When Jack and Catherine e-mailed me in 2009, they were seeking direction on how to invest during their impending retirement. Both were in the process of stepping back from demanding careers—Jack as an executive at a large pharmaceutical firm and Catherine as a hospital administrator. Although they had amassed more than enough money to retire—their combined portfolio totaled more than $2.5 million—their portfolio was, in Jack's words, "a mess."
Jack, who had been in charge of the couple's investments for most of their lives, used the "all-you-can-eat buffet" approach to portfolio management, meaning that their investment accounts consisted of a little bit of this and a little bit of that. He had sought the advice of advisors for portions of their portfolio and used the DIY method for other accounts. In all, this couple had more than 80 separate holdings, both individual stocks and bonds as well as traditional mutual funds and a few exchange-traded funds thrown in for good measure.
And because both partners had logged busy careers with multiple employers, the couple's portfolio was a crazy quilt of multiple brokerage accounts, IRAs (both traditional and Roth), and company retirement plans.
Their question wasn't whether they could retire—they clearly could. Instead, they were wondering how to retire. Before they said farewell to the working world, they had to position their portfolio for withdrawals during retirement, determining ...