Streamline, Simplify, Document

• Laura Ricci• Milwaukee Bogleheads• November 1, 2016

Student Level Expertise

Ages: 40’s to retirement

My steps to get ready for retirement:

Stages of Retirement1. Early, Pre-retirement, ages 50 – 65

1. Figuring out when you can retire2. Organizing the portfolio to begin draw downs

2. Starting retirement, ages 60 – 701. Social Security strategy2. Are ROTH conversions needed?3. Begin estate planning

3. Mid term retirement, ages 65 – 85+1. How will you annuitize your portfolio?2. Simplify financial management in all aspects

4. Late retirement, ages 75 – 100+1. Just spending, not managing money

What I can offer• I’m closing our first stage of Retirement, and in

the midst of the second stage, but being an over-achiever, I’m starting to think about the third stage.

• Our actions fit somewhat with the stages, but the order we tackle tasks vary.

• Take what you can use, and don’t assume any of this is the absolute best way to do anything. “We don’t know nuthin” as John Bogle would say.

Financial • Convert to Boglehead Portfolio

o almost finished after 5 years of liquidating and consolidating• Simplify to 2 investment firms

o 10% invested with another firm in case cyber attack makes one account unavailable while an intrusion is repaired.

• Consolidate to one banko I had three banks when we started (two businesses and personal)

• Consolidate Credit Cardso We had 6, so I picked the two best and put the others away. (Travel

Hacking ruined this though, so now I have 20 credit cards)• Write Down and update my Investment Policy

Statemento Leaving bread crumbs so others know why I’ve done what I’ve done

Financial Cont.• Finish ROTH conversions

o We will maximize tax planning per I-ORP and Fidelity RIP. This began almost 5 years ago and I plan to finish within 3 years from now.

• Social Security Strategy is set. o One person takes at age 62, the other takes at 70

• Estate Planning is pretty well set. o No trust needed. We’ll use the beneficiaries for each account to direct funds.

Charitable Fund has been opened to receive some estate upon death.• Streamlining bills

o Hoping to travel enough that we manage all accounts online. Fewer accounts is the goal.

• Starting to think about streamlining after age 70o I like Bob’s idea of all-in-one accounts. I don’t plan on annuities for us

because they are too expensive.

Legal• Update wills• We aren’t using Trusts, so not much else to do

here.

• Scan legal documents and put in the cloudo Wills and letter of instructionso Passports ✔o Driver’s Licenses ✔o Birth Certificates ✔o Marriage License

Housing• We downsized our home

o 3400 Sq.Ft. to 2100 sq. ft.o and then 2100 to 1560 sq. ft.

• Jettison flotsam and jetsam every step along the way:o Clean out duplicates by using up, donating or discarding – I found 5 bottles

of aspirin in various spots. We’d never use these up, so I gave most of it away and am down to 1 bottle of aspirin.

o Quit buying massive quantities – Took awhile for us to admit we aren’t going to be feeding a houseful of teenagers again!

o Use it or lose it:• Clothing – not used w/in a year, donate to charity before the moths or

styles make it worthless.• Kitchen – slowly moving out items I don’t use so someone else can use

them.o Simplify: Sold my worm farm this week, gave away my pressure cooker.

Transportation• Downsized from two+ to one car.

o I garaged my car over the winter and tried out other transportation:• Zip Car – hourly rental cars• Uber and Lyft – P2P taxi service• Bus – some places the bus is the fastest and easiest way to get

there.o In Spring, I sold my car. o Cost of owning a second car was $6500/year. Cost of using alternatives

is $3500/year. Nice!

Books• We had 3 floor to ceiling bookcases.

o If the book is available as an ebook, and I still want it, I sell the book and buy the ebook version.

o I keep out of print and books with inscriptions from author friends.o Sell the rest on Amazon

• We are down to 2 bookcases• The Goal is to get down to 1 bookcase, reduce

clutter, save money.

Newspapers and Subscriptions

• Two years ago: 6+ magazines and 3 newspapers• Now: 1 magazine, 2 newspapers, and 7 electronic

subscriptions.• Next year: 1 newspaper, and all magazines and

other newspapers on electronic subscriptions.• Goal is to reduce paper waste and clutter, save

money. As the resolution on computer screens improves, no need for paper subscriptions.

What are you doing?

• What are you doing that I haven’t thought of yet?

Resources• Bogleheads forum: Lots of discussion and

instruction for financial streamlining and retirement planning.o http://www.bogleheads.org

• Can I Retire Yet?o http://www.CanIRetireYet.com

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Milwaukee Bogleheads®

• A DIY investment group, followers of John Bogle's Index investing strategies, the Milwaukee local chapter of Bogleheads.

• This presentation was made November 1, 2016 by Laura Ricci of our chapter.

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Disclaimer

• All examples are for illustration purposes only and are not investment recommendations.

• The views expressed in the presentation, are those of the presenter, commenters, guests and participants and may not reflect the views of the Bogleheads organization.

• Use your discretion in using examples presented here for your own investment purposes.