Where do I invest?

[minne55402]

Hello
I just found this forum and wanted to ask you all a questions.

My husband and I retired last year. We're both 67.

Right now, we are living off social security and about a $1000/month of income from a part time job.

Our house is paid for and our expenses are the basic necessities of life. We do have about $25k in the bank for emergencies.

We have an 800k portfolio that is 70% stocks, 5% bonds and 25% cash from my former 401k, mostly because I'm unsure where to put the cash.

I'd like to get the cash invested, but I think the bond and stock markets may be a bit high at this point.

I'd like something "safer", but I know that comes differing risks also.

My son said we can invest in things like utilities (XLU) and some others and push nearly a 4% yield, but he did say nothing is guaranteed. We used to have an advisor but he retired and wasn't much of a help the last 15 years anyway.

If we can just live off dividends that'd be great as we'd like to leave money to the grandkids, but we're not eating soup out of a can to do so.

I'm fairly veresed on the market, just I'm at a bit of a loss at this point on what to do.


Feel free to be specific!

[Petunia 100]

If it were me, at age 67 and already retired, I would re-balance my 800k portfolio to about 50/50. I would put all of the money into low-cost index funds. It would look something like this:

25% Total US Stock Market Index
15% Total Intl Stock Index
10% Reit Index

25% Total Bond Market Index
25% Tips

I would start drawing down at the rate of 3% (conservative) to 4% (moderate) per year. I'd do 3% if leaving a nest egg to my heirs was really important to me.

I would re-balance once per year.

You and hubby have done a good job saving/investing. Now, enjoy what you have worked so hard for.

[feh]

I agree w/ Petunia - first thing you need to do is reduce your risk. 75% equities at 67 is pretty dangerous.

I also like the proposed portfolio, but you should really ask these questions at the bogleheads forums. Not that people aren't helpful here, but there is more knowledge and more help over there.

[bjl584]

You could, in theory, invest the whole $800K into dividend yielding stocks and funds. A 5% yield would get you $40K a year. But, that is risky. Especially since you are both 67 and the 800K represents basically your entire retirement nestegg.

You could structure it so that say half of it is invested in dividend yielding securities and the other half is in a mix of cash and bonds. You could get a nice draw off of it without having to touch the principal and have it be "reasonably" safe.

It may be best to seek out an advisor and state your intentions.

[qualityliving]

There are several ways to save money but you can earn maximum profit by investing money into real stat business. You have to pay lower taxes and will get positive cash flow. You can get maximum equity growth and benefits of inflation. So that I will suggest you to invest money in real stat business.