Planning the Joint Retirement Portfolio
Posted on December 08, 2006 by Him and tagged investments, retirement
A few months ago, Her posted about the idea we had of investing into our retirement accounts as if it were one retirement portfolio. Great idea, right? Let's pool our retirement money and fix our allocation and goals as one. Super-duper. Yeah.
Well, since then, we've done nothing to go forward with that plan. We have been investing into our own retirement accounts not taking into account the larger picture. But looking at our monthly net worth statements, we haven't been doing too badly. That doesn't mean that we couldn't be doing better, or that our current allocation may set us up to do much worse.
Over the next month or so, we're going to be doing some research and taking action on a step-by-step basis on this whole retirement thing. I'm thinking it may look a little like this:
1) Set up retirement goals, a la the magic retirement number.
2) Put all of our retirement accounts on the table, and figure out how we're doing, and what we're invested in.
3) Figure out the large scale allocation, i.e. how much to put into stocks and bonds. I guess this could also fall into the category of finding out our risk tolerance.
4) Within our stocks/bonds aloocation, decide how we will allocate our stocks into different market caps and sectors, and the same for bonds.
5) Educate ourselves about different investment vehicles. Sure we know the basics of mutual funds, index funds, and the like, but I personally don't know much about bonds, or about the inner workings of funds, or why I'd want to pick an indexing ETF vs. an index fund. I have no idea what I just wrote.
6) Select investments or rebalance holdings that we currently have.
7) Sit back and let the market do its thing, and reassess every quarter or semi-annually.
Steps 1-3 are pretty straightforward. Step 5 is the daunting one, but it will be good for us as it will allow us to expand our knowledge of investments so that future decisions will be much easier.
Hopefully, by the end of the year we'll have a rockin' portfolio.
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Shevvi | Dec 9, 2006
This is the topic that got us to go to a professional. After two years of this conversation we finally took all of our statements into an advisor and twice a year she looks at all of this and re-balances for us. Also she looks at the fund changes from our employers. We pay her a flat fee for this and it is well worth it. We were both heavily invested in the same fund that was doing poorly and never noticed.
TBH | Dec 9, 2006
We have this dilemna too, made worse by a 13-year difference in our ages. I'll be interested to see how you guys mesh your portflios and your goals.
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