, you want an AA of 68% stocks, 32% bonds, with 30% of stocks in international. That breaks down to 48% US stocks, 20% international stocks, and 32% bonds. Here is a possible retirement portfolio:Taxable at Vanguard -- 8%
) Vanguard Total International Stock Index Fund Admiral Shares (0.18%)401k -- 74%
) MassMutual S&P 500 Index Fund (0.50%)
) Northern Small Cap Index Fund (0.85%)
) MassMutual Select PIMCO Total Return Fund (0.85%)Roth IRA at Vanguard -- 18%
) Vanguard Extended Market Index Fund Admiral Shares (0.14%) <-- Roughly 80% large caps (500 Index) plus 20% mid/small caps (Small Cap Index & Extended Market) makes up the total US stock market.
) Vanguard Total International Stock Index Fund Admiral Shares (0.18%)
-- This has TISM in taxable to take advantage of the
Foreign tax credit
and at Vanguard because it's a much better (and cheaper) international fund than your 401k options.
-- The problem with "cruise control" is that it doesn't know what you hold outside the 401k. It would be just as easy for you to rebalance all three accounts manually once or twice a year.
-- You wrote:
New annual Contributions
$20000 his 401k of which 4K is employer match
$5500 his IRA/Roth IRA
That means you are only contributing $16K to the 401k plus $1.7K to taxable. The 401k limit for 2013 is $17.5K. Unless the taxable amount is for your emergency fund or a short-term needs fund (new car, fancy vacation, house down-payment, etc.) it is better off in your tax-sheltered 401k (even with its high expense ratios).
Something to think about.