Help With Portfolio....

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Topic Author
Woody999
Posts: 151
Joined: Sun Sep 16, 2012 8:37 pm

Help With Portfolio....

Post by Woody999 »

Combined Income ~$250K/yr

Debt: We have a $450k house and owe $320k. We are in year 2 of a 15 year mortgage at 2.875%. We have a combined $70k in student loans ($20k at 3.125% and $50k at 4.25%). We have been in forbearance for 3 years because we think it may not make sense to pay it off. We currently only pay the monthly interest. If we lose our job the payments are deferred. We also have a condo at the beach worth about $95k that is paid for. We have no other debt.

Tax Filing Status: Married Filing Jointly

Tax Rate: 28% fed and 7% state on taxable income

State of Residence: SC

Age: I’m 37 and my wife is 31

Desired Asset allocation: 45% US Stocks 25% Bonds and Emergency Funds
Desired International allocation: 30%


Current retirement assets

Emergency funds: His Roth IRA $5,400 and her Roth IRA $5,400 both are 100% VTI

HSA: ~3k in cash

His ESOP ~$100k in his company stock (I can't move this and I can't withdraw until I'm 62. I don't count on this at all for retirement since it could go to $0 between now and 62)

His 401k ~$125k
36% BlackRock Equity Index Fund (0.033)
11% Spartan Extended Market Index Fund Adv Class (FSEVX) (Short term trading 90 days 0.75%)
53% BlackRock MSCI ACWI ex-US Index Fund (0.15)
Match = $1 for $1 for the first 5%

Her 401k ~$80k
34% Spartan Total Market Index Fund - Institutional Class (FSKTX) (0.07 and Man fee 0.7)
66% Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) (0.07 and Man fee 0.04)
Match = $.5 for $1 for the first 6%


Contributions

Current annual Contributions
$24,850 his 401k (includes emp match)
$20,200 her 401k (includes emp match)

Available funds

Funds available in his traditional 401(k) (Roth 401k is available but not used)
Winslow Capital Large Cap Growth (0.536)
CRM Mid Cap Value Instl CL (CRIMX) (0.81 and Man fee 0.69)
Spartan Extended Market Index Fund - Fidelity Advantage Class (FSEVX) (0.07 and man fee 0.06)
BlackRock MSCI ACWI ex-US Index Fund (0.15)
T. Rowe Price Large-Cap Equity Income Strategy (0.4)
BlackRock Equity Index Fund (0.033)
ING Global Real Estate CL I (IGILX) (0.99 and Man fee 0.71)
Arrowstreet International Equity Strategy - EAFE (0.69)
T. Rowe Price Small Cap Value SHS (PRSVX) (0.97 and Man fee 0.65)
Fort Washington Investment Advisors Small Cap Growth Equity (0.62)
Managers TimesSquare Md Cp Gro Inst CL (TMDIX) (1.08 and Man fee 1.0)
T. Rowe Price Institutional Emerging Markets Equity Fund (IEMFX) (1.1 and Man fee 1.1)
Company Income Fund (0.32)
PIMCO Total Return Inst CL (PTTRX) (0.46 and Man fee 0.46)
WTC Treasury Inflation Protected Securities (TIPS) Portfolio (0.175)
BlackRock US Debt Index Fund (0.16)
He also has a Brokeragelink Option
Didn't list the Retirement Age based funds


Index Funds available in her traditional 401(k) (Roth 401k is NOT available in her plan)
Fidelity Contrafund (FCNTX) (0.81 and 0.55 Man fee)
Harbor Cap Appreciation Instl CL (HACAX) (0.68 and Man fee 0.6)
Neuberger Berman Large Cap Value Instl (NBPIX) (0.69 and Man Fee 0.62)
Spartan Total Market Index Fund - Institutional Class (FSKTX) (0.07 and Man fee 0.7)
T. Rowe Price Equity Income SHS (FRPDX) (0.68 and Man fee 0.54)
Neuberger Berman Genesis Fund Institutional Class (NBGIX) (0.89 and Man Fee 0.81)
Principal MidCap Blend Fund Institutional Class (NCBIX) (0.65 and Man fee 0.63)
Morgan Stanley Institutional Small Company Growth Portfolio Class I (MSSGX) (1.1 and Man fee 0.89)
Northern Small Cap Value (NOSGX) (1.38 and Man fee 0.85)
Fidelity Diversified International Fund - Class K (FDIKX) (0.73 and Man fee 0.72)
Vanguard Total International Stock Index Fund Signal Shares (VTSGX) (0.18 and Man fee 0.13)
Fidelity Balanced Fund - Class K (FBAKX) (0.48 and Man fee 0.41)
Fidelity Convertible Securities Fund (SCVFX) (0.84 and Man fee 0.61)
Managed Income Portfolio II Class 2 (0.37 and Man fee 0.25)
PIMCO Total Return Inst CL (PTTRX) (0.46 and Man fee 0.46)
Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) (0.07 and Man fee 0.04)
DFA Inflation-Protected Securities Portfolio Institutional Class (DIPSX) (0.13 and Man fee 0.1)
Didn't list the Retirement Age based funds


1. What 401K and IRA adjustments do you recommend?

2. Any other recomendations?

Thanks for your help!!!
User avatar
linuxuser
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Joined: Mon Jan 24, 2011 8:15 pm

Re: Help With Portfolio....

Post by linuxuser »

Woody999 wrote:We have been in forbearance for 3 years because we think it may not make sense to pay it off.
I am not familiar with students loans. Are you saying you don't plan on repaying any of the loans?
Are you able to do that?
wilked
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Joined: Thu Mar 24, 2011 1:50 pm

Re: Help With Portfolio....

Post by wilked »

Do I understand that you have no savings, other than what is in your Roth?

