Question: We’re hoping to get your advice on an investment we’re considering outside of our retirement accounts. I’ll try to keep this brief. My wife and I have paid off the mortgage on our primary residence, and the only debt we have is a rental home that we plan to sell eventually (it currently covers Read more »
Is This a Reasonable Allocation for a Working-Age Investor?
Question: I’m considering changing our retirement portfolio allocations as indicated below. Would you mind commenting on this? Nearly all is in tax sheltered retirement accounts and we probably will begin easing into retirement in 12 years at age 60. I read your blog and think it makes sense for us to maintain separate asset classes Read more »
Why Pay an Adviser a Quarterly Fee Just to Invest in Index Funds?
Question: As an investor, I have always tried to invest in very low-cost index funds, since costs are one of the few things in my control other than the asset mix. Paying a percentage of my assets every quarter for management (even very good management) somehow feels “wrong” to me. What am I missing? Answer: Read more »
What’s the Best Global Allocation?
Question: About ten years ago, you recommended the following asset allocation: 40% US Total Stock Market Index Fund 30% European Stock Index Fund 20% Pacific Index Fund 10% Emerging Markets Index Fund I see the 10-year average return for the Pacific fund is somewhat below the others. Do you still recommend this asset allocation? Answer: Read more »
Do You Recommend Using a Credit Card to Pay Regular Monthly Bills Rather than a Bank’s Bill-Pay System?
Question: Do you recommend using a credit card to pay regular monthly bills rather than using a bank’s bill pay system? Answer: For people who always, without exception, pay their entire credit card bill each month, the benefits of airline miles, hotel points, and other perks can be substantial. For people who are inclined to Read more »
How Useful Are REITs in a Portfolio?
Question: What role, if any, do you see for Real Estate Investment Trusts in a retirement portfolio? Why? Are there any REIT funds you prefer? Answer: As anyone who has been reading me for a while knows, I believe that ownership of businesses providing useful goods and services is the foundation of wealth creation. Equity Read more »
How Much Can You Safely Withdraw from Your Portfolio Each Year in Retirement?
For around 20 years, financial advisers and academics have been actively wrestling with the question of the safe withdrawal rate from a portfolio. The seminal article in the field is by William Bengen, entitled “Determining Withdrawal Rates Using Historical Data.” It was published by the Journal of Financial Planning in October 1994 and later chosen Read more »
When Should I Consider an Annuity and What is the Best Type?
To follow up on last week’s question, let me now say that annuities DO in fact, have their place. To cut through all the complexity, the most important single reason to invest in an annuity is to protect you from outliving your assets. “Outliving your assets” is not a meaningful concern for those who have Read more »
When Is it Definitely NOT Appropriate to Purchase an Annuity?
Dear Less: My wife and I are 55 and 53 respectively, and we have $160K and $220K (also respectively) in 401K plans currently sitting in accounts at [firm name removed] (a lady my Mother-In-Law recommended). We consolidated 3 plans into 2, and I am trying to determine if annuities are a good way to go Read more »
See You In December
November is a time when I review all of my client accounts for year-end tax planning, and this year I’m also hoping to put together an eBook to help all of you do-it-yourselfers do it yourself. Look for me here on the first Friday of December, and wish me luck on the eBook.