Revised portfolio - seeking advice and options for old plans

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Revised portfolio - seeking advice and options for old plans

Postby investme » Thu Jul 25, 2013 11:27 pm

Hi all, I started another post because I feel like I finally have all the correct information together - the old post is here: viewtopic.php?f=1&t=119882

Pingo "mentored" me..hopefully he has not given up on me :)

Emergency funds: Yes
Debt: Mortgage $139,248.07 3.125% 15 year, refinanced 9 months ago
Car: 11,736.59 @ 1.75% 3 year (Just paid down balance and refinanced)
Tax Filing Status:Single
Tax Rate: 25% marginal Federal, 4.63% State
State of Residence: CO
Age: 30
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 20-25% of stocks

Taxable @ Vanguard Brokerage (~$3,000.00)
2.50% Vanguard Prime Money Market Fund (VMMXX) 0.16% expense ratio

Taxable at Morgan Stanley ($26,403.16, Employee Purchase Plan, previous employer)
20.70% Large Domestic Stock

Very Old 401k @ TIAA-CREF (~$2,916.89)
1.20% CREF EQUITY INDEX 0.42%
1.10% CREF STOCK 0.49%

Old 401k @ Fidelity (~$58,376.31 vested)
32.30% Large Domestic Company Stock (Same as Taxable account)
4.00% Hartford Capital Appreciation HLS Fund Class IA HIACX 0.67%
4.00% Spartan® 500 Index Fund - Institutional Class FXSIX 0.05%
2.80% Spartan® Extended Market Index Fund - Fidelity Advantage Class FSEVX 0.07%
2.70% American Century Investments Small Cap Value Fund Institutional Class ACVIX 1.25%
3.30% Artisan International Fund Class Investor ARTIX 1.19%
1.20% Loomis Sayles Investment Grade Bond Fund Class Y LSIIX 0.59%

Current 403b @ Fidelity (~23,927)
Company match 5% of annual pay after 5 years of service + interest
3.80% Vanguard Extended Market Index Fund Institutional Shares (VIEIX) 0.12%
9.40% Vanguard Institutional Index Fund Institutional Shares (VINIX) 0.04% and
3.80% Vanguard Developed Markets Index Fund Admiral (VDMAX) .1% and
1.90% Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) 0.07%

New Roth IRA at Vanguard (~$5,500)
4.3% Vanguard Target Retirement 2060 Fund (VTTSX) 0.18%

New Annual Contributions
$17,500to 403b

$5,500 to Roth

Very Old 401k @ TIAA-CREF options

TIAA Traditional
CREF Stock .49%
CREF Global Equities .53%
CREF Growth 0.46%
CREF Equity Index .42%
TIAA-CREF International Equity Fund - Institutional Class TIIEX .52% 2.00% redemption fee
TIAA-CREF Large-Cap Value Fund - Institutional Class TRLIX .46%
TIAA-CREF Social Choice Equity Fund - Institutional Class TISCX .19%
TIAA-CREF Mid-Cap Growth Fund - Institutional Class TRPWX .48%
TIAA-CREF Mid-Cap Value Fund - Institutional Class TIMVX .46%
TIAA-CREF Small-Cap Equity Fund - Institutional Class TISEX .48% 2.00% redemption fee
TIAA Real Estate .90%
CREF Bond Market .44%
CREF Inflation-Linked Bond .44%
TIAA-CREF High-Yield Fund - Institutional Class TIHYX .39% 2.00% redemption fee
CREF Money Market .41%
TIAA-CREF Lifecycle 2010 Fund - Institutional Class
TIAA-CREF Lifecycle 2015 Fund - Institutional Class
TIAA-CREF Lifecycle 2020 Fund - Institutional Class
TIAA-CREF Lifecycle 2025 Fund - Institutional Class
TIAA-CREF Lifecycle 2030 Fund - Institutional Class
TIAA-CREF Lifecycle 2035 Fund - Institutional Class
TIAA-CREF Lifecycle 2040 Fund - Institutional Class
TIAA-CREF Lifecycle 2045 Fund - Institutional Class
TIAA-CREF Lifecycle 2050 Fund - Institutional Class TFTIX .70%
TIAA-CREF Lifecycle Retirement Income Fund - Instl Class TLRIX .61%
TIAA-CREF Lifecycle 2055 Fund - Institutional Class TTRIX 1.61%

