Thank you very much for reading this post and reviewing my portfolio.
My goals are to add stability to the current portfolio and to create stable cash flow income streams.
Currently, I am working for about 26 weeks or less a year and would like to have the freedom to cut back work further whenever I feel like it. I see myself work for additional 2-7 years. However, the actual timeline is not firm yet. I don’t have pension or annuity for retirement. No kids. Housing-wise, I have been renting a comfortable apartment for 5 years although I do have a single family rental property. In addition, I am contemplating to purchase a get-away bungalow for personal leisure.
I’ve not used a financial advisor so far and will really appreciate your inputs.
1. Emergency funds: yes, but I am using it. I will have to rebuild the cash reserve soon in 2024.
2. Debt: the only debt is the mortgage of the rental property. Current mortgage balance is $155k, 30-year fixed @ 4.375%.
3. Tax Filing Status: Single
4. Tax Rate: 25-37% Federal (depending on my earned income & how I use the cash balance plan), 0% State.
5. State of Residence: WA
6. Age: 58 in 2 months
A. Desired Asset allocation: 55% stocks / 45% fixed-income or real estate. Desired International allocation: 12% of stocks. Approximate size of total portfolio is $3M.
B. Current Retirement Assets
Taxable @ Fidelity
0%Money Market
0.3%US Total Market Index Fund (FSKAX)(Exp Ratio 0.015%)
Roth IRA @ Fidelity
0%. Money Market
8.5% US Total Market Index Fund (FSKAX)(Exp Ratio 0.015%)
0.4% International Index Fund (FSPSX)(Exp Ratio 0.035%)
3.5% Private Real Estate Mortgage Fund (evergreen fund, REIT structured, annual preferred return 8%, annualized distribution ~10%)
0.8% Apple, Inc (APPL)
401k Pretax @ Fidelity
1% Money Market
11.5% US Total Market Index Fund (FSKAX), (Exp Ratio 0.015%)
2.6% International Index Fund (FSPSX)(Exp Ratio 0.035%)
1.7% Vanguard Small Cap Value ETF (VBR)(Exp Ratio 0.07%)
0.2% US Bond Index Fund (FXNAX)(Exp Ratio 0.025%), cost basis is about $10.9 / share in the portfolio.
0.3% Apple, Inc (APPL)
Cash Balance Plan @ Fidelity
0% Money Market
18.3% US Total Market Index Fund (FSKAX) (Exp Ratio 0.015%)
8.9% International Index Fund (FSPSX)(Exp Ratio 0.035%)
0.4% Vanguard Small Cap Value ETF (VBR)(Exp Ratio 0.07%)
2.2% US Bond Index Fund (FXNAX)(Exp Ratio 0.025%), cost basis is about $10.9 / share in the portfolio.
Private Real Estate
23.5%Private Real Estate Equity Fund (evergreen, REIT structured, annual preferred return 6%)
15.9%Private Real Estate Direct Investment (single family rental property in CA)
I also have the following retirement accounts but don’t use them to invest.
401k Roth account
401k After-tax account
Traditional IRA account
C.New Annual Contributions
I use 1-person C-corporation filed as S-corporation for work/earned income.
For 2024, $30,500 contribution to 401k pretax account.
For 2025, retirement contributions may be in the range of $50K – 80K. $31k to $77,500 to 401k pre-tax account
Not sure how much contribution to taxable account. I haven’t figured this out yet but need to build up emergency fund first.
D.Available funds: all my retirement accounts are self-directed using Fidelity platform. I can purchase anything that are doable with Fidelity.
Questions:
1. Do I need bonds in the fixed income portfolio? If yes, which bonds? I do have management risk in the 2 private real estate funds on the fixed income side.
2. How to construct a safe & quality fixed income portfolio that can provide about $10k cash monthly (not including social security) to cover basic living expenses?
What I have now is the private real Estate mortgage fund that provides at least 0.67% monthly distribution ( >$700) & the private real estate equity fund that provides 0.5% monthly distribution ($3,500).
3. Is it beneficial to split current Fidelity Internal Index Fund (FSPSX, 12% of portfolio) into separate Europe & Pacific index funds? For example, 6% VERUX & 6% VPACX. Can I buy Vanguard bonds via Fidelity?
