Need ideas placing 403b's into IRA

[teresa]

We are going to transfer 403b accounts to an IRA, and want simplicity and safety. Spouse will draw on this in addition to Social Securtity. Any ideas?

[flowerseverywhere]

the only idea I have is not to take advice from total strangers on an internet forum with such limited information about such a complicated question. Asking for trouble.

Maybe you should introduce yourself and get a feel for these forums first and as the weeks and months go by you'll get lots of great ideas you can adapt to your individual situation

[teresa]

Let me (re)-introduce myself. I was a member on the older boards, and have not visited the site for a few years. I've been involved with YMOYL since 1999, and still do the wall chart monthly. Through the years, I enjoyed the comments of seasoned FI members, who freely offered words of wisdom to questions posed on the forum. My posting reflects a need to hear how YMOYL folks would precede with taking a tax-deferred account, and turning it into an income stream. I am not new to investing, nor would I take the advice of strangers, and run with it without thought or confirmation. I yearned to hear something different than what the typical financial planner would suggest. Respectfully, Teresa

[lhamo]

I'm not at the retirement stage yet, but when I left my old job I converted my 403(b) to an IRA at Vanguard. I have it all invested in a target retirement fund -- I know the fees are a little higher than using a mix of their standard funds, but it was the simplest way to handle things at the time and I don't regret it. Vanguard has some of the lowest fees in the business, and I have been happy with their service.

You might get some useful advice on the Early Retirement forums at http://www.early-retirement.org/forums/ -- there are quite a few people there who are well versed in conservative, appropriate retirement investment strategies for people with an outlook inspired by YMOYL.

lhamo

[Rogar]

In additional to some of the target retirement funds, you might be interested in taking a look at Fidelity's Four-In-One index fund. It's a combination of four index funds, so has a low expense ratio, and also provides some simplicity by having to deal with only one fund, while offering a little diversity.

[benhyr]

You might get some useful advice on the Early Retirement forums at http://www.early-retirement.org/forums/ -- there are quite a few people there who are well versed in conservative, appropriate retirement investment strategies for people with an outlook inspired by YMOYL.


In addition to the excellent folks over at E-R.org, I'd recommend the Bogleheads over at diehards.org. And two excellent books. The Bogleheads Guide to Investing and The Bogleheads Guide to Retirement. They're a good buy on Amazon if your library doesn't have them.

[teresa]

I am a member of the Boglehead boards, and have read many of their recommended readings. My initial thought was to move things over into the Vanguard Target Income Fund, but the fact that it invests in Bond funds, and not individual bonds had me concerned. I liked the auto balancing, and low fees. I know that YMOYL does not like to put any money at risk, and this is what prompted me to post my question. Since my husband is 62, and likely to start drawing out of our retirement portfolio, I wanted simplicity and safety. I also realize we may have 20 or 30 years to go. We are good at saving, but not fully prepared for the withdrawl phase, and how to turn that into a safe income stream.

I appreciate your comments! I also checked out the Early Retirement website, which I had forgotten about.

[benhyr]

I'd poke a bit into the underlying bond fund to see what their top holdings are. There is certainly a bit of drag on a bond fund as you're paying the fund fee but I'd be ok with a low-fee Fidelity or Vanguard bond fund.

It'd also be worth running your numbers through FIRECalc (http://firecalc.com/) if you haven't yet. You'll run into it over on e-r.org all the time too. Basically, it runs your numbers through simulations using past market performance to give you an idea of success rates. Personally, I'd tweak things a bit to reflect my view of the future, but it's a great starting point. (note the tabs along the top to tweak every aspect)