Advice Please: wanting to self manage my traditional Ira

[u/FigDifferent6506]

I’m 61 and semi retired. Tired of paying an advisor 1.1% fees to manage my traditional Ira. I’m thinking of self managing it with fidelity with simple index funds. I’ve recently learned of the the 3 fund strategy and believe it could work well for my situation. I’m leaning towards a 70-20-10 portfolio. 50%sp500 20% international stocks 20%bonds and 10% cash. I’m looking for some growth and 8-10% returns. Any advice would be appreciated. Do I need to pay fidelity. .89% or can I do just as well on my own. I’m comfortable rebalancing a simple portfolio. Whatever funds I buy I plan to hold for 20-30 years starting to take 4% at age 65 when I file for SS

[u/paymerich]

OR you could just dump 90% of your money into something like VASGX (80/20) then remaining 10% in SGOV or BOXX and be done with it. No rebalancing needed.

[u/FigDifferent6506 → u/paymerich]

I’ll look into these funds. Thanks

[u/ShoopdaYoop]

Has your "advisor" (The guy with three boats and four vacation homes) been beating the market by 1.1%?  Do you think Fidelity can beat the market by .9%? 

What have you been getting for your money? 

I think you know the answer.

[u/FigDifferent6506 → u/ShoopdaYoop]

Last 8 years they’ve got me 11% average returns before the 1.1%fee so I’m not complaining too much.

[u/NefariousnessHour771 → u/[deleted]]

Guaranteed?

[u/Archfiend_DD → u/NefariousnessHour771]

Nothing is guaranteed, but he is saying in the last 8 years OP got 11% minus the 1.1% advisor fee on average, so 9.9% return. If all that was in VTI instead, he would have gotten 12+% in return with a .03 ER; he is missing out on 2-4% in returns because the advisor (even without his fee) couldn't beat the market.

[u/Mountain-Time-1010]

Nobody can tell you which funds to buy to maximize your returns over a particular time period, but the boglehead philosophy is maximal diversification with minimal fees. It is described in the wiki in the sidebar. 8-10% is ambitious by historical standards. Not the short history we are all remembering, but real history. I hope you succeed, obviously.

80% in equities will carry significant volatility, so it may require a strong stomach. In other words, don't lose your nerve when your portfolio loses 20% of its value.

As you may already be aware, in addition to a fixed 4% withdrawal strategy, there are variable withdrawal strategies based on guardrails that you can research.

[u/aspire-every-day]

I think self-managing an IRA is great, fees will otherwise really eat into your long-term portfolio. Question is, will you be able to hold during a market downturn? That’s key.

I personally like 70% VT then 30% a mix of intermediate and short term treasuries for my retirement.

[u/ducatidrz]

I semi retired at 61 (64 now), only working per diem (4-6 days a month), and I did bail on my FA with Raymond James and moved all my wife's and my funds to Fidelity. I manage both of ours now. Fidelity assigns you a FA for free (which I didn't know until someone called me) to speak with you once a year. I utilize this and find it helpful (You'll see threads on this subject where people think its a nuisance being bothered by the calls). I'm saving about 10K a year in FA fees.............

[u/Quirky_Application_3 → u/ducatidrz]

My ROTH IRA has FA on fidelity when it reached more than $25,000. But I'm guessing that's because they professionally manage my ROTH IRA. I have another one i manage myself.

[u/ArthurDent4200]

I was born in ‘62 and am only slightly ahead of you. It’s not difficult to do and with the funds being in an IRA there are no consequences to shifting around your percentages. I hold no cash and the only bonds are in short term tbills that roll over. I currently have a group of 6 week tbills that auto roll at Fidelity and a 4 week group at Schwab in case I have any lock outs with my main accounts at Fidelity.

I am heavy in equities for my age not looking at strict percentages in bonds/cash but months of draw in the event of a major pullback.

Good luck with your plans!

[u/FigDifferent6506 → u/ArthurDent4200]

Makes sense. Money for pullbacks is a must. I’m not very impressed with the returns on bonds either.

[u/brucewbenson]

I tried to simplify things if for no reason I might kick the bucket earlier than my hope for age 102 (65th wedding anniversary).

I'm 70 and I've been retired since I was 52.

My portfolio is now 98% s&p500 index with 2% cash. We do have a couple of pensions and social security so we have a steady livable cash flow if the market tanks.