My goals are to add stability to the current portfolio and to create stable cash flow income streams.
Currently, I am working for about 26 weeks or less a year and would like to have the freedom to cut back work further whenever I feel like it. I see myself work for additional 2-7 years. However, the actual timeline is not firm yet. I don’t have pension or annuity for retirement. No kids. Housing-wise, I have been renting a comfortable apartment for 5 years although I do have a single family rental property. In addition, I am contemplating to purchase a get-away bungalow for personal leisure.
I’ve not used a financial advisor so far and will really appreciate your inputs.
1. Emergency funds: yes, but I am using it. I will have to rebuild the cash reserve soon in 2024.
2. Debt: the only debt is the mortgage of the rental property. Current mortgage balance is $155k, 30-year fixed @ 4.375%.
3. Tax Filing Status: Single
4. Tax Rate: 25-37% Federal (depending on my earned income & how I use the cash balance plan), 0% State.
5. State of Residence: WA
6. Age: 58 in 2 months
A. Desired Asset allocation: 55% stocks / 45% fixed-income or real estate. Desired International allocation: 12% of stocks. Approximate size of total portfolio is $3M.
B. Current Retirement Assets
Taxable @ Fidelity
0%Money Market
0.3%US Total Market Index Fund (FSKAX)(Exp Ratio 0.015%)
Roth IRA @ Fidelity
0%. Money Market
8.5% US Total Market Index Fund (FSKAX)(Exp Ratio 0.015%)
0.4% International Index Fund (FSPSX)(Exp Ratio 0.035%)
3.5% Private Real Estate Mortgage Fund (evergreen fund, REIT structured, annual preferred return 8%, annualized distribution ~10%)
0.8% Apple, Inc (APPL)
401k Pretax @ Fidelity
1% Money Market
11.5% US Total Market Index Fund (FSKAX), (Exp Ratio 0.015%)
2.6% International Index Fund (FSPSX)(Exp Ratio 0.035%)
1.7% Vanguard Small Cap Value ETF (VBR)(Exp Ratio 0.07%)
0.2% US Bond Index Fund (FXNAX)(Exp Ratio 0.025%), cost basis is about $10.9 / share in the portfolio.
0.3% Apple, Inc (APPL)
Cash Balance Plan @ Fidelity
0% Money Market
18.3% US Total Market Index Fund (FSKAX) (Exp Ratio 0.015%)
8.9% International Index Fund (FSPSX)(Exp Ratio 0.035%)
0.4% Vanguard Small Cap Value ETF (VBR)(Exp Ratio 0.07%)
2.2% US Bond Index Fund (FXNAX)(Exp Ratio 0.025%), cost basis is about $10.9 / share in the portfolio.
Private Real Estate
23.5%Private Real Estate Equity Fund (evergreen, REIT structured, annual preferred return 6%)
15.9%Private Real Estate Direct Investment (single family rental property in CA)
I also have the following retirement accounts but don’t use them to invest.
401k Roth account
401k After-tax account
Traditional IRA account
C.New Annual Contributions
I use 1-person C-corporation filed as S-corporation for work/earned income.
For 2024, $30,500 contribution to 401k pretax account.
For 2025, retirement contributions may be in the range of $50K – 80K. $31k to $77,500 to 401k pre-tax account
Not sure how much contribution to taxable account. I haven’t figured this out yet but need to build up emergency fund first.
D.Available funds: all my retirement accounts are self-directed using Fidelity platform. I can purchase anything that are doable with Fidelity.
Questions:
1. Do I need bonds in the fixed income portfolio? If yes, which bonds? I do have management risk in the 2 private real estate funds on the fixed income side.
2. How to construct a safe & quality fixed income portfolio that can provide about $10k cash monthly (not including social security) to cover basic living expenses?
What I have now is the private real Estate mortgage fund that provides at least 0.67% monthly distribution ( >$700) & the private real estate equity fund that provides 0.5% monthly distribution ($3,500).
3. Is it beneficial to split current Fidelity Internal Index Fund (FSPSX, 12% of portfolio) into separate Europe & Pacific index funds? For example, 6% VERUX & 6% VPACX. Can I buy Vanguard bonds via Fidelity?
Statistics: Posted by FinallyHere — Tue Dec 03, 2024 12:11 am — Replies 1 — Views 93