Hello! I am new here. As a long time "long term" growth investor (I've been a low cost index fund person - practicing allocation along the same thought pattern as Paul Merriman for years) - but now with my dad going into long term care - this severe drawdown (on a shorter time horizon) is completely new to me.
I'd be forever grateful to get another set of knowledgeable eyes on this plan I have cobbled together with AI. I don't trust it and want a human to look at this to see how it can be improved - and where it has gone horribly wrong.![:)]( "Smile")
Currently, my parents have a SURPLUS of $1800 a month. (Income - Expenses).
Starting in less than a week, a new $8000 /mo long term care expense will hit every single month. My dad is 82 and has major dementia. My mom is almost 79.
Here's the current state of their portfolio:
1. Current State Portfolio
Cash Accounts:
UFB High-Yield Savings Account: $111,264 (earning 4% APR).
Chase Checking Account: $1,867.02 (immediate liquidity).
Schwab Portfolio:
Total: $838,380.66
Equities:
iShares Core S&P 500 ETF (IVV): $192,430.35
iShares Core S&P Mid Cap ETF (IJH): $95,811.00
iShares Core S&P Small Cap ETF (IJR): $36,553.49
iShares Russell 2000 Value ETF (IWN): $21,876.40
Vanguard Small Cap Value ETF (VBR): $7,232.40
Dodge & Cox Stock Fund (DODGX): $26,414.57
Dodge & Cox International Stock Fund (DODFX): $29,639.85
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX): $52,342.51
Vanguard International Explorer Fund (VINEX): $11,904.96
Tweedy, Browne International Value Fund (TBGVX): $19,795.41
Fixed Income:
Vanguard Total Bond Market ETF (BND): $50,282.63
Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX): $100,796.75
Vanguard California Intermediate-Term Tax-Exempt Fund (VCAIX): $55,666.87
PIMCO International Bond Fund (USD-Hedged) (PFORX): $25,055.46
Vanguard High-Yield Corporate Fund (VWEHX): $54,409.11
Real Assets:
Vanguard Real Estate ETF (VNQ): $8,345.32
Vanguard Real Estate Index Fund Admiral Shares (VGSLX): $38,776.43
Cash in Schwab Account:
Schwab Cash Position: $1,895.36 (across accounts).
Total Schwab Portfolio: $838,380.66
Total Assets Across All Accounts: $951,511.68
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95% of this is in taxable accounts - they have very little left in the IRAs.
Now, without considering capital gains taxes (I will visit this topic with my accountant, and do a dollar cost averaging approach to get to this future state so they don't get crushed with taxes...)
2. Future State Portfolio
Cash and Cash Equivalents (30%): $285,453
UFB High-Yield Savings Account: $111,264 (existing balance, earning 4% APR).
Chase Checking Account: $1,867 (immediate liquidity).
CD Ladder: $150,000 in staggered maturities (6, 12, and 18 months, earning ~4.5%).
T-Bills: $22,322 in 3- and 6-month maturities (earning ~4.5%).
Bonds and Fixed Income (35%): $333,029
TIPS (Treasury Inflation-Protected Securities): $150,000 (via ETF: SCHP or TIP, yield ~2%).
Investment-Grade Corporate Bonds: $120,000 (via ETF: LQD or mutual fund: VBTLX, yield ~3.5%).
Municipal Bonds (Tax-Free): $63,029 (via ETF: CMF, yield ~3%).
Equities (25%): $237,878
Dividend Growth ETFs: $150,000 (e.g., SCHD or VIG, yield ~3%).
Defensive Sector ETFs: $50,000 (e.g., XLV for healthcare, XLU for utilities, yield ~3.5%).
International Dividend ETF: $37,878 (e.g., VXUS, yield ~3.5%).
Real Assets (10%): $95,151
REIT ETFs: $60,000 (e.g., VNQ or SCHH, yield ~4.5%).
Gold ETFs: $35,151 (e.g., GLD or IAU, no yield).
Total Portfolio: $951,511.68
Additionally, my dad has a 9 unit property and a single family home rental - above and beyond our family home. All income of these properties has been factored into the "surplus" of $1800 (which is about to be obliterated by the new $8000 / mo expense).
There is a lot of equity in the properties, however. About 3 million. So there's no risk of going poor - just trying to preserve and manage as best I can.
Any help you can give here would be such a big help. The iron is, my dad was president of the AAII chapter here, locally, for many years. He taught me all I now about growing a portfolio, smartly, over the long term while young. But he taught me nothing about retirement and the drawdown stage - much less a severe situation like this.
Above the sadness I feel for my dad, who now sometimes doesn't know I'm his son - as the oldest I am tasked with managing their finances through this.
Anyway, thanks to anyone who has some thoughts about this future state scenario, and maybe any suggestions you might have.
