Tuesday, December 19, 2006

Insurance investment liquidation update & putting all investments into one mutual fund!

I've received the cash from liquidating my largest Variable policy - but no statement as to how it was calculated.

The other policies have sent statements showing how they will liquidate the policies, but not the checks.

I have not received anything from the whole life policy, but was told verbally the request was received and will take about a week longer to process.

By the end of the day I expect to have $73,500 after paying about $9-$10k in various surrender charges.

I'll place the money in Vanguard's 2025 target retirement fund (VTTVX) of the next six months until we're ready to move forward with our formal asset allocation plan. The target mutal fund isn't perfect for a taxable account, but it is balanced and close to our general asset allocation (stocks vs bonds).

All my retirement acccounts will also be in Vanguard's 2025 target retirement fund - this will have several pluses and minuses:
  • Consistent asset allocation throughout all accounts
  • Balanced funds eliminate the need for annual or quarterly rebalancing
  • Vanguard's target funds have dramatically lower expense ratios and no 12b1 fees
  • Consolidates most of my holdings with one provider -helping me obtain lower costs (Vanguard tiers prices by assets with their firm)
  • Simplifies reporting

Vanguard's 2025 target fund has a 0.2% expense ratio - one fifth (1/5) of similar funds at Schwab (SWERX)! Big difference.

Have a wonderful day,


1 comment:

StealthBucks said...

OK, I take it all back. Load up on the 2025. Variable annuities....Variable Universal Life........ eeeekkkkk!!!! You will be going from costs over 3% to exceeding 6% plus plus plus. Who sold all this stuff to you? Still I like all your allocation ideas just don't give up on low cost tactical stuff. It works and ads to performance. The 85% of all actives (as you quoted) is accurate it just doesn't take in to account select active tactical choices. Also, I wouldn't sweat the spreads on ETF's Even 2 cents on 10,000 shares of a $20.00 ETF is a whopping $200 on a $200,000 trade. This is the kind of stuff that'll drive you nuts. Getting out of a VUL will drive you happy. Good luck and you're doing great on goal attainment.

Just as a little dig the annuity probably sold at a 6% plus commission. ETF spreads are chump change. That same $200K in an annuity would of slapped a $12,0000 surrender on you and higher fees. You have great ideas just don't start over freakin on fees.,

Welcome to the game (or at least the middle innings of a pennant potential team).

Finally, I didn't say go radical on international just recognize diversification for what it is worth. I may also pare down my intnl exposure (tactical) in Feb of 07 or so. I did witness the last intnl slowdown although I am not a big emerging markets guy (can't take the heat). Europe looks well valued as do the Asian Tigers. No Botswana for me....