Old 401k at Fidelity Options
ABF LG CAP VAL INV (AAGPX) 0.97%
AM CENT ULTRA INV (TWCUX) 0.99%
HARTFORD CAP APP IA (HIACX) 0.67%
SPTN 500 INDEX INST (FXSIX) 0.05%
SPTN EXT MKT IDX ADV (FSEVX) 0.07%
AM CENT SMCAPVAL INV (ASVIX) 1.45%
ARTISAN INTL (ARTIX) 1.19%
COL/ACORN INTL Z (ACINX) 0.95%
TRP RETIRE INCOME (TRRIX) 0.57%
TRP RETIREMENT 2005 (TRRFX) 0.59%
TRP RETIREMENT 2010 (TRRAX) 0.61%
TRP RETIREMENT 2015 (TRRGX) 0.66%
TRP RETIREMENT 2020 (TRRBX) 0.70%
TRP RETIREMENT 2025 (TRRHX) 0.73%
TRP RETIREMENT 2030 (TRRCX) 0.75%
TRP RETIREMENT 2035 (TRRJX) 0.77%
TRP RETIREMENT 2040 (TRRDX) 0.78%
TRP RETIREMENT 2045 (TRRKX) 0.78%
TRP RETIREMENT 2050 (TRRMX) 0.78%
TRP RETIREMENT 2055 (TRRNX) 0.78%
AM CENT GOVT BD INV (CPTNX) 0.48%
LOOMIS INV GRD BD Y (LSIIX) 0.59%

Current 403b at Fidelity options
ABF LG CAP VAL INV (AAGPX) 0.97%
CNI/C SOC RESP EQ IS (AHSRX) 0.90%
FID CONTRAFUND K (FCNKX) 0.63%
VANGUARD INST INDEX (VINIX) 0.04%
VANG EXT MKT IDX INS (VIEIX) 0.12%
ALZGI NFJ SMCPVL IS (PSVIX) 0.87%
FID SMALL CAP GROWTH (FCPGX) 1.03%
AF EUROPAC GRTH R4 (REREX) 0.85%
VANG DEV MKTS ADM (VDMAX) 0.10%
FID FREEDOM K 2000 (FFKBX) 0.39%
FID FREEDOM K 2005 (FFKVX) 0.46%
FID FREEDOM K 2010 (FFKCX) 0.51%
FID FREEDOM K 2015 (FKVFX) 0.52%
FID FREEDOM K 2020 (FFKDX) 0.55%
FID FREEDOM K 2025 (FKTWX) 0.60%
FID FREEDOM K 2035 (FKTHX) 0.66%
FID FREEDOM K 2040 (FFKFX) 0.66%
FID FREEDOM K 2045 (FFKGX) 0.68%
FID FREEDOM K 2050 (FFKHX) 0.68%
FID FREEDOM K 2055 (FDENX) 0.69%
FID FREEDOM K INCOME (FFKAX) 0.39%
PIMCO TOTAL RETURN P (PTTPX) 0.56%
VANG TOT BD MKT INST (VBTIX) 0.07%
VANG INFL PROT INST (VIPIX) 0.07%
FID SEL MONEY MARKET (FSLXX) 0.30%

I know too much of my portfolio is in that one company stock - I got some great feedback and information in my previous post - it is doing well but nothing lasts forever - I would like to focus on retirement options first (with and without the stock) then the taxable stock.