Nervous and sad in California,
Dan
I'd be forever grateful to get another set of knowledgeable eyes on this plan I have cobbled together with AI. I don't trust it and want a human to look at this to see how it can be improved - and where it has gone horribly wrong.
Currently, my parents have a SURPLUS of $1800 a month. (Income - Expenses).
Starting in less than a week, a new $8000 /mo long term care expense will hit every single month. My dad is 82 and has major dementia. My mom is almost 79.
Here's the current state of their portfolio:
1. Current State Portfolio
Cash Accounts:
UFB High-Yield Savings Account: $111,264 (earning 4% APR).
Chase Checking Account: $1,867.02 (immediate liquidity).
Schwab Portfolio:
Total: $838,380.66
Equities:
iShares Core S&P 500 ETF (IVV): $192,430.35
iShares Core S&P Mid Cap ETF (IJH): $95,811.00
iShares Core S&P Small Cap ETF (IJR): $36,553.49
iShares Russell 2000 Value ETF (IWN): $21,876.40
Vanguard Small Cap Value ETF (VBR): $7,232.40
Dodge & Cox Stock Fund (DODGX): $26,414.57
Dodge & Cox International Stock Fund (DODFX): $29,639.85
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX): $52,342.51
Vanguard International Explorer Fund (VINEX): $11,904.96
Tweedy, Browne International Value Fund (TBGVX): $19,795.41
Fixed Income:
Vanguard Total Bond Market ETF (BND): $50,282.63
Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX): $100,796.75
Vanguard California Intermediate-Term Tax-Exempt Fund (VCAIX): $55,666.87
PIMCO International Bond Fund (USD-Hedged) (PFORX): $25,055.46
Vanguard High-Yield Corporate Fund (VWEHX): $54,409.11
Real Assets:
Vanguard Real Estate ETF (VNQ): $8,345.32
Vanguard Real Estate Index Fund Admiral Shares (VGSLX): $38,776.43
Cash in Schwab Account:
Schwab Cash Position: $1,895.36 (across accounts).
Total Schwab Portfolio: $838,380.66
Total Assets Across All Accounts: $951,511.68
-----------------------------------------------------------------
95% of this is in taxable accounts - they have very little left in the IRAs.
Now, without considering capital gains taxes (I will visit this topic with my accountant, and do a dollar cost averaging approach to get to this future state so they don't get crushed with taxes...)
2. Future State Portfolio
Cash and Cash Equivalents (30%): $285,453
UFB High-Yield Savings Account: $111,264 (existing balance, earning 4% APR).
Chase Checking Account: $1,867 (immediate liquidity).
CD Ladder: $150,000 in staggered maturities (6, 12, and 18 months, earning ~4.5%).
T-Bills: $22,322 in 3- and 6-month maturities (earning ~4.5%).
Bonds and Fixed Income (35%): $333,029
TIPS (Treasury Inflation-Protected Securities): $150,000 (via ETF: SCHP or TIP, yield ~2%).
Investment-Grade Corporate Bonds: $120,000 (via ETF: LQD or mutual fund: VBTLX, yield ~3.5%).
Municipal Bonds (Tax-Free): $63,029 (via ETF: CMF, yield ~3%).
Equities (25%): $237,878
Dividend Growth ETFs: $150,000 (e.g., SCHD or VIG, yield ~3%).
Defensive Sector ETFs: $50,000 (e.g., XLV for healthcare, XLU for utilities, yield ~3.5%).
International Dividend ETF: $37,878 (e.g., VXUS, yield ~3.5%).
Real Assets (10%): $95,151
REIT ETFs: $60,000 (e.g., VNQ or SCHH, yield ~4.5%).
Gold ETFs: $35,151 (e.g., GLD or IAU, no yield).
Total Portfolio: $951,511.68
Additionally, my dad has a 9 unit property and a single family home rental - above and beyond our family home. All income of these properties has been factored into the "surplus" of $1800 (which is about to be obliterated by the new $8000 / mo expense).
There is a lot of equity in the properties, however. About 3 million. So there's no risk of going poor - just trying to preserve and manage as best I can.
Any help you can give here would be such a big help. The iron is, my dad was president of the AAII chapter here, locally, for many years. He taught me all I now about growing a portfolio, smartly, over the long term while young. But he taught me nothing about retirement and the drawdown stage - much less a severe situation like this.
Above the sadness I feel for my dad, who now sometimes doesn't know I'm his son - as the oldest I am tasked with managing their finances through this.
Anyway, thanks to anyone who has some thoughts about this future state scenario, and maybe any suggestions you might have.
Nervous and sad in California,
Dan
Statistics: Posted by eggerda — Sun Jan 26, 2025 5:35 pm — Replies 6 — Views 480