Originally Posted by
hopp
You are right on when you went to cash, as I did, except for my brokerage account which has been in mostly petro LP’s. (it is a taxable brokerage account).
The veba is not restricted from investing in the Vanguard Money Market fund, unless things have changed, from 5 years ago. The VEBA does not need to be actively managed (as the term is generally applied to investments), just put in the right baskets.
What younger (presumably) pilots like mehh don’t get about the VEBA account, is that once you retire, it is no longer an investment account, it is a savings account that is meant to be drawn from like any other personal savings account- only for medical expenses exclusively. That requires an entirely different money management philosophy. The money needs to be there, to be drawn from every month- much like a checking account. Interest or dividends are nice in a checking account if you can get it. The most important thing is that the money is still there when you need it.
I don’t believe our investment committee gets it.
Imagine if you looked at your checking account balance at the beginning of the month and it was down $5000 dollars, that you didn’t write any checks for- just investment losses.
I'm sure they can invest in the money market fund if only to have a settlement account for trades but usually there is a rather low restriction on cash (on the order of 5%).
I understand your point, if a guaranteed return is the goal perhaps there should be an option to convert their funds into an annuity after retirement for those who want minimal risk.
On a similar subject I find the investment mix in target date funds absurd. They start with over 90% stocks in some cases and are barely at 60 (bonds)/40 by retirement age. It's only 20 years into retirement that they achieve 80/20.
Ignoring the disaster that owning bonds in a rising rate environment is, even in normal times I find the level of risk in target date funds to be scary. As always the question to ask money managers is "Where are the customers' yachts?"