a month. Fee's kill returns. Adding the .7% to the .2% brings you to .9%, almost 1% in fee's.

A lower cost alternative would be Rick Ferri who does it for .5% and he uses all Vanguard and DFA index funds which are all very low cost. And you need 500K with him as well. Rick Ferri He has written several books on passive investing, follows the boglehead principals, and runs his own investment management company, Portfolio Solutions.

Personally I would do it myself using my own vs Vanguards plan. I had Vanguard do a plan for me and it was fine, they do the plan for free, but I like others better. I basically use the lazytraders.com 6 fund slice and dice with me own AA. Cheaper, easier, and better back tested results then the Vanguard plan proved to be.

How much are you willing to pay for a plan? 1% of a $500,000 is 5 grand each year. I don't choose to give 5 grand for someone elses guess, I can do that by myself for free. The downside is you can't blame anyone else if you do it yourself.

[l2ridehd]

I would pay zero for a plan. I only had Vanguard do one because it was free. I also pay as little as possible for mutual fund expenses. Keep your investment expenses as low as possible to maximize returns. I even go so far as to look at the stocks held by my dividend mutual fund and calculating would it cost me less to buy the individual stocks. It actually was very close

[allus70]

I am in the process of setting up my asset allocation for my IRA. Will be 61, just retired, not planning to draw on my IRA until 70. Vanguard advised a 50/50 distribution of assets spread equally between equity and bond funds. Having been burnt several times in the past, I suppose I am over cautious... perhaps too cautious. I was considering a distribution consisting of 1/3 equity funds and 2/3 bond funds.
I'm in this for the long haul, am I being too conservative?

[birdawg]

Originally Posted by allus70

I am in the process of setting up my asset allocation for my IRA. Will be 61, just retired, not planning to draw on my IRA until 70. Vanguard advised a 50/50 distribution of assets spread equally between equity and bond funds. Having been burnt several times in the past, I suppose I am over cautious... perhaps too cautious. I was considering a distribution consisting of 1/3 equity funds and 2/3 bond funds.
I'm in this for the long haul, am I being too conservative?

I dont think so, I just went with vanguard. and pillow time was most important to me

[JakefromNY]

I have retired after 20 years in Financial Services - specializing in retirement planning, estate planning and and servicing the elderly.

Generally, at your age a mix of 60% fixed income (bonds) and 40% equity is recommended for your TOTAL portfolio with the bond portion increasing as you get older. However, the true answer of what to do with your IRA lies in how your non-qualified portfolio is invested. If your non-IRA accounts are more aggressive then balance it with less risky investments.

Also, remember that interest rates are very low right now and they may (probably will) rise in the future. When they do rise, the resale value of your bond funds will decrease. While you will be earning a fixed rate of interest you may find that when you sell your fund, you have made very little profit.

I urge you to consult with a FINRA registered broker or representative and discuss your total financial situation.

[birdawg]

How about annuity's

[l2ridehd]

Annuities only benefit the person selling the annuity.

allus70, I personally would not be that conservative right now. As the next post pointed out, bonds are going to go down in value when interest rates rise. I would adjust your AA to something closer to 50/50 or even 55/45 right now. Especially if you do not need the funds for 9 or 10 years. I personal like age minus 15 for bonds vs the age in bonds common practice. But as suggested your AA should look at your total investments not just your IRA. Place most of your bond allocation in your IRA and your stocks in your non IRA accounts. Use 80% index funds for all your investments and maybe add a decent dividend fund to the equities to lower the risk you add by lowering the bond percentage. But pick an asset allocation your comfortable with while being a little aggressive and re-balance with a 5% drift. Re-balancing forces you to buy low and sell high.

A second option would be to select a target retirement fund that is about a 50/50 mix and let them manage it for the next 10 years. They will re-balance to move your AA every year to move you from 50/50 to 40/60 over the next ten years.

A third even simpler option, however not diversified enough for me, put 50% into Vanguard Wellsely (35/65 AA) and 50% into Vanguard Wellington (65/35 AA) and then each year move 10% of Wellington to Wellsely.

[birdawg]

Thanks The Wellsely fund is the one I chose. I feel comfortable with the short term bond index fund by vanguard [vbirx] for the next year or so, I also put 5% with vanguards reit [vgslx] Lets hope we have a change in 2013

[alexort]

Fidelity overall has MUCH better performance. See for yourself. I'm a financial analyst. Not to sound like I know everything, but I do this for a living. Vanguard does a great job of marketing themselves as the dirt cheap alternative. Both Fidelity and Vanguard are cheap.

Cheap is not everything. It's worth paying a few nickels for better performance over the long run. Fidelity has much better research, performance, and a great website. Not to mention, Fidelity customer service is outstanding. From personal experiences, I know that their back office is fully licensed, so they can talk shop with you.

I've used both. Fidelity is better.

Side note: You can buy Vanguard funds through Fidelity.

[batman911]

Alexort,

Money magazine consistently recommends Vanguard over Fidelity. If Fidelity is getting higher returns on an Index 500 fund, how are they able to do that? More risk? If Vanguard and Fidelity are investing in the same 500 companies equally, the only difference should be the management fees and we know Vanguard wins that contest.

[justjim]

As I've grown into this "senior mold" frankly I've gotten tired and a bit lazy. While I use to own individual stocks and keep up with the market daily, I just don't take the time or have the energy anymore. Both are fine companies and you will do well with either. I have T. Rowe Price manage my portfolio and they are also a fine company. Good Luck.

[l2ridehd]

Sidenote: You can buy Fidelity funds through Vanguard.

Which one is better is determined by your Investment Policy Statement which determines what you invest in. I disagree that Fidelity is better unless you want actively managed funds. I don't and if you study results no one should. Use index funds only. Total stock market, total bond market, total international. Use a small cap tilt if you want. But if you use only total market index funds then Vanguard wins every comparison. And it is because their ER is lower. An index is an index is an index. Or should be. And if it is mapping to an index correctly the only difference is the ER. Vanguard has lower expenses on almost every index fund.

[REDCART]

Originally Posted by batman911

Alexort,

Money magazine consistently recommends Vanguard over Fidelity. If Fidelity is getting higher returns on an Index 500 fund, how are they able to do that? More risk? If Vanguard and Fidelity are investing in the same 500 companies equally, the only difference should be the management fees and we know Vanguard wins that contest.

Anyone have knowledge or experience with Franklin's Income Fund (Franklin Templeton Group)?

[jmvalcq]

Most investors look at cost first, they should look at return first, taxes 2nd(however this being an IRA taxes are not a consideraton), and then cost. Sometimes it cost more to get a better return. Return should always reign supreme.