Allocation for retired couple

[Anonymous]

We are working with a financial advisor, and currently our allocation is 63% in equities. DH's 401K still has not been rolled over and has done quite well with over $3.5M at a 60/40 equities/bonds allocation. Not paying any significant fees for this 401K, but we are going to roll it over anyway considering he will soon be taking RMDs and we are also going to start Roth conversions and having it under the umbrella of our advisor's management we feel will take a lot of complexity out of it. We are getting a nice fee reduction to do this.

Advisor is proposing a 55/45 equities/bonds allocation for the new IRA. This would bring our entire portfolio to a 60/40 stock/bond allocation. He is allocating a lot to inflation protected bonds. I have asked him about the thinking behind this and we are scheduled to meet next week.

One thing to note is DH also has a $4.1M deferred comp account (not under advisor's mgmt) that will pay out approx $500K annually (before taxes) for the next nine years. This account is also invested at approximately 60/40 equities/bonds. On top of that our advisor manages the rest of our portfolio with the exception of a company stock account (which isn't doing great). Total portfolio is worth $15.8M and advisor is currently managing $5.1M. With the new IRA, that would increase to $8.6M

I ran all of this along with our current allocation through AI and they are saying we might be too conservative for our situation. Because DH is getting the deferred comp distribution every year, AI thinks we can afford to be a bit more aggressive with the rest of the portfolio.

Any opinions on this strategy? Should we push back on the 60/40 overall allocation?

[Anonymous]

You have $15 million, are paying an adviser $30k or whatever a year to give you advice and you are relying on AI and this message for a second opinion?

The real answer is there is no “right” asset allocation for you. You need to understand your goals and preferences and asking anonymous strangers or AI isn’t going to help you

[Anonymous]

Anonymous wrote:You have $15 million, are paying an adviser $30k or whatever a year to give you advice and you are relying on AI and this message for a second opinion?

The real answer is there is no “right” asset allocation for you. You need to understand your goals and preferences and asking anonymous strangers or AI isn’t going to help you

I am not interested in whether or not I should be asking strangers for opinions. Your opinion in this matter is useless to me and I knew I would get at least one of these. What's the point of an anonymous forum if you are going to be criticized for asking for opinions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You have $15 million, are paying an adviser $30k or whatever a year to give you advice and you are relying on AI and this message for a second opinion?

The real answer is there is no “right” asset allocation for you. You need to understand your goals and preferences and asking anonymous strangers or AI isn’t going to help you

I am not interested in whether or not I should be asking strangers for opinions. Your opinion in this matter is useless to me and I knew I would get at least one of these. What's the point of an anonymous forum if you are going to be criticized for asking for opinions.

That was actually good advice if you read it carefully instead of getting your back up.

Your post is the equivalent of saying “should I eat an apple or something else?” Or “Chat says I should visit Portugal for summer vacation, what do you think think?”

Except you have professionals who are paid lots of money to talk to you and understand where you are coming from and instead you come here and provide virtually no information and ask for advice.

Probably you’ll get people weighing in anyway but I’m not sure what the point is— seems like a waste of everyone’s time.

[Anonymous]

We have a similar amount of money and the way I look at it is that at least half of the money is for my children because it is very unlikely that we will ever need it. That half is invested in 100% equities because it will hopefully be a very long time before we both die and the kids inherit it. The other half is invested more conservatively but is still not a 60/40 split. FWIW, we do not use a financial advisor. When we did use one, they were too conservative, too costly, and did not beat the benchmarks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You have $15 million, are paying an adviser $30k or whatever a year to give you advice and you are relying on AI and this message for a second opinion?

The real answer is there is no “right” asset allocation for you. You need to understand your goals and preferences and asking anonymous strangers or AI isn’t going to help you

I am not interested in whether or not I should be asking strangers for opinions. Your opinion in this matter is useless to me and I knew I would get at least one of these. What's the point of an anonymous forum if you are going to be criticized for asking for opinions.

That was actually good advice if you read it carefully instead of getting your back up.

Your post is the equivalent of saying “should I eat an apple or something else?” Or “Chat says I should visit Portugal for summer vacation, what do you think think?”

Except you have professionals who are paid lots of money to talk to you and understand where you are coming from and instead you come here and provide virtually no information and ask for advice.

Probably you’ll get people weighing in anyway but I’m not sure what the point is— seems like a waste of everyone’s time.

Run along now. Your input is not appreciated.

[Anonymous]

Anonymous wrote:We have a similar amount of money and the way I look at it is that at least half of the money is for my children because it is very unlikely that we will ever need it. That half is invested in 100% equities because it will hopefully be a very long time before we both die and the kids inherit it. The other half is invested more conservatively but is still not a 60/40 split. FWIW, we do not use a financial advisor. When we did use one, they were too conservative, too costly, and did not beat the benchmarks.