Specific questions:
1) With my "Old 401k @ Fidelity" - 1) Should I rebalance this? If so, suggestions? 2) Should I roll it over to a Vanguard Traditional IRA and invest in Vanguard funds, if so, suggestions? I would like to consider both selling and keeping the stock.
2) Should I do anything with the "Very Old 401k @ TIAA-CREF" or let it sit? It's doing well in those funds, but wondering if I should re-balance or move the funds over to Vanguard in a Traditional
3) Thoughts on the current 403b? I moved them out of a target fund
4) Thoughts on the new Roth I just opened?

Next on my list:
1) Options for taxable stock (let it sit, sell and diversify, etc)
2) Options for taxable investing (If I have any $$ left over, existing money in the bank)

Thank you!
Last edited by investme on Sat Jul 27, 2013 6:43 pm, edited 3 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby Default User BR » Fri Jul 26, 2013 11:46 am

How close are you to phase out on Roth contributions? That's the area where rolling a 401(k) to IRA can be a problem, as it can interfere if backdoor Roth is needed. The 403(b) looks great, I'd consider consolidating the old account there.


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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Fri Jul 26, 2013 5:34 pm

How close are you to phase out on Roth contributions?


You have to make more than $188,000 a year to not be able to contribute to a ROTH right? Still have a ways to go there.

The 403(b) looks great, I'd consider consolidating the old account there.

Thanks for the feedback! That's definitely another option - I spoke to Fidelity who said I can move to an IRA and keep everything as is, then rollover whatever I want to the 403b, meaning I could keep the stock if I chose to do that.
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Re: Revised portfolio - seeking advice and options for old p

Postby Duckie » Fri Jul 26, 2013 10:39 pm

investme wrote:You have to make more than $188,000 a year to not be able to contribute to a ROTH right?

Not if you're single. See here.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Sat Jul 27, 2013 12:11 am

Thanks duckie, should still be OK, unless I get a new job :D
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sat Jul 27, 2013 2:48 pm

I have lots more questions, but you've made huge progress.

Edited to add:
investme wrote:Tax Filing Status:Single
Tax Rate: 28% marginal Federal, 4.63% State Effective tax rate: 15.41
State of Residence: CO


You know, it wasn't stated explicitly, but I thought it had been established that you're in the 25% Federal bracket. See Bob's not my name's table. I also thought you had confirmed your taxes were a lot lower than in his table here. Perhaps I misunderstood?

End edit.

investme wrote:Very Old 401k @ TIAA-CREF (~$2,916.89)
1.20% CREF EQUITY INDEX 0.42%
1.10% CREF STOCK 0.49%


Roll the TIAA-CREF 401k into your Current 403b. The funds have done well because the whole stock market has done great since March 3009. A rising tide lifts all ships. Cref Equity Index merely tracks the whole US market and the second one probably offers the same returns, give or take a little depending on the year. You can get the same returns at lower costs (leaving more for you) by having it in your Current 403b which can also be used to track the entire US stock market at lower costs.

investme wrote:Old 401k @ Fidelity (~$58,376.31 vested)


Leave your Old Fidelity 401k alone for right now. Do not roll it over to Vanguard.

Also, would you check the plan documentation for that Old Fidelity 401k to see if you have access to Fidelity's BrokerageLink, and if so, what fees (if any) are charged to acces BrokerageLink?

Also, do you expect to become fully vested at any time in the future in the future? Is the remaining amount kept separate (separate funds), or is it all mixed together, but they keep an account of how much is yours and how much is not?

investme wrote:Current 403b @ Fidelity (~23,927)
Company match 5% of annual pay after 5 years of service + interest


More questions:
Do you expect to work there long enough for the match + interest to be yours?
So, I take it the money is kept separate in a money market or some form of safe investment?
When will it be yours to allocate?
Are the matching contributions already set aside in the $23,927 cited above? If not, how much is it?
How much is the match per year in dollars?

