Archive for Investing

Retirement Target

January 19, 2006 at 8:04 am by Terri · Filed under Investing, Retirement, Real Estate

Amazingly, Andrew and I have never actually put hard numbers to our retirement goal before last night — it’s always just been “save as much as we can.” He asked me what our goal should be and I thought 2 million. So we crunched the numbers.

We took our current savings [we’re leaving out home equity/mortgage for our calculations, but I’d estimate we’ve got about 100k equity in our house], our current rate of savings, estimated Social Security income [we estimate 0 dollars], and expected annual rate of return [we looked at 4, 5 and 6%]. This puts us at the 2 million mark around 19-24 years, depending on return.

We intentionally chose very conservative numbers because we’d rather be pleasantly surprised by market returns or Social Security than the alternative. This also assumes that we never up our yearly contribution, which I certainly hope/plan to do. On the other hand, it also doesn’t account for possible financial catastrophe such as long term job loss and, uh, our children’s college expenses. Heh. [That’s not entirely true. The plan is to invest/save any future bonuses, stock windfalls and raises, so that does help mitigate the college factor.]

Since Andrew is currently 35 and I am 32, I feel like we’re doing pretty good.

Comments

Bye, bye Schwab…

December 7, 2005 at 12:24 pm by Andrew · Filed under Banking, Investing

Well, we’ve liquidated all of our taxable accounts as one of the final steps to moving everything from Schwab to other investment houses. We’ve already transferred all our IRAs from Schwab to Vanguard, so once we move the taxable stuff we’re done w/ Schwab.

I was happy with Schwab for years. The service is excellent, and the web site is pretty darn good - especially compared to Fidelity circa 10 years ago when I migrated out of Fidelity and into Schwab. The problems started to creep in when Terri and I started to get more involved with our investements, and figure out what exactly we were looking for. What we primarily want are index funds with very low expenses, and pretty good returns without huge risk. But most importantly, we also don’t want to have to do much “active management” of our funds. Neither of us are really into “playing the market”, and I think we’d be happiest if we could put our retirement investments on “cruise control”, and feel confident that our investmenting is sound, without much more than maybe a quick monthly checkup.

The problem is that Schwab seems to be more geared to the “active traders” than the “set and forgetters”. Their selection of no-load index funds are pretty good, but aren’t the “best of breed” that can be found at Vanguard. They also don’t have any no-load “target retirement” funds: funds that balance themselves, and get progressively less risky as your retirement date approaches.

To that end, we’re moving our long-term investments to Vanguard, and our short-term/emergency funds to Emigrant Direct (4% and FDIC-insured - yippee!).

A word of caution if you leave Schwab: Schwab hit us with a $95 transfer fee for each account we rolled out of Schwab.

And we had 4 IRA accounts - ouch! They didn’t give us any warning - the fee just showed up on our statement. If we would’ve known then we could have done a few different things to reduce or completely negate these charges. This was, by far, the slimiest thing I’ve experienced with Schwab.

Comments (3)