ren20 wrote:I read and read again the boglehead guide. but I am actually doing this, I am still feeling clueless.
It'll come with time. I read a few books including The Boglehead's Guide
and it simply didn't click until I found this website and saw posters in action.
ren20 wrote:Are you suggesting I should keep all in target date retirement fund?
You are in the enviable situation of being able to use a single target fund in each account. As long as you select target funds that work with your willingness, need and tolerance for risk, you can forget about them. Target funds do the tough work for you, so your portfolio could look as simple as...401k
LifePath Index Fund 0.12%Vanguard Roth
Target Retirement Fund 0.18%Vanguard Rollover IRA
Target Retirement Fund 0.18%Taxable:
Cash - 39% (down payment) <--Separate goal. Not investible.
ren20 wrote:That's one of the area that's also confusing me. I have target date in my Roth, Then 3 funds in my rollover ira. Do I treat them as two separate accounts? I guess my question is, since I have 3 accounts for retirement fund. How should I look at them? and manage them?
It is usually easier to manage a portfolio of only target funds or only asset class funds, rather than a portfolio with asset classes funds mixed with target funds. You don't appear to be an exception. Besides, what would be the point of a Target Fund in one account (composed of Total Stock, Total International and Total Bond) while holding Total Stock, Total International and Total Bond individually in another account?
Even with the other great options in your 401k, you'd be hard-pressed to organize a portfolio of asset class funds with a lower weighted expense ratio than using all target funds, since 2/3 of investible assets are in your 401k and 2/3 or more of contributions land in that account as well. The LifePath Index
funds can be
unbeatably low cost.
If your 401k target funds weren't so good, I'd probably tell you to use the best options in the 401k and complete your portfolio elsewhere (treating all accounts as if it were one portfolio, instead of duplicating funds/assets in each account).
Now, I asked if you could do something. You haven't responded, so you might have missed it. I'll repeat the question and add a few more:1.
Could you provide a link to at least one fund data sheet for those Lifepath Index funds? (More than one is good, too. Doing so might reveal who your employer is, so don't if it that would make you uncomfortable.)2.
Who is your plan provider? Fidelity? Schwab? Other? Is it possible that the plan provider is JPMorgan and that's why you called the funds JPMorgan LifePath Index Funds? (I suppose BlackRock could have licensed them out to JPM for your plan.)3.
After you buy a house, you'll have a lot of after-tax money to invest. Can you find out if your 401k allows after-tax employee contributions as well as
the ability to regularly roll those amounts out of the plan (and, thus, into your Roth account) ? (Please read the link.)4.
Given your tax bracket and new increase in income, do you expect to phase out of Roth IRA eligibilty anytime in the future? (Having a Rollover IRA will affect your ability to make Backdoor Roth
contributions if you can't make them directly. It doesn't mean you should move it to the new 401k right now, but you want to be sure you can do so, in case you need to in the future.)5.
Please edit the new contributions portion of your inital post to include the dollar amount of your employer match with the dollar amount of your personal contribution (e.g. $17,500 + $x,xxx = annual 401k contribution).