investme wrote:New Roth IRA at Vanguard (~$5,500)
4.3% Vanguard Target Retirement 2060 Fund (VTTSX) 0.18%


Leave your Roth alone for the moment. It'll be close to 60 days before Vanguard lets you move the money to a different fund, anyway.

investme wrote:Next on my list:
1) Options for taxable stock (let it sit, sell and diversify, etc)
2) Options for taxable investing (If I have any $$ left over, existing money in the bank)


I am already working on this, but you must learn a few more things about your 403b:

Please check your Plan Document(s) to see if your Current 403b allows optional after-tax contributions plus quarterly or yearly in-service withdrawals of only the after-tax contributions, in which case you could directly roll those after-tax contributions into your Roth IRA and never pay taxes on earnings again. Please note that I am not referring to Roth 403b contributions, but to after-tax contributions beyond the $17,500 Traditional/Roth limit which are useful for the Backdoor Roth. Here are 4 links talking about after-tax contributions: here, here, here and here.

If your employer allows you to make regular in-service withdrawals of your 403b after-tax contributions (again, these are not the same as Roth 403b contributions), you could have such contributions directly rolled over to your VG Roth account and they'd be tax-free and RMD-free forever. They do not affect your Roth IRA contribution limits.

Also, if you can do after-tax 403b contributions, we will formulate a plan to essentially "move" your taxable cash at Vanguard into your 403b and into your Roth (it's not literally a "transfer", but the result is the same). That plan would also allow for your taxable investing (via the 403b) to become tax-free investing in your Roth at Vanguard. It also gives you greater flexibility to rebalance and to have exactly the asset allocation you desire with the best possible fund choices.

If in-service withdrawals are not allowed, don't bother with 403b after-tax contributions, and we'll formulate a plan accordingly.

Fund suggestions are coming, but your account situation is far more important right now because it has a major influence on fund suggestions.
Last edited by pingo on Sat Jul 27, 2013 4:43 pm, edited 9 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sat Jul 27, 2013 3:15 pm

^ Edits above.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Sat Jul 27, 2013 6:42 pm

Thanks pingo! I will answer what I can for now and get back to you with the rest:

You know, it wasn't stated explicitly, but I thought it had been established that you're in the 25% Federal bracket. See Bob's not my name's table. I also thought you had confirmed your taxes were a lot lower than in his table here. Perhaps I misunderstood?


Correct, I mis-calculated, did the math again and it's 25% marginal tax rate.

Roll the TIAA-CREF 401k into your Current 403b. The funds have done well because the whole stock market has done great since March 3009. A rising tide lifts all ships. Cref Equity Index merely tracks the whole US market and the second one probably offers the same returns, give or take a little depending on the year. You can get the same returns at lower costs (leaving more for you) by having it in your Current 403b which can also be used to track the entire US stock market at lower costs.


Will do, thanks!

Leave your Old Fidelity 401k alone for right now. Do not roll it over to Vanguard.


Was thinking of also rolling it into the current Fidelity 403b.

Also, would you check the plan documentation for that Old Fidelity 401k to see if you have access to Fidelity's BrokerageLink, and if so, what fees (if any) are charged to acces BrokerageLink?


BrokerageLink does show up in the list of available investments, but I will find out all the details and report back

Also, do you expect to become fully vested at any time in the future in the future? Is the remaining amount kept separate (separate funds), or is it all mixed together, but they keep an account of how much is yours and how much is not?


The old 401k will never become fully vested unfortunately. It's hard to say exactly how it works, the total balance is $64,362.87, but vested is $57,662.15 - it does not break it down - but if I remember correctly the company match was in the company stock - so the other funds should completely belong to me and have accurate totals.

Do you expect to work there long enough for the match + interest to be yours?
So, I take it the money is kept separate in a money market or some form of safe investment?
When will it be yours to allocate?
Are the matching contributions already set aside in the $23,927 cited above? If not, how much is it?
How much is the match per year in dollars?