Thanks for this perspective.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You have $15 million, are paying an adviser $30k or whatever a year to give you advice and you are relying on AI and this message for a second opinion?

The real answer is there is no “right” asset allocation for you. You need to understand your goals and preferences and asking anonymous strangers or AI isn’t going to help you

I am not interested in whether or not I should be asking strangers for opinions. Your opinion in this matter is useless to me and I knew I would get at least one of these. What's the point of an anonymous forum if you are going to be criticized for asking for opinions.

That was actually good advice if you read it carefully instead of getting your back up.

Your post is the equivalent of saying “should I eat an apple or something else?” Or “Chat says I should visit Portugal for summer vacation, what do you think think?”

Except you have professionals who are paid lots of money to talk to you and understand where you are coming from and instead you come here and provide virtually no information and ask for advice.

Probably you’ll get people weighing in anyway but I’m not sure what the point is— seems like a waste of everyone’s time.

I agree. While the PP might have been slightly blunt, their response was good. There is no correct asset allocation, there is a correct asset allocation for you though.

OP, I feel your reply was harsh if not rude. I think you should try and understand what your needs and wants will be in retirement and go from there. Start by determining what your yearly expenses will be as well as how much your yearly spending will be. That will help drive what you need. Also, you need to decide what you’d be comfortable with as an asset allocation.

[Anonymous]

Considering you will be getting $500 K a year for 9 years, I would consider 60/40 very conservative for the rest of the portfolio. I would have more of an 80/20 split there, then lower it in the last three to five years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You have $15 million, are paying an adviser $30k or whatever a year to give you advice and you are relying on AI and this message for a second opinion?

The real answer is there is no “right” asset allocation for you. You need to understand your goals and preferences and asking anonymous strangers or AI isn’t going to help you

I am not interested in whether or not I should be asking strangers for opinions. Your opinion in this matter is useless to me and I knew I would get at least one of these. What's the point of an anonymous forum if you are going to be criticized for asking for opinions.

That was actually good advice if you read it carefully instead of getting your back up.

Your post is the equivalent of saying “should I eat an apple or something else?” Or “Chat says I should visit Portugal for summer vacation, what do you think think?”

Except you have professionals who are paid lots of money to talk to you and understand where you are coming from and instead you come here and provide virtually no information and ask for advice.

Probably you’ll get people weighing in anyway but I’m not sure what the point is— seems like a waste of everyone’s time.

I agree. While the PP might have been slightly blunt, their response was good. There is no correct asset allocation, there is a correct asset allocation for you though.

OP, I feel your reply was harsh if not rude. I think you should try and understand what your needs and wants will be in retirement and go from there. Start by determining what your yearly expenses will be as well as how much your yearly spending will be. That will help drive what you need. Also, you need to decide what you’d be comfortable with as an asset allocation.

OP here. I don’t think it is rude considering the pompous tone of the response.

[Anonymous]

All depends on your burn rate and goals for multigenerational wealth. You should probably try to 2x or 3x that pot while the market is hot— maybe try to get in on SpaceX, CRWV or SNOW.

[Anonymous]

First of all, I would ditch the advisor because you are getting ripped off. But quite frankly, you can do whatever you want because you are bringing in 500k/yr pre tax from deferred comp. How could you even possibly spend that much in a year unless you are just pissing it away on dumb stuff. I travel the world 6 months out of the year on 100k income for perspective.

And there is basically no difference between 55% bonds and 60% bonds You need to look hard at your willingnes to stomach volatility vs financial goals for heirs/charity at this point.

[Anonymous]

Husband makes a pile of money, and OP asks AI and anonymous strangers how to manage it.

The capabilities of this couple are . . . widely varied, is as nice as I can put it.

[Anonymous]

Anonymous wrote:Husband makes a pile of money, and OP asks AI and anonymous strangers how to manage it.

The capabilities of this couple are . . . widely varied, is as nice as I can put it.

LOL I am the OP, and while DH is brilliant at some things, managing money is not one of them.

[Anonymous]

If I am reading this correctly, then you have 11.7M investments + 4.1M that is being paid out 500K/year for 9 years.

Are you going to spend 500K/year? I'm guessing a portion of that will be reinvested.

The way I look at it is how much can I afford to lose. I am conservative, and I assume if we have a crash in retirement we need to be able to withstand a 50% loss in equities and a protracted flat period. So, I half our equities combine with bonds and from there determine what combination gives us about 3% return to live on.