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Follower ○○

What to do with $600,000 cash

Hi

-I sold my rental for $722,000 free and clear, after paying capital gains, I should have $600,000 leftover.

-I am 70 years old and healthy, I collect $1761 per month from Social Security, I need a minimum of additional $1500 -ideally $2000-  My goal is a monthly income of $3000.

$600,000 is my nest egg.

- I am debts free-

How should I invest $600,000 for a 3-4% withdrawal rate?

Thanks

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32 Replies
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Frequent Contributor

Re: What to do with $600,000 cash

My guess is you will be setting this money up in a taxable brokerage account?

You could begin investing in high yield stocks. It would be hard to get much yield from bond funds and keep a handle on risk.

My way for doing it would be to invest for growth, investing in equity. Given your immediate time frame, I would look to safe short term investments for a portion of your money. I would assume you would wish to keep some part of this highly liquid. Given this, some cash into online savings accounts for next few years.

I would suggest Vanguard and looking into funds like VWINX along with something like an S&P 500 fund, VFIAX for starts.

I cannot say you would yield 4%, but if you did, it would be partly from principle.

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Frequent Contributor

Re: What to do with $600,000 cash

             All PIMIX.

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Follower ○○○

Re: What to do with $600,000 cash

Is that not a $1 million minimum requirement to start?

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Frequent Contributor

Re: What to do with $600,000 cash

I hope that you figure out the tax consequences already. 

Since this is the base for your living, conservative investment (i.e., preserving principal with steady and regular income) is the way to go.

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Participant ○○○

Re: What to do with $600,000 cash

I consider VTINX (Target Retirement Income) to be one of the cheapest, most diversified and least risky ways to achieve your goal. 

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Frequent Contributor

Re: What to do with $600,000 cash


@Seeker101 wrote:

Hi

-I sold my rental for $722,000 free and clear, after paying capital gains, I should have $600,000 leftover.

-I am 70 years old and healthy, I collect $1761 per month from Social Security, I need a minimum of additional $1500 -ideally $2000-  My goal is a monthly income of $3000.

$600,000 is my nest egg.

- I am debts free-

How should I invest $600,000 for a 3-4% withdrawal rate?

Thanks


Not enough information.  What is your volatility tolerance? what is your max loss from any last top? Do you care to leave something for heirs? Do you want to max returns? 

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Participant ○

Re: What to do with $600,000 cash

No need to worry or look any further.  I will send you a postage paid self addressed envelope.  Just mail your cash and checks to me.  No more worries.

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Explorer ○

Re: What to do with $600,000 cash

Open an account at Vanguard.  Put $500k in PIMIX, $90K in VWIAX, or VCOBX if risk adverse, and $10K in VUBFX for seed money, and direct all dividends to that fund for spending money.  Should give you your desired income.  

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Follower ○○○

Re: What to do with $600,000 cash

PIMIX requires an investment of one million dollars.  That is not a reasonable choice for this individual.

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Follower ○○○

Re: What to do with $600,000 cash

Agree.  VTINX is a reasonable choice, and it distributes dividend income quarterly.

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Follower ○○○

Re: What to do with $600,000 cash

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Frequent Contributor

Re: What to do with $600,000 cash


@DevilDog wrote:

PIMIX requires an investment of one million dollars.  That is not a reasonable choice for this individual.


     Well If that is what you believe. Ponax is the more expensive alternative. 5%+ I know there is less expensive comparisons but first of all you may be giving up yield and this I believe is the largest bond fund in the world managed by the top bond house so you have to pay for that.

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Frequent Contributor

Re: What to do with $600,000 cash


@steelpony10 wrote:

@DevilDog wrote:

PIMIX requires an investment of one million dollars.  That is not a reasonable choice for this individual.


     Well If that is what you believe. Ponax is the more expensive alternative. 5%+ I know there is less expensive comparisons but first of all you may be  giving up yield and this I believe is the largest bond fund in the world managed by the top bond house so you have to pay for that.


I buy PIMIX at Vanguard for $ 25,000.

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Follower ○○○

Re: What to do with $600,000 cash

I still would not buy PIMIX.  It has an excessive expense ratio of 1.05%, and the adjusted expense ratio is 0.50%.  You can purchase a Vanguard fund for far less, and it is still the better option.  The PIMCO funds don't even come close to Vanguard when it comes to price.  When in retirement, you should buy the investment with the lower costs because you want to keep as much of your money as you can.  You don't want to be paying your fund company any more money than is reasonable or necessary. Stop buying these mutual funds or ETFs with high expense ratios!

https://www.investopedia.com/articles/personal-finance/092613/pay-attention-your-funds-expense-ratio...

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Frequent Contributor

Re: What to do with $600,000 cash


@DevilDog wrote:

I still would not buy PIMIX.  It has an excessive expense ratio of 1.05%, and the adjusted expense ratio is 0.50%.  You can purchase a Vanguard fund for far less, and it is still the better option.  The PIMCO funds don't even come close to Vanguard when it comes to price.  When in retirement, you should buy the investment with the lower costs because you want to keep as much of your money as you can.  You don't want to be paying your fund company any more money than is reasonable or necessary. Stop buying these mutual funds or ETFs with high expense ratios!

https://www.investopedia.com/articles/personal-finance/092613/pay-attention-your-funds-expense-ratio...


        Well you should take into account the yield difference, the actual assets, quality of management and when it’s paid out. I think the huge assets under management may mean many are looking for PIMCO’s expertise and are willing to pay for it as in my case. Like FD alluded to not really much information though in the OP.

         In my opinion the big divide on these forums is whether you spend down in retirement where costs and volatility should matter or income invest where for me anyway I use those traits to my advantage. You sound like a spend down investor. Apples to oranges as far as anonymous opinions go.

 

 

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Participant ○

Re: What to do with $600,000 cash

You need some stocks.   VWENX is a good place to start.

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Explorer ○

Re: What to do with $600,000 cash

We're pretty much in your same situation and I've already advised my wife to go 50/50 between  VWIAX & PIMIX when I'm gone. We have that ratio now with some added spices but she likes simplicity and this would generate more than enough money to meet her "wants".

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Contributor ○○○

Re: What to do with $600,000 cash

Not at Schwab or other brokerages. $100k there.


@ultrablue wrote:

Is that not a $1 million minimum requirement to start?


 

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Contributor ○○○

Re: What to do with $600,000 cash

Do you have any investing experience at all? If not I would not venture into individual stocks until you have experience. Otherwise hire an advisor to set up a portfolio for you. Schwab or wherever you set up your taxable account can help.


@Seeker101 wrote:

Hi

-I sold my rental for $722,000 free and clear, after paying capital gains, I should have $600,000 leftover.

-I am 70 years old and healthy, I collect $1761 per month from Social Security, I need a minimum of additional $1500 -ideally $2000-  My goal is a monthly income of $3000.

$600,000 is my nest egg.

- I am debts free-

How should I invest $600,000 for a 3-4% withdrawal rate?

Thanks


 

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