**Edited: answers to new questions added to end of this post**
Hi all and thanks in advance for any/all assistance provided. I'm new to Bogleheads and still somewhat intimidated by investing but I am getting better (Vanguard was on-site last week and I went to EVERY session and stayed late to ask 1 on 1 questions). I read the Wiki and I’m eager to get your perspectives on an my next retirement decisions. I have ~ $100k in a previous employer's 401k that I need to move. About $20k of it is after-tax $. The 401k at my current employer is at Vanguard and I called them yesterday to understand my options. I also met with a financial advisor last year and was thoroughly impressed… with everything but the 1.5% fees (they focus on tax advantage moves which I probably need but I’m just not comfortable paying that much, especially for funds that are already sitting in my accounts).
My questions are:
1) How do you recommend I allocate the $100k from the old 401k? I thought I had it figured out but now I’m really confused given the backdoor roth opportunity and other stuff I read recently.
2) Do you recommend I make changes to my current asset allocations?
-Single, No Children, 30s
-Emergency Fund: 9 months in MMA. I may take this down to 6-months and put the balance on my mortgage.
-Debt: $158K mortgage @ 2.8% over 15yrs. I just bought the house a few months ago for $235k and even with the low rate my stretch goal is to wipe it out in 2 years (right now I’m on pace to pay it off in 3 so I’ll need more $ to make it happen). I also have another house that is paid for. The 2 rents together are enough to cover all but < $300/month of the total carrying costs (Mortgage, Insurance, Tax, HOA, and Maintenance). The rental income would be double under different circumstances (my choice). My plan is to use these houses to fund my parents’ retirement as they’ll probably need my assistance – my guess is in 5 years. I started caring for my grammy many years ago so, God willing, it should be seamless to absorb my parents, especially if it’s after this house is paid off. Managing properties and deadbeat tenants has not been fun but watching my declining mortgage balance has been a real treat!
Tax Rate: 28% Federal, 6% local
Desired Asset allocation: I don't know but the Vanguard Investor Questionnaire recommended 80% Stocks / 20% Bonds
Desired International allocation: I have no idea how to answer this
Personal financial goals:
1. Short-term: pay for wedding and acquire primary home
2. Debt free living
3. Multiple passive income streams totally $10K/month. I have a long way to go
4. Retirement ready at age 45
Current Retirement Assets = $200K
Vanguard Target Retirement 2045 Fund
(VTIVX) 0.18% expense ratio
13.9% of portfolio
Pension: I qualify for ~$1,000/month pension from previous employer when I turn ~62
Vanguard PRIMECAP Fund Investor Shares
(VPMCX) 0.45% expense ratio
8.8% of portfolio
Vanguard LifeStrategy Growth Fund
(VASGX) 0.17% expense ratio
20.2% of portfolio
Vanguard Retirement Savings Trust
0.51% expense ratio
4.0% of portfolio
Vanguard Small-Cap Index Fund Investor Shares
(NAESX) 0.24% expense ratio
18.1% of portfolio
Vanguard Total Bond Market Index Fund Investor Shares
(VBMFX) 0.20% expense ratio
6.9% of portfolio
Vanguard Windsor II Fund Investor Shares
(VWNFX) 0.35% expense ratio
8.7% of portfolio
My Company Stock 0.22% expense ratio
Industry: Electronic Components, Sector: Technology, Stock Style: Mid Growth, US
19.5% of portfolio
I’m required to own a minimum amount of company stock and this was initially the best way to get it. I could probably get rid of this now.
Yearly 401k Contributions = Legal Max - $17,500 (+ ~1,500/year company match)
Yearly traditional IRA Contributions = Legal Max - $5,500
For the $100K I guess I can use any Vanguard funds?
For my current 401k I can use:
Fund Symbol Expense ratio
Vanguard Target Retirement Income VTINX 0.16
Vanguard Target Retirement 2010 VTENX 0.16
Vanguard Target Retirement 2015 VTXVX 0.16
Vanguard Target Retirement 2020 VTWNX 0.16
Vanguard Target Retirement 2025 VTTVX 0.17
Vanguard Target Retirement 2030 VTHRX 0.17
Vanguard Target Retirement 2035 VTTHX 0.18
Vanguard Target Retirement 2040 VFORX 0.18
Vanguard Target Retirement 2045 VTIVX 0.18
Vanguard Target Retirement 2050 VFIFX 0.18
Vanguard Target Retirement 2055 VFFVX 0.18
Vanguard Target Retirement 2060 VTTSX 0.18
Vanguard Prime Money Mkt Fund VMMXX 0.16
Vanguard Retirement Savings Trust — 0.51
BlackRock Inflation Protected Bond Inv A BPRAX 0.96
Vanguard Total Bond Mkt Index Inv VBMFX 0.2
Vanguard LifeStrategy Consrv Grwth VSCGX 0.15
Vanguard LifeStrategy Growth Fund VASGX 0.17
Vanguard LifeStrategy Mod Growth VSMGX 0.16
Vanguard Wellington Fund Inv VWELX 0.25
RidgeWorth Small Cap Value Equity I SCETX 1.2
Vanguard 500 Index Fund Inv VFINX 0.17
Vanguard PRIMECAP Fund Investor VPMCX 0.45
Vanguard Small-Cap Index Fund Inv NAESX 0.24
Vanguard Windsor II Fund Inv VWNFX 0.35
Wells Fargo Advantage Discovery Adm WFDDX 1.14
Thornburg International Value R5 TIVRX 1.06
Vanguard Emerging Mkts Stk Idx Inv VEIEX 0.33
Company Stock -- 0.22
PS: I must say, just pulling together all this information makes me feel more empowered! Please let me know if I missed anything and thanks again.
What exactly are the investment choices (fund names, tickers, expense ratios) offered in your old 401k?
I don't know but they're awful. I'm definitely going to move the funds so no need to list here.
What is the dollar size of the old 401k? Part in Roth 401k? Part in trad. 401k?
$100K total, $20k of it is roth 401k
Will your new 401k accept a transfer from your old 401k?
They will if I want, didn't seem like a reasonable way to go after talking to Vanguard. It limits me, yes?
How much in dollars do you now have in the new 401k?
How much in dollars is now in the IRA?
Do you have any other investing accounts other than the IRA and the 2 401ks?
$260K of company stock. Again this is a requirement of my employment.