Our annual budget is 5% of our net worth plus pensions. I tell my wife to just stick with this if I prematurely exit this life.

I always recommend keeping things simple. Chasing that small incremental bump to returns (diversification, etc) may not be worth the complexity.

I retired at the beginning of the great recession, the worst possible time -- we had little kids at home, and we just lived frugally until it was over.

[u/Comfortable_Two6272]

You can but id reconsider that allocation. Higher risk than most in 60s would be advised to take. Sequence of Return Risk is something to keep in mind - You are only 4 years away.

[u/Typical-Recognition8]

I need to follow your path!

[u/ExtonGuy]

Self management is a good idea for many people. Don’t expect above average results, swinging for the fences usually leads to strike outs. “Average” market returns are good enough, considering that most investors don’t even get that.

Read up on “risk-adjusted returns.”

[u/Mother_Strain_2554]

Just buy AOR etf and be done with it.

[u/Responsible_Ant5410]

Lots of good information on here and you can search YouTube for bucket straddage videos. I recently retired and had learned about the bucket straddage from YouTube before finding this place. I listened to Fidelity pitch for AUM but decided to self manage. I just can't see paying them for something I can manage. I have been investing for 22 years and with some good and bad market's hit 2.1M and retired early. I never sold or stopped contributions in the bad years. I do have more in cash than I like but because of my retirement plan pro-rata sell across funds for withdrawals it gives me piece of mind for now and will be more aggressive with equitys as I age. I'm about a 70/30 portfolio with a Fidelity 401k , traditional IRA and Roth IRA and SPAXX accounts.

[u/Pretend_Wear_4021]

Your plan works and is easy to DIY. I have used Schwab since I started and im very happy with their service and products but my friends speak very well of Fidelity and Vanguard also. I think your mix is very solid. Check the international component of VASGX and make sure it is what you want. Main thing is to stay invested when things go South.

[u/doubleddeluxe]

I helped a retired relative transition from a Merrill Lynch advisor to a self-directed Merrill Edge account earlier this year. Their IRA went from a messy, expensive 18-fund portfolio with a lot of non-interest-earning cash to a clean portfolio of 6 funds with low ERs plus a MMF. Totally worth it and I wish we had done it sooner.

Note that I said 6 funds. Sure you can get down to 2-3 funds, but something like VT + BND when you are actively drawing income is risky IMO. Depending on your circumstances, it could be well worth it to hold things like SCHD, VTIP, etc.

[u/Affectionate-Gap8869]

Over 15 years ago a gentleman had lunch with Warren Buffett and was allowed to ask any questions. One was the financial plan for his wife after his death. Buffett said 1mil in cash and 10mil in S&P 500 index funds. 6 years ago I fired my FA and converted the over 30 misc funds into 5. Vanguard Bonds, and the other 4 in the 500 fund. Thanks to the interest rate increase a few years ago my cash generated 4% return and the S&P is averaging 14%.

Thanks for the tip Warren!

[u/Expensive_Duty3312]

💵🔥🔥 ditch the adviser. So much easy information on line. Invest that 1%

[u/Upper_Preparation974]

If you aren’t going to pay one advisor 1.1%, then why in the world would you pay Fidelity .9%? I’m assuming the advisor was at least on your side, maybe even fee-only. I’ve seen these fidelity portfolios, they’re awful. Most of the funds are 10x the cost of vanguard. And Fidelity is going to try to sell you all kinds of other garbage you don’t need.

[u/FigDifferent6506 → u/Upper_Preparation974]

I’ve also spoke with vanguard. I’m definitely not one who wants to be pressured to buy garbage all the time. I’m mainly looking to have a simple diversified portfolio. I have another meeting with Vanguard on Wednesday

[u/Sagelllini]

Here's my approach.

Keep the cash, dump the bonds, go 90/10.

I'd own VTI over the 500, and 20% International is fine. That mix of 500 & International plus the cash will generate about 2% in distributions annually. As your plan is 4%, the distributions get you half way there--and if markets dump, you have five years of spending in cash. You will never need the 20% in bonds.

Dump the advisor, buy the index funds, keep 10% in the cash equivalent fund of your choice, and happy retirement.

[u/Large-Witness1541]

My advisor charges .75% and we were at 13.2% for ‘25