I've been investing since starting employment after my PhD about five years ago, and have taken what I consider a pretty Bogleheadish approach from the start. I'm generally happy with where we are, but feel the need for some external approval, as well as desiring advice on our particular tax and near/mid-term savings situation.
At the moment we're overseas for my job, with another 1-1.5 years until we return to the US. My wife isn't working here, but will look for work again when we get back; if she earns roughly what she was earning before we left, then our total income should stay about the same as it is now (with all my overseas allowances/incentives) or go up somewhat.
Emergency fund: Yes
Tax Filing Status: Married filing jointly
Tax Rate: 28% federal, 5.75% state (but with foreign earned income exclusion, and no taxes in country of residence)
State of residence: VA
Age: 33 and 36
Desired asset allocation: 80% stocks / 20% bonds
Desired international allocation: 25% of stocks (but I can be talked upwards)
Size of total portfolio: low 6 figures
My 403(b) at Fidelity:
28.0% Total Stock Market Index (FSTVX) (0.06%)
10.9% Extended Stock Market Index (FSEVX) (0.07%)
11.3% International Stock Index (FSIVX) (0.12%)
2.9% Emerging Markets Index (FPMAX) (0.20%)
6.3% Total Bond Fund (FTBFX) (0.45%)
6.4% Inflation-Protected Bond Fund (FINPX) (0.45%)
My Roth IRA at Vanguard:
11.9% Total Stock Market Index (VTSAX) (0.06%)
2.9% Total Bond Market Index (VBMFX) (0.22%)
Her Roth IRA at Vanguard
15.7% Total Stock Market Index (VTSAX) (0.06%)
3.8% Total Bond Market Index (VBMFX) (0.22%)
New annual contributions:
$17.5k to my 403(b), plus $10k company match
$5500 to each Roth IRA via the back door
403(b): Darn near everything Fidelity offers
Roth IRAs: Usual Vanguard options
We also have a 529 for our 4-year-old with about $20k, and I make yearly contributions of $4k more to get the full annual Virginia tax deduction (5.75% of that $4k). When our second child is born this year I intend to do the same for her, and continue these contributions as long as we comfortably can but maxing out retirement space first. I consider the 529 allocation to be separate from retirement, but the underlying fund is the Vanguard LifeStrategy Growth Fund (about 80%/20% equity/fixed income).
Finally, we have about $90k in cash (actually mostly CDs and I bonds) that's earmarked for a house down payment in 2-4 years, in addition to non-emergency cash savings for other purposes (most notably for buying cars when we return).
1) Feeling for allocations? The small emerging markets amount seems a bit silly, but it's my tiny bit of somewhat more volatile betting, so I haven't talked myself out of it yet. I've remained two-fund in our IRAs because of the relatively low balances, though I could start adding international or extended market and keep the Admiral status for the current equity; I just haven't gotten around to it.
2) House down payment. I'm aiming to pay at least 20% down on a single family home in a very expensive housing market (northern Virginia), so having maxed out our tax-advantaged space I'm mentally earmarking extra savings to those purposes (as well as other new-home expenses) and so keeping it cash or cash-like. I suppose I'm interested in the Boglehead feeling as to whether the 20% savings is really necessary, or whether we would be better off in the long run starting up some taxable investing now.
3) Any ways to take advantage of our tax situation that I'm not seeing? I don't have to pay income tax to my country of residence. I can claim the full earned income exclusion and most of the housing exclusion for US taxes; for those who don't know how this works, I can exclude the tax on the first $100k+ of income (so all of the 10-15% rate income, plus some of the 25%). So our marginal rate is 33.75% (federal+state), but our effective rate is low (~10%); note though that the income exclusion applies only to wage income, not investment or interest income. I don't see that this situation should change anything about my investing strategy, but maybe I'm missing something.
Thanks in advance for any advice, as well as for all the posts I've been reading as a lurker over the years!