I Fund Change Still on Hold and Finance Friday Articles
Here is an update about the Thrift Savings Plan I Fund change that is still on hold. The change would move the I Fund from holding only developed international stocks to holding developed and emerging markets (including China, which is/was the political issue):
One of the TSP board’s five seats is vacant and the other four are being held on holdover status. Biden will have discretion to make three nominations and the other two seats also are in the hands of Democrats since those nominees are chosen by the House speaker and Senate majority leader.
That board typically is not seen as partisan in nature although a partisan note was introduced last year when President Trump made three nominations just as the board was about to implement a long-planned expansion of the international stock I fund to cover more countries, including China. That plan was then put on indefinite hold and it remains suspended even though Trump’s nominees were not confirmed.
Throwback Thursday Classic Post – My Investment Portfolio
I write a lot about personal finance. If you are wondering what I’m doing for my own finances, here’s a detailed look at my own portfolio. I’m not going to give you dollar amounts, but percentages. If you want to know the dollar amounts, they can be expressed in one word. I have…enough:
At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds,“Yes, but I have something he will never have . . . enough.”
Retirement Assets
My retirement financial assets from largest to smallest include: (all percentages are rounded to the nearest whole percentage)
- 34% – My taxable mutual funds, which is where I put our retirement savings when I fill our retirement accounts. It is currently invested in:
- 55% – Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
- 44% – Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)
- 1% – Individual stocks that were gifted to me.
- 27% – My Thrift Savings Plan (TSP) – Currently invested in the Lifecycle 2030 fund.
- 15% – My wife’s TSP – Currently invested in the Lifecycle 2030 fund.
- 14% – My wife’s Roth IRA – Currently invested in the Vanguard Target Retirement 2030 fund.
- 7% – My Roth IRA – Currently invested in the Vanguard Target Retirement 2030 fund.
- 1% – My wife’s individual 401k – Currently invested in the Vanguard Target Retirement 2030 fund.
- 1% – My wife has a 401k that is invested in the Fidelity® 500 Index Fund (FXAIX).
529 Plans
We have two Nevada 529 plans, both of which are at Vanguard and are invested in the age-based investment options.
Liabilities
None. Aside from credit cards we pay off every month, we’re debt free.
Overall Retirement Asset Allocation
- Stocks – 76% (target 75%)
- Bonds – 24% (target 25%)
The Military Pension and Retirement Asset Allocation
Jonathan Clements is one of my favorite authors. As a prior financial columnist for the Wall Street Journal and current author of the Humble Dollar blog and money guide, he doles out common sense advice on a regular basis. One of his tenets of personal finance is to take a holistic approach to your financial life and include everything you’ve got and will receive when deciding on your asset allocation and risk tolerance.
In 2017, he published a blog post discussing how he values future income, Social Security, and pensions. If you stick around the military long enough to get an inflation-adjusted pension, his approach and the security of the pension would allow you to take on a lot of additional risk, more than many traditionalists would recommend. He and I discussed this very issue in the comments section, so do me a favor and read the post.
My comments to him were:
I am a huge fan of your writing AND the beneficiary of an inflation adjusted pensions if I stay in for 20 years, which is quite valuable. You advocate for including the value of social security (SS) and pensions in your overall asset allocation, but the other side of the camp would argue you should not because you can’t rebalance with SS or pensions. The present value of SS and an inflation adjusted military pension can be quite large, and with your approach would likely represent all of a person’s “bond holdings” unless they were very wealthy or extremely conservative.
For example, if a retired military member wanted to generate $75K in annual income, and was going to get $15K/year from SS and $35K/year from his/her military pension, that would leave $25K/year they need to generate income from. Using the 4% rule, they would need about $625K in investments.
If they wanted a 50/50 stock/bond portfolio, using your approach they might own all $625K in stocks. They’d have nothing to rebalance with when the stock market soared.
Using the argument of those who don’t agree with your way of allocating assets and don’t include SS/pensions as bond-like, they’d own $312.5K of bonds and $312.5K of stocks. They could easily rebalance.
Does the case of someone with a very large, inflation adjusted military pension change they way you’d approach retirement asset allocation?
His reply:
What you describe falls firmly into the category of “nice problems to have.” If I had $50k guaranteed every year and needed another $25k from investments, I’d set aside $125k of my $625k portfolio in cash and short-term bonds, to cover the next five years of required portfolio withdrawals. And then I’d probably put much or all of the remaining $500k in stocks.
ASH(HA)’s Farewell Message
MHS Team:
As I wind down my last day with the Department, I want to thank everyone throughout the Military Health System (MHS) for the distinct privilege of working with you these past three and a half years. I am grateful for all you do day-in and day-out to support the MHS and advance its mission to ensure the U.S. Military deploys a “Ready Medical Force” and a “Medically Ready Force”. Each day I have watched so many do whatever it takes to complete that mission and to do so with passion, honor, integrity, and an extraordinary work ethic.
