My thanks to Jay69
. I hope you don't mind if I piggy-back onto those comments to work out any kinks.
Jay69 wrote:I'm all for having differnet tax buckets but with with being in the 25% bracket and a state tax of 6.48% how munch Roth makes sense, 50/50, 25/75 rIRA/tIRA?
I calculated OP's combined salaries and reasonable deductions based on my idea (maxing employer plans, standard deduction, 2 personal exemptions). ahinman1
was within $12,000 of the 15% federal bracket. Adding FSA/HSA/medical-dental premiums, mortgage interest and other deductions (kids?) could bring them down to the 15% bracket, or close enough that very little would get taxed at 25%.
I'm not super-confident in my math nor with the subject of taxes. Look with a skeptical eye at whether the assumptions are accurate.
Something about the 403b makes me wonder if She (or He for that matter) expects a pension, which may be another reason to favor the Roth, if my idea is used. A Traditional IRA may win out once employer plan will no longer receive maximum contributions.
Occupier wrote:Pingo and I offer similar advice [...]
...and I don't have any issues with your suggestions. For simplicity, I didn't tilt to small caps. I didn't suggest taxable investing once I realized it would take 9 months to "save" the inheritance in tax-advantaged accounts by maxing employer/IRA contributions and then spending down the inheritance to compensate for smaller paychecks.
I hope it's good enough if bonds + cash = 15% for now, given the OP's high stock allocation, the low expected returns of bonds, the short period that the money remains in cash.
Occupier wrote:[...] but he seems to have forgotten about bonds.
Cash is now invisible to portfolio considerations until contributed due to a couple errors (except 2012 & 2013 IRA contributions because those can be made immediately). Portfolio now shows a 15% bond allocation.After contributing to IRAs in Jan 2014, OP would rebalance some money from His 401k Total Stock fund into His 401k short-term bonds so that that fund represents 15% of the portfolio. Doing so pushes the weighted ER lower at the same time that a similar amount of new contributions will have made it into the 403b's low cost Total Stock Fund.
In 2014 and 2015, the focus of employer contributions goes to Her 403b Total Stock fund, which will continue to reduce the reliance on the more expensive one (continuing to lower the weighted ER). At some point, a change may be in order.
Using Her 403b American Century Inflation-Adj Bond (ACITX) was another great suggestion, but not a priority for me at this time.ahinman1
, does either spouse expect a pension in retirement?