Morningstar's 2016 Portfolio Makeover Week

Will I have enough? Can I cut the clutter? Do I have enough bonds? Am I being too aggressive?

These were some of the most commonly asked questions that came through in response to our annual call for Portfolio Makeovers. And with the five makeovers we're featuring over the next week, we've tried to answer those questions and more.

Our annual Portfolio Makeover Week, which runs Dec. 12-16, is designed to help showcase real-life strategies for improving portfolios. Our makeovers feature the "before" portfolios of actual investors at various life stages and asset levels. Morningstar's director of personal finance, Christine Benz, will provide suggestions for improving those portfolios, touching on asset allocation, asset location, and in-retirement withdrawal rates, among other factors. (In case you missed them, you can also check out Christine's 2014 and 2015 makeovers.)

You can find a summary of each makeover below. Stay tuned this week to see the full makeovers and for more ideas on how you can make your own portfolio upgrades.

Note: Names and other potentially identifying details in the following makeovers have been changed to protect the investors' privacy. Makeovers are not intended to be individualized investment advice, but rather to illustrate possible portfolio strategies that investors should consider in the full context of their own financial situations.

Monday, Dec. 12 | Calvin and Nancy: Working Longer, but With a Backup Plan "I love what I do, and so I'm planning on teaching at least until age 70." So wrote 64-year-old Calvin, a college instructor in the Pacific Northwest. He and his 56-year-old wife, Nancy, are both educators; because they like their work, they plan to continue for at least five years. They know that working longer brings financial benefits, too--a plumper Social Security benefit for Calvin, a bigger pension paycheck for Nancy, reduced portfolio withdrawals, and additional contributions before retirement.

But Calvin wants another set of eyes on their plan, including the viability of their nest egg given his and Nancy's spending goals for retirement, as well as their portfolio allocations. Our Portfolio Makeover also does some worst case scenario planning, in case Calvin and Nancy aren't able--or don't want--to continue working for another five years. >> Click here to read more

Tuesday, Dec. 13 | Scott and Natalie: Multitaskers Balance College Funding With Retirement Savings Scott and Natalie's situation will resonate with many parents. At 48 and 44, respectively, they're stashing money away for college for their two daughters, one a college freshman and the other in seventh grade. But they're also thinking ahead to their own retirement years, and wondering whether they've successfully balanced college funding with retirement savings.

With roughly 15 years left in the workforce for Scott, he'd like an assessment of the portfolio that he and Natalie have been able to amass so far. Is it optimized for tax efficiency and future growth? Scott would also like guidance on capital allocation: If he and Natalie find themselves with extra cash to invest at the end of the year, what's the best receptacle for their dollars? >> Click here to read more

Wednesday, Dec. 14 | Bryn: Making Retirement Work on a Shoestring A 72-year-old single woman, Bryn's life is as full as it can be. She runs a small business, owns a waterfront home, and enjoys a life full of social and community activities. She's also a mother to two grown sons.

But Bryn's portfolio, at just over $260,000 today, doesn't allow a lot of room for error. She's living on her required minimum distributions, Social Security, and her business income. "My financial goal is to make my assets stretch for the rest of my life, so that I do not become a burden on society or my children," Bryn wrote. An avid investor, Bryn is seeking a portfolio mix that strikes a comfortable balance of growth without excessive volatility. >> Click here to read more

Thursday, Dec. 15 | Jon and Michael: Loving the Now While Being Realistic About Their Age Gap Jon and Michael have been together for 33 years and happily married for the last three. They have a comfortable nest egg of $1.9 million; their newly purchased home in a large metropolitan area is fully paid for. Jon, 69, is enjoying retirement, while 56-year-old Michael plans to continue working. "I've seen the miracle of compound interest in my investment life," Jon wrote. But he also notes that he has been too conservative with his investment choices in the past. He'd like to ensure that their portfolio is optimized to deliver the cash flows that he and Michael need, while also maintaining enough growth potential for the future. "Since there is a 13-year difference in our ages, it is important that there be enough assets left after I die to support my husband for another fifteen years or so," Jon wrote. >> Click here to read more

Friday, Dec. 16 | Steve and Melissa: Making Sense of a 'Mishmash' Melissa and Steve, ages 60 and 63, respectively, are typical of many workers of their generation and younger. Rather than staying put with a single employer, they've each had numerous jobs in the healthcare industry. "We have a mishmash of 401(k) and IRA accounts," Melissa wrote. And indeed, their portfolio features many different accounts with more than 20 distinct mutual fund holdings.

Melissa and Steve would like help streamlining their holdings. They're also thinking about retirement readiness, especially for Steve, even as they're contending with tuition payments for their two college-age children. Will their portfolio be sufficient to supply in-retirement expenses, and is it positioned correctly? "I feel like we are stock-heavy, but I don't see much reason to be in bonds right now," Melissa wrote. >> Click here to read more