Wow. The longer the thread, the harder it is to keep things straight. I printed things out to get a fresh look at your situation and realized that it is as if I never read one of your posts, even though I responded to a piece of it.
nervousnovice wrote:looking at the numbers, i inadvertantly included in the taxable cash portion our emergency fund and savings for our master bath renovation, so our amount is closer to 825K.
I'm sorry if I'm not connecting all the dots right now, but does that mean I shave $75,500 from the taxable account?
nervousnovice wrote:that cash reserves i count towards the fixed income side of the portfolio - is that correct or up for debate?
Which cash reserves? The emergency fund? The renovation money? I count any cash within
the portfolio with the bonds/fixed income because of the stability it offers. Some individuals have a large enough portfolio that they no longer have an "emergency" fund because the portfolio can cover for emergencies without being hurt. Whether you do this or not, is up to you, but I would think you have more risk given your husband's business partnership and it's debt. As such, it may be good to keep emergency savings separate and in cash. Others may disagree.
The remodeling money might as well stay in cash, assuming you'll use it soon, but it shouldn't make much difference either way. I would not count this with portfolio assets.
nervousnovice wrote:also, we are increasing our after tax savings to a significant amount, at least 50K annually and trying for more.
and as i mentioned in my other post, my i401K contributions will probably closer to $3k-$5k annually instead of 10k.
I'll make the adjustments.
nervousnovice wrote:here is a problem i noticed: the backdoor Roth's will not have enough to qualify for Admiral Shares until next year....so placeholder for now is NAESX (.24%) or better yet, VB(.10%).....can you please confirm that the Vanguard Roth's can have brokerage?
I realize things are still in flux regarding the search for where accounts will end up, but I'll address the above just in case:
You would use NAESX (0.24). VG Brokerage Services requires a $20 account fee which makes VB's ER as if it were 0.41% and 0.46%, respectively for the Roths. A regular VG mutual fund account waives the $20 account fee if you sign up for electronic notification. With all your contributions, I'm positive you'll be able fill the Backdoor Roths on January 1, 2014 to qualify for Admiral soon enough. And if you forget to exchange the fund for Admiral Shares (as if!), Vanguard will do it automatically within a few months.
nervousnovice wrote:so on the account maneuverings....i need to confirm with fidelity that i can move my TIRA from vanguard to them. then i need to confirm i can open an i401K (confirming with our accountant) and confirm fidelity will combine it for me. at this point, i might just keep it at fidelity as you originally suggested because how much in fees is moving custodians going to cost?
Sound good. I'm confident they'll all confirm that you can do it all, but confirming is key. For simplicity, it's making more and more sense to forget about Vanguard and move all possible accounts to Fido. Less logins, less places to look to get the info for rebalancing. That way you can view more of your assets in one place. Of course, you need to determine whether it's more important to you to have, say a Vanguard account with Total International Admiral and ER 0.16, which also includes International Small Caps, or greater simplicity by holding more accounts at Fidelity where you'd use FSGDX ER 0.18 without the small caps (Large and Mid Caps only). It's a personal choice. Some care more about one thing, others care more about the other.
nervousnovice wrote:already confirmed no admiral shares in i401k (sorry i doubted everyone on this!), so the JPM legacy 401k is staying put in VINIX at .04%.
Nothing wrong with that, if you prefer ER 0.04 over simplicity (and I'm not suggesting which is better). I'll be honest that I don't know which choice I'd make, because 0.04 ERs don't happen every day. It's only 6% of your portfolio so it represents a weighted cost of 1/4 of a basis point, whereas joining it to the VG i401k Total Stock Investor Class would mean weighted costs of 1 basis point, or moving it to a Fidelity i401k Total Stock Fund means weighted costs of ~1/2 of a basis point. You save yourself 1/4 to 3/4 of a basis point by keeping JPM, assuming no other account fees. The savings becomes even more miniscule (percent-wise) as the JPM 401k eventually represents only 5%, then 4%, then 3% and so on to less than 1% of the portfolio because of new contributions to the other accounts.
Also keep in mind that if you were to move that JPM 401k to an i401k Total Stock Fund, it adds a speck more small caps to your total, or you can use the money to increase your tilt significantly.
As I posted earlier, getting rid of PTTRX actually moves the needle more significantly, but only by couple basis points at that. I suppose it all adds up, but there comes a point where you need to figure out what it's all worth to you. The difference between 1% and 0.21% is huge and much more important than the difference between 0.21% and 0.18%. 1 basis point applied to a $2.5 million portfolio is a savings or cost of $250.
nervousnovice wrote:on his schwab one legacy pension, you have it with all PTTRX, which will hit me with $76 fee (once i sell BAC & CSCO at schwab, not sure what vanguard would charge or if its even available) and i'm not up for doing that again. so i need to think about this....
I did not realize there would be a transaction fee/s for buying/selling PTTRX.
Regardless, you'd probably be hit with similar fees to change accounts and/or transfer in kind to Vanguard/Fidelity/whathaveyou. $76 adds a one-time additional cost of less than 1 basis point (0.008%) to your portfolio for that year. If you consider it in isolation relative to the Pimco's ER, it adds less than 4 basis points to the 0.46 ER (so, 0.50% that year only).
nervousnovice wrote:finally, i might keep the merrill account in place and use corresponding ETFs since i have free trades there...
Any account fees? They might matter.
nervousnovice wrote:wouldn't i want to start a bit higher in small cap because the higher returns are dependent on holding it longer?
Perhaps I mispoke by calling it a "minor" tilt to small. My first idea holds a total of 24% of your US stocks in small caps (remember that VG Total Stock holds small caps, too). 25% of your combined US & International stocks would be small. By comparison, Small Caps only make up 9% of US stocks, or 6% of US and International markets when combined at market weights. I'd say that's a healthy tilt. Also VIG and VINIX dampen the impact of the small cap funds, whereas using a Total Stock fund in their stead increases the tilt a little more.
It is what it is. If you want to keep VIG and VINIX (and in the case of VIG taxes might necessitate keeping it), you find yourself limited somewhere else. If you want to raise your risk-profile given your the limitations, I suppose you could replace Small Blend with Small Value. Another alternative is to roll the PTTRX and/or the JPM accounts into the i401k to give you more flexibility with Small Caps at the expense of holding PTTRX. Only you can decide how important it is to leave those accounts alone. If you merely move the Old JPM 401k to the i401k and add it to the Small Cap fund, your Small Caps would be 40% of US stocks, but your costs increase, too.
Nothing's written in stone about how much, when, or even whether or not you'll see higher returns from your small caps. For me, I need to see where all the accounts end up because each account places restrictions on a portfolio. Also, each individual has priorities and you were a bit on the fence (earlier) about whether to tilt, so it didn't muscle out some of the other more objective priorities (tax-efficiency, keeping PTTRX and VINIX, the likelihood that VIG shouldn't be liquidated at this time do to capital gains, where the i401k ends up, etc.). They can easily trump the mere possibility of boosting returns by tilting. Why take more risk for a small impact on portfolio returns, when tax costs can easily cancel out the impact and then some?