Together, we have accomplished incredible things while experiencing the most transformational changes the system has seen in over 30 years. We launched the deployment of a truly enterprise-wide electronic health record. We began execution of the plan to completely overhaul the manner by which DoD operates and manages its hospitals, outpatient facilities, and dental clinics. And, during these past 11 months, we have effectively and quickly marshalled the enormous assets of the MHS to support the Department’s and the Nation’s efforts to combat the COVID-19 pandemic.
I am deeply proud of all that you have accomplished and am truly honored to have been given the opportunity to be part of your MHS team. My time with the Department and with the MHS has been the most fulfilling of my professional life, and I am grateful to each of you for that. Thank you for your service to the MHS, to the Department, and to our Nation, and thank you for the privilege of allowing me to serve with you. I wish you all the best for 2021 and beyond!
Always,
Tom
Tom McCaffery
Assistant Secretary of Defense for Health Affairs
1200 Defense Pentagon
Suite 3E1070
Washington, D.C. 20301
Navy American College of Physicians Governor Position
CDR Mark Tschanz is turning over as ACP Governor in 2023, so there is an opening for a new Governor starting Spring of 2022. Any Internists interested should direct questions to the incumbent, CDR Tschanz (contact is in the global).
Applications are due by COB 5 FEB 2021 and should include Letter of Intent (LOI), CV, and military bio.
Female Physician Leadership Course Nominations – LCDR(s) to CDR
Who: Female Medical Corps Officers from O4 select to Junior O5
What: Interactive female leadership development
When: 3-6 MAY 2021 – note that the deadline for application submission is 31 JAN 2021
Where: Virtual, but must have command no-cost/permissive TAD orders
Why: Deliberate development of female leaders
How: Submit application package to both CDR Wendy Arnold and CAPT Charmagne Beckett (contacts are in the global)
Here is a document that provides more details:
SG Message – Toward a More Perfect Union
Esteemed Colleagues:
On the day before he died, in the speech given in support of striking sanitation workers in Tennessee, Dr. Martin Luther King Jr retold the good Samaritan story. He said that those who refused to stop for the wounded man on the road asked, “If I stop to help this man, what will happen to me?” – but the good Samaritan instead asked, “If I do not stop to help this man, what will happen to him?”
Service is the action of helping or doing work for someone. There is no greater honor and no greater reward than service. And today, there is no greater need.
As your Surgeon General, I am honored to serve alongside our selfless Sailors and civilians who are dedicated to be part of something greater than oneself. We serve to protect and defend America and the country’s national interest.
Whenever a Sailor or Marine goes, Navy Medicine is there, ready and engaged. We are there rendering medical aid in austere locations, caring for our shipmates and their families at military hospitals, developing vaccines to protect our forces against disease, and providing humanitarian assistance around the world. Service is the very bloodline of our One Navy Medicine family.
Today, four of our Rapid Rural Response Teams (RRRTs) – comprised of 24 nurses and respiratory technicians – are providing essential medical care to COVID-19 patients from the Navajo Nation in Arizona and New Mexico. Our scientists are conducting pioneering research on viral transmission, and at military treatment facilities and alongside Navy piers, we are providing vaccines against a deadly disease to protect the Force and our fellow Americans. These are just a few examples of the thousands of good actions Navy Medicine demonstrates every day.
Dr. King devoted his life to serving others and advancing equality, social justice, and opportunity for all. He challenged Americans to participate in the never-ending work of building a more perfect union. We are living through difficult times – with a global pandemic, social turmoil, economic hardships, and political strife all straining our country. Recognizing that our Nation has yet to reach its full promise is not an admission of defeat, but a call to action. As our Joint Chiefs reminded us this week, American citizens trust us to protect and defend our nation in accordance with the Constitution and I thank you for embracing this responsibility.
I challenge each of us to continue to foster an environment of dignity and respect for everyone. In our Navy, we have individuals from many different cultures, ethnicities, and histories. We must recognize this advantage and include the broadest possible spectrum of people and perspectives. Generating success as a team means going beyond merely understanding the unique perspectives of different people and cultures – understanding is too passive. Achieving top performance is enhanced when we tap into the energy and capability of an actively inclusive team.
As we mark Dr. King’s 92nd birthday this holiday weekend, let us each remember that we have much more to gain from peaceful dialogue, orderly discourse, and civility towards each other. Navy Medicine remains committed to the principles of mutual respect and understanding that Dr. King espoused. Now, perhaps more than ever, they are the cornerstones of the Navy’s Culture of Excellence and an important contribution to our nation’s ongoing effort to create a more perfect union.
With my deepest gratitude, SG
Bruce L. Gillingham, MD, CPE, AOA
RADM, MC, USN
Surgeon General, U.S. Navy
Chief, Bureau of Medicine and Surgery
Joel Schofer's Career Planning Blog 