Yes, I do, if I got a new job I would make sure the salary would make up for the money lost.

It is separate. It says "You're scheduled to become 100% vested on 12-31-2015"
Closing Balance as of 01-01-201 is $10,268.32 - this is separate from the 23,927 403b total. It's essentially a pension plan, hard to tell exactly how it works, but I'll see what I can find out.

While researching, I did find my company offers a 457(b) plan. **EDIT Never mind, not eligible**"

I'll see what else I can find for the other questions you had on the plan. Thanks!
Last edited by investme on Sat Jul 27, 2013 7:02 pm, edited 1 time in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sat Jul 27, 2013 7:09 pm

investme wrote:
Leave your Old Fidelity 401k alone for right now. Do not roll it over to Vanguard.


Was thinking of also rolling it into the current Fidelity 403b.


I know. Leave it there for now. You can obtain a good portion (if not all) of your U.S. equities at the Old 401k at even lower costs than the Current 403b, even though the 403b also has them at low cost. Also, depending on what we find out about BrokerageLink as offered by the Old 401k vs. the Current 403b, the account may become even more important. The good news is that you can view and manage both accounts at the same time from the Fidelity portal...or at least you should be able to see them all together.

Also, would you check the plan documentation for that Old Fidelity 401k to see if you have access to Fidelity's BrokerageLink, and if so, what fees (if any) are charged to acces BrokerageLink?


BrokerageLink does show up in the list of available investments, but I will find out all the details and report back


While you're at it, check to see if you also get BrokerageLink in the Current 403b and let's compare the details (i.e. account fees associated with it).

While researching, I did find my company offers a 457(b) plan. It says "you can choose from the same flexible investment options you have with the Employee Savings Plan with the exception of the self-directed brokerage window". It says I can "request a distribution" anytime after I leave the company. Even more confusing, it says "Unlike with the Employee Savings Plan, any funds you invest in the 457(b) Plan are deemed by law to be part of (Company) general assets and are therefore subject to the claims of (Company) creditors."
The company is in very good shape for a non-profit. The max for this account is 17,500 and it does say "you should not contribute unless you are maximizing your contributions to the Employee Savings Plan" which I am doing now. Game changer?


Hmm. Per the above, you do have BrokerageLink available through the Current 403b. Let's compare the BrokerageLink account fees between the Old 401k and the Current 403b.

I almost flipped when I saw that you can also have a 457 option...but I'll have to do some reading to brush up. Generally, a governmental 457 is a great option. However, the usual recommendation is to avoid non-governmental 457s because of the last part quoted where company creditors can get it if your company gets into trouble. In other words, you put up all of the capital and take all of the investment risk and it's not considered your money until or unless you leave the Company. I don't like that at all.

Some non-governmental 457s will not allow you to roll the assets to another plan, rather the money must stay with the Company until you take (a) distribution(s), which is another red flag. That means the only way you get your money, if you get it at all, is by withdrawing it all upon termination of employment. You don't pay tax penalties, as you would by withdrawing from a 401k, but you do pay income taxes on the whole distribution which can be BAD if you move to another job that pays the same or better.
Last edited by pingo on Sat Jul 27, 2013 7:14 pm, edited 3 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sat Jul 27, 2013 7:11 pm

investme wrote:While researching, I did find my company offers a 457(b) plan. **EDIT Never mind, not eligible**"


Just saw this. Quandry solved!
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Sat Jul 27, 2013 8:45 pm

Both funds appear to have the Brokeragelink under investment options, but I will call Fidelity to be sure. They both state the same information:

"There is no annual fee for your BrokerageLink® account."
"Please refer to the Fidelity BrokerageLink® Commission Schedule for a listing of all applicable brokerage fees."
There is a minimum investment:
"There is no minimum amount for direct payroll contributions into a BrokerageLink account, but there is an initial minimum of $2500.00 to open an account and a $1000.00 minimum for each subsequent transfer from a Standard Plan Option."