Also, why do you think you may not pay off your student loans?
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linuxuser
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Re: Help With Portfolio....

Post by linuxuser »

A duplicate post by Woody from October 2012
http://www.bogleheads.org/forum/viewtop ... &p=1519707
Topic Author
Woody999
Posts: 151
Joined: Sun Sep 16, 2012 8:37 pm

Re: Help With Portfolio....

Post by Woody999 »

linuxuser wrote:
Woody999 wrote:We have been in forbearance for 3 years because we think it may not make sense to pay it off.
I am not familiar with students loans. Are you saying you don't plan on repaying any of the loans?
Are you able to do that?
Sorry, I should have been more clear. We do plan to pay of the student loans but they give us a choice to pay interest only (2.75%) and that's what we are currently doing. My job is not very stable and the advantage of student loans is if you lose your job you don't pay a monthly fee. For someone with an unstable job this perk is better than other debt. So we have paid off other debt first. We fully intend on paying off those loans...not paying them wouldn't be very ethical.
Topic Author
Woody999
Posts: 151
Joined: Sun Sep 16, 2012 8:37 pm

Re: Help With Portfolio....

Post by Woody999 »

linuxuser wrote:A duplicate post by Woody from October 2012
http://www.bogleheads.org/forum/viewtop ... &p=1519707
Our 401Ks have completely changed so I wanted another evaluation. Is this ok? If not, please delete this thread.
wilked
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Joined: Thu Mar 24, 2011 1:50 pm

Re: Help With Portfolio....

Post by wilked »

You have $400k in debt with an unstable job? If that is the case I strongly suggest you begin supplementing your emergency fund ASAP
Topic Author
Woody999
Posts: 151
Joined: Sun Sep 16, 2012 8:37 pm

Re: Help With Portfolio....

Post by Woody999 »

wilked wrote:You have $400k in debt with an unstable job? If that is the case I strongly suggest you begin supplementing your emergency fund ASAP
Yeah the best part is the $10k in the roths would fully cover us for 6 months. We would only have the house payment plus utilities, etc and my wife's slary would nearly cover that. She makes ~$100k and our monthly espenses are ~$4k. Her job is very stable. My job is unstable but I'm in a good profession and wouldn't be without a job long...maybe about 2 months.
Last edited by Woody999 on Tue Feb 05, 2013 10:36 am, edited 1 time in total.
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BolderBoy
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Location: Colorado

Re: Help With Portfolio....

Post by BolderBoy »

Woody999 wrote:
2. Any other recomendations?

Thanks for your help!!!

Ummm, your debts aren't going away. Your emergency fund is WOEFULLY underfunded (my opinion!) Between the two of you, you make plenty of $$$.

With no kids, now is the time to maximize your retirement contributions (the ones that reduce your taxes), beef up your emergency fund and start whacking away at the student debt. Others here can better advise about investment choices.

IMHO...
Topic Author
Woody999
Posts: 151
Joined: Sun Sep 16, 2012 8:37 pm

Re: Help With Portfolio....

Post by Woody999 »

BolderBoy wrote:
Woody999 wrote:
2. Any other recomendations?

Thanks for your help!!!

Ummm, your debts aren't going away. Your emergency fund is WOEFULLY underfunded (my opinion!) Between the two of you, you make plenty of $$$.

With no kids, now is the time to maximize your retirement contributions (the ones that reduce your taxes), beef up your emergency fund and start whacking away at the student debt. Others here can better advise about investment choices.

IMHO...
I agree. We are currently putting ~$55k per year away in 401s and Roths (emergency funds). After my wife's take home pay we need ~$200 more per month for expenses. That's where the $10k comes in. And of course we have no balance high limit CCs we could use in a real emergency. We will be putting in $5500 each in our IRAs within the next few months. $20k would certainly be better than $10K. Thanks for the help!
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linuxuser
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Re: Help With Portfolio....

Post by linuxuser »

Woody999 wrote:
linuxuser wrote:A duplicate post by Woody from October 2012
http://www.bogleheads.org/forum/viewtop ... &p=1519707
Our 401Ks have completely changed so I wanted another evaluation. Is this ok? If not, please delete this thread.
What has changed in your 401Ks????
The same fund choices are there now as what you listed back in October 2012.
Topic Author
Woody999
Posts: 151
Joined: Sun Sep 16, 2012 8:37 pm

Re: Help With Portfolio....

Post by Woody999 »

[OT comment removed by admin LadyGeek] I tried to follow the advice but making changes were tricky. I'm asking to make recomendations since I changed my 401K. I tried to follow Duckies advice but honeslty it got tricky so I'm not sure if I got the percentages correct.

[Response to personal attack removed by admin LadyGeek]
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LadyGeek
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Re: Help With Portfolio....

Post by LadyGeek »

I removed a few posts containing personal attacks and responses. See: Forum Policy
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones. ...Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable. If you feel that someone has attacked you or otherwise violated the policies of this forum, do not respond in kind. Instead, contact a Moderator or Site Administrator by PM or by clicking the report button and ask them to review the problem posts.
To help the OP, I also locked the prior thread and redirected responses to here.
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NYBoglehead
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Joined: Fri May 25, 2012 9:38 am

Re: Help With Portfolio....

Post by NYBoglehead »

Woody,

I'd get to knocking out those student loans. I also think your emergency fund is woefully inadequate. While Roth contributions can be withdrawn, I don't think that should be the first place you go in an emergency.
OneDay
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Joined: Tue Feb 05, 2013 6:28 pm

Re: Help With Portfolio....

Post by OneDay »

So you make around 150k. It shouldn't be to hard to build up your EF with your salary. If her salary alone covers all your expenses then you probably have an extra 6k per month from your salary. Spend the next couple months building that up and then tackle some of the debt.
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