Lon, we have been staying in the short to intermediate managed funds. Don't like index unmanaged funds right now as you need a good fixed income manager to navagate during these tough bond times.
I love Morningstar, and a lot of the information they offer is free...
Gwen, while there are many voices out there, stick to well known companies such as Morningstar and S&P. If you have a brokerage account, you can get a wide amount of information online without paying for it.
Chuck - Certainly utilizing an investment manager with expertise in this area is useful. For people who want to get more involved, purchasing individual bonds offers the advantage of the option to hold the bond to maturity in the event of continuously rising interest rates (and decreasing yields).
Chuck asked: With interest rates eventually rising, I plan to move a larger share of my portfolio from equities to bonds. The only way I know to do this is with bond mutual funds. Is this the best way for say a $50K investment within an IRA?
Chuck, the answer to question you asked is yes. As I have mentioned before, Vanguard and PIMCO have good funds. The question you didn't ask is when to make this move? As Lon and I have both stated, timing the market is a tough task. We don't know how long and steep rates will rise. We don't know if we will have a new Fed Chairman or woman next year. So, maybe the best thing to do is to dollar cost average into the bonds you have chosen to use.
Gwen, I believe this is a better question for an attorney. With my admitted limited knowledge of the subject, I believe you can transfer the assets to the trust; however, I don't believe this will make your children more likely to qualify for financial aid (unless the trust is an irrevocable trust moving funds out of your possession -- that may change things).
Sorry Provident, we don't see it in the queue. What's your question again?
Don't see yours either, zam. Can you try again?
Gwen, I agree, you need to speak to your attorney that established the trust.
Zam, sorry, there's a bit of a lag, but we've got both of your questions.
We received this query a few moments ago: Hi, I asked a question, it was posted, but credited to Arjyaman Roy. How did that happen?
Zam - Good question. Actually, if you retire early, you have the ability to take withdrawals from your 401k without penalty as early as age 55. However, if you decide to rollover funds from your 401k to an IRA, the 59.5 age restriction then applies. Also, you have the ability to withdraw the funds you have contributed to your Roth at any time -- you only can't withdraw the growth on the account early without a penalty. Still, having a taxable account to add to your tax diversification is never a bad idea!
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Zan, you are correct in your thinking about financing early retirement. There are withdrawals available in equal installments as early as age 55. But, since you have time to plan, I would begin thinking of building up your taxable assets.
Zam - Gotcha. Well you will have the ability to take distributions from your 401k at 55 if you do it right. Otherwise, yes, putting money in a taxable account to bridge that gap might be necessary.
Zam - Sorry, I only feel qualified to answer a question you didn't really ask. I'd suggest that 12 month of emergency reserve might be excessive. Is your job particularly volatile? In most cases, I'd suggest a 6 mo reserve gets the job done. Concerning the $100k invested in preferred stocks and exchanged traded debt, I'm not much of an expert in these areas but I'd suggest both tools can be part of a diversified portfolio -- just keep your allocation between asset categories appropriate.
I agree with your thinking on paring back and taking some profits. You are never wrong selling with a profit. Maybe shifting to shorter maturity bonds in a managed fund, vanguard and PIMCO are two good companies