Not sure if you need to know this - for 403b:
Eligible security types: "Fidelity mutual funds and non-Fidelity mutual funds available through Fidelity FundsNetwork®."
Ineligible: "Tax-exempt securities, employer securities (includes all
types of equities, e.g. common stock, preferred stock, convertible stock, options), physical certificates, precious metal, limited partnerships, futures contracts, commodities, interest rate options, currencies and
currency options, CAPS, options levels 3, 4, and 5."
Prohibited: "In addition, you may not invest in any other issue/security which, may result in a prohibited transaction under the Plan."
Standard plan options: "The standard, non-brokerage investment options available through the Employee Savings Plan."

For the 401k:
Eligible security types: "Stocks, corporate bonds, zero-coupon bonds, U.S. Treasury securities, mortgage securities and U.S. government agency bonds, certificates of deposit (CDs), unit investment trusts (UITs), foreign securities (through American Depositary Receipts), Fidelity mutual funds and
non-Fidelity mutual funds available through Fidelity FundsNetwork®, and options (covered call writing, buy puts and calls) with agreement"

Ineligible: "Fidelity mutual funds and non-Fidelity mutual funds offered through the (Old 401k plan), tax-exempt securities, employer securities (includes all types of equities, e.g. common stock, preferred stock, convertible
stock, options), physical certificates, precious metal,
limited partnerships, futures contracts, commodities,
interest rate options, currencies and currency options, CAPS, options levels 3, 4, and 5"
Prohibited: "The (Old 401k plan) may restrict non-vested assets, a
source of money or a percentage of each participant's account from being transferred to a BrokerageLink account."

The commission schedule looks the same for both - can be found here https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/Brokerage_Commissions_Fee_Schedule.pdf
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sat Jul 27, 2013 10:27 pm

Looks great.

This is what's important, assuming I read the document correctly:
 There is no additional account fee to use BrokerageLink.
 You can purchase Fidelity funds with no transaction fees / commission-free, so only expense ratios will matter (assuming we're not going to buy any funds with loads) because I'm going to have you use BrokerageLink to purchase your international equities, rather than use the 403b Spartan International Fund. Don't get me wrong, Vanguard Developed Market and Fidelity Spartan International index funds are great international funds, but they only cover international developed markets (no emerging markets). Fidelity Spartan Global-Ex US Index Fund - Advantage Class (FSGDX) ER 0.18 is complete, holding your International Developed and Emerging Markets at market weights. (Just right!)

I might let you move the Old 401k into the Current 403b after all. :wink:

But hold off until you find get back to me about after-tax contributions and withdrawals/distributions. That'll give me time to work out some ideas for your consideration.
Last edited by pingo on Mon Jul 29, 2013 5:59 pm, edited 3 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Sun Jul 28, 2013 10:04 am

Will do, thanks pingo, question, how does that compare to the International fund in the current 403b:

Vanguard Developed Markets Index Fund Admiral (VDMAX) .1%

Is the issue the same where it only covers developed international markets?

Current 403b also has this option:

AF EUROPAC GRTH R4 (REREX) .85%

"The fund invests primarily in common stocks of issuers in Europe and the Pacific Basin that the investment adviser believes have the potential for growth."
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sun Jul 28, 2013 11:52 am

investme wrote:Will do, thanks pingo, question, how does that compare to the International fund in the current 403b:

Vanguard Developed Markets Index Fund Admiral (VDMAX) .1%

Is the issue the same where it only covers developed international markets?


Sorry about that! Yes, the issue is the same. I edited my post to include VG Developed.

Regarding EuroPacific Growth, it's a fine fund. It's not the first choice, academically speaking, because it has a high expense ratio and isn't an index fund. Since it looks like you can get Fidelity Spartan Global-Ex US Index Fund - Advantage Class (FSGDX) ER 0.18 through BrokerageLink, FSDGX becomes first choice.

A few things about EuroPacific Growth (REREX), in case you look. Usually no matter how you look at EuroPacific, it appears to outperform FSGDX when looking backwards over long periods. There's a bit of a trick to it. REREX has been subtly overweighting Emerging Markets and that bet has worked out for the fund (although probably not lately). FSGDX does not overweight EM and it it vastly more diversified for a better risk adjusted return. When REREX is the only option one has, I don't have a problem with it as long as the ER doesn't go above 0.85% (although 0.85% does make me uncomfortable). Most Bogleheads would probably advise VG Developed over REREX (if FSDGX were not available) because that's what the academic literature supports: index funds at low costs.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Mon Jul 29, 2013 5:15 pm

Please do the following for me:

1. Calculate your annual company match in dollars.

If you make $17,500 in personal pre-tax Traditional 403b contributions, your employer match means that you have new annual contributions of more than $17,500 which should be taken into consideration.

2. Find out if you must maintain a minimum balance in your Current 403b in order to use BrokerageLink. I don't see any mention of it in the link you provide, but it should be included in your 403b Plan Document. If not, you can call Fidelity.

3. Assuming there is no Current 403b account minimum required if you use BrokerageLink, open a BrokerageLink account, move $20,000 to BrokerageLink and put $10,000 in FSGDX and $10,000 in FSEVX. Perhaps you can do the transactions by phone so they can tell you whether the funds are accessible to you before going through all the effort. (If I understand your link correctly, you should be able to do it by phone w/o a commission.) The reason for this is that I want to be sure you can access these two funds via BrokerageLink. The 403b wants you to use the funds offered it its lineup, whenever possible. Therefore, you would be restricted from accessing the same funds via BrokeragLink, in order for you not to access them at better pricing if you can find them. I'm not having you purchase the same funds, but they are competing funds (and in the case of "Extended Market" it's identical, but at a lower cost), so I'm paranoid enough to think you might be denied access to FSGDX or FSEVX.

If you are denied access to either FSGDX or FSEVX (or both), put the "denied" money back into VG Institutional Index Fund (VINIX). Also, if you are denied either fund or both, I will probably recommend you keep the Old 401k.

Assuming you can access [b]both of them, I will have you roll the Old 401k into the Current 403b. Make sense?
Last edited by pingo on Mon Jul 29, 2013 11:39 pm, edited 6 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Mon Jul 29, 2013 6:12 pm

^ Major edits/additions above.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Mon Jul 29, 2013 10:38 pm

Thanks Pingo! I did find out today my plan does not accept any after tax money. Appreciate the info - will advise on questions/comments on the rest ASAP and will also call Fidelity to make sure we are good to go. Thanks!!
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Fri Aug 02, 2013 4:51 pm

sorry for the delay! I spoke to Fidelity who said no issues or fees moving into those funds via Brokeragelink and also no minimum balance in the 403b, however they did say according to the plan rules I cannot set up the Brokeragelink as a future election - so basically the money will have to accumulate up to $1,000 into the 403b into one of the existing funds and manually moved - what are your thoughts on this? I wanted to run this by you before making the move.

Thanks!
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Fri Aug 02, 2013 8:21 pm

Okay. I've been working on something, but I'll need to wait until tonight when I can focus a little more on the whole picture. While you're waiting, it would still be helpful if you would calculate your annual company match in dollars. If you make $17,500 in personal pre-tax Traditional 403b contributions, an additional employer match means that you have new annual contributions of more than $17,500 which should be taken into consideration.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sat Aug 03, 2013 12:57 pm

You indicate a desire for 90% Stocks / 10% Bonds with 20-25% of equities in International markets, but you have some special circumstances: extreme risk with Company Stock, and your employer match is 8% of the portfolio (if included), but it's locked in a bond-like arrangement (inflation + 3% interest). Also, you seemed to take an early liking to the Vanguard LifeStrategy Growth Fund in the prior thread, so I structured assets to be like it: 80% Stocks / 20% Bonds with 30% of equities in International Markets. If one doesn't count the unvested employer match, you're close to 90/10 anyway, but with a lot more risk due to the Company stock. :wink:

Asset allocation: 80% stocks / 20% bonds
International allocation: 30% of stocks
Translation: 20 Company Stock / 29 US Lg / 7 Ext Mkt / 24 Int'l / 20 Bond <--I subtracted Company Stock (20%) from US allocation (56%) and split the rest at market weight. (4:1 Lg:Ext)
Portfolio Size: $118,711.16 --> approximately. :wink:


Vanguard Taxable (~$3,000.00 or 3%)
03% Vanguard Total International (VGTSX) 0.22 <--Vanguard converts to VTIAX w/ ER 0.16% @ $10k; not a taxable event.

Morgan Stanley Taxable ($26,403.16 or 22%)
20% Large Domestic Stock <--Only transfer in-kind to Vanguard after assembling all cost-basis/gains/losses information. Tax Loss Harvest when/if you see losses.

Current 403b @ Fidelity ($83,808 or 71%) <--Old 401k moves here.
28% Vanguard Institutional Index Fund (VINIX) 0.04 <--$12550/yr.
07% Fidelity Spartan Extended Market - Advantage (FSEVX) 0.07 <--3150/yr. Contributions go to VG Ext Mkt until transfered.
18% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) 0.18 <--$1125/yr. Contributions go to VG Dev Mkt until transfered.
12% Vanguard Total Bond Market (VBTIX) 0.07 <--$675/yr.
08% Company Match held in Bond or Cash like instrument vested starting 2016. <--Match goes here ($5000/yr?); change assets and contributions to VBTIX in 2016.

Vanguard Roth (~$5,500 or 5%)
04% Vanguard Total International (VGTSX) 0.22) <--$5,500/yr; Vanguard converts to VTIAX w/ ER 0.16% @ $10k.

All accounts = 101% due to rounding

Weighted ER = 0.07%.

* Extra cash for saving goes into CD, high interest savings or Treasury.gov Series i-Bonds for downpayment.
* Assumes no tax consequences for selling Company Stock in Old Fido 401k.
* Company stock becomes a smaller part of the portfolio with new contributions.
* Simpler, more diversified, lower cost. All else being equal, the lowest cost portfolio wins.
* It's no biggie if initially transferring $10,000 to 403b BrokerageLink Fidelity Ext Mkt Advantage (FSEVX) results in it being more than 7% of portfolio for a little while.
* Remember that the BrokerageLink transfer minimum of $1000 is probably a total. So, you can transfer from 403b Ext & Int'l to the BrokerageLink Ext & Int'l once very year when you rebalance (nothing wrong with it), or every 3 months when your 403b Ext is ≥ $700 and your 403b Int'l is ≥ $300 because the total transfer amount is $1000.
Last edited by pingo on Mon Aug 12, 2013 7:50 pm, edited 3 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Sun Aug 04, 2013 1:06 pm

Thanks Pingo! Sorry for the delayed response - I have been working through this to make sure I understand - I believe I do now.

Between my old 401k if I rollover completely to the 403b (including selling the company stock) the total with the 403b amount is about 83,808 100% vested.

Current 403b @ Fidelity ($95,489.62 or 73%) <--Old 401k moves here.
28% Vanguard Institutional Index Fund (VINIX) 0.04 <--$12550/yr.
07% Fidelity Spartan Extended Market - Advantage (FSEVX) 0.07 <--3150/yr. Paycheck contributions go to VG Ext Mkt until you reach transfer minimum.
18% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) 0.18 <--$1125/yr. Paycheck contributions go to VG Dev Mkt until you reach transfer minimum.
12% Vanguard Total Bond Market (VBTIX) 0.07 <--$675/yr.
08% Company Match held in Bond or Cash like instrument vested starