Hi there; first poster here, though I've followed & learned quite a bit from this site in the past. I've just turned 29. I volunteered abroad for a couple years in the past so therefore limited savings. I was in graduate school, which I financed entirely with debt, but was lucky enough to land a couple of jobs. I have spent 1 year in the private sector, currently doing a year in government, with a job with my old firm lined up for when I go back in fall of 2013.
Here is my financial snapshot:
Emergency fund: Three months of expenses in Amex personal savings + various CDs.
Debt: Student loan debt ($ 153k total, from a high of $185); no other debt.
- $40k at 6.55% fixed;
- $7k at 5.00% fixed;
- $40k at 3.71% variable;
- $34k at 2.21% variable; and
- $32k at 2.5% variable.
Tax Filing Status: Single.
Tax Rate: 2013 -- 28% Federal, 6.45% State, 3.648% NYC.
2014 -- 28% Federal, 6.65% State; 3.648% NYC.
*I am currently working for the government (salary ~$70k/yr), but will return to my private-sector job by the end of 2013 (salary ~$170k/yr).
State of Residence: NY
Desired Asset allocation: 90% stocks / 10% bonds, tilting toward value/mid-low cap stocks
Desired International allocation: 50% of stocks
Current retirement assetsTaxable ($20k)
36.00% cash 401k ($20k)
(Alas, no company match.)
14.41% Vanguard 500 Index Fund Signal Shares (VIFSX) (0.05%)
7.43% Vanguard International Value Fund (VTRIX) (0.41%)
5.51% Vanguard Mid-Cap Index Fund Investor Shares (VIMSX) (0.24%)
3.74% Vanguard Small-Cap Index Fund Investor Shares (NAESX) (0.24%)
5.27% Vanguard Wellington Fund Investor Shares (VWELX) (0.27%)Roth IRA ($15k)
27.27% money market account
Presently, I am not eligible for a 401k.
When in private practice, and when I return to my firm:
- $17k in 401k
- $5k in IRA/Roth (with back-door Roth transfer if Roth ineligible)
- $10k in taxable (the balance of my taxable account was cash I had saved in the past)
Available funds in employer plan (in addition to what I hold):
- Artisan International Fund Class Investor (ARTIX) -- Redemption Fee: 2% if held < 90 days
- Dodge & Cox Stock Fund (DODGX)
- PIMCO Total Return Fund Institutional Class (PTTRX)
- Royce Total Return Fund Institutional Class (RTRIX)
- Vanguard Explorer Fund Investor Shares (VEXPX)
- Vanguard GNMA Fund Investor Shares (VFIIX)
- Vanguard Inflation-Protected Securities Fund Investor Shares (VIPSX)
- Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX)
- Vanguard PRIMECAP Fund Investor Shares (VPMCX)
- Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)
- Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
- Vanguard Windsor II Fund Investor Shares (VWNFX)
Comments / Questions:
1. I recently liquidated my taxable account & Roth at TDAm to transfer everything to Vanguard (where my employer plan is). Without thinking, I liquidated -- expecting that I would have to, rather than transferring the investments directly, but what's done is done. The reasons for the transfer were simplicity (having all accounts in one place), a desire to move toward a more passive investment strategy, and trading Vanguard funds without a transaction fee. I think my risk tolerance is high, and I'm willing to commit to higher risk-higher reward strategy, at least for the next 10 years or so, before slowly moving into more conservative investments.
2. My situation is slightly complicated in that my salary / savings of the past few months is not reflective of what I'll be earning and (hopefully) saving in the future. Living in a high cost area, I've struggled to save for retirement or pay extra on my loans this year (partly my fault, as I've failed to cut spending with salary as much as I should have). I'm almost thinking of it as a "lost year", savings-wise, which is terrible. It's several months yet before I switch back to my old job, but I'd like to hit the ground running once I get there.
3. I'd like to save for what constitutes a starter home out here too ($400-500k). Timeline was going to be 3-5 years, but as I put this all on paper, that seems unlikely, considering what I'm carrying in loans alone constitutes a significant mortgage in many parts of the country. Is it possible? Suggestions for how to go about it (alongside student loan payments & retirement savings)? i.e., how should I allocate?
4. I want aggressive, but not unreasonable. Is my desired target allocation given the foregoing too aggressive?
5. In the aggregate, my student loan payments are currently approximately $800/month. I changed the payment schedule for this year as I took a significant salary cut, but expect to revert to my former payment plan of approximately $1500/month once I'm back in my old job. I generally paid approximately $700 more, for a total of $2200 /month). Since I have liquidated, however, I'm wondering whether I should use some/all of the money in my taxable account ($20k) to pay off some of my higher-rate student loans.
6. Any thoughts generally on the available funds would be appreciated.
7. I am very high on Gabelli Focus Five Fund (GWSVX) (1.71%) (http://www.gabelli.com/Template/fund_ob ... d_code=840
), or at least the idea behind it. I was in it earlier, and it's one of my few former holdings that I would consider re-purchasing. The expense ratio, however, seems quite high. Are there comparable funds that would provide a similar investment strategy at lower expense cost? I've seen a couple "similar" funds at vanguard, but they seem to limit themselves to a couple hundred stocks rather than just dozens.
Thanks for reading, and your help/consideration. It's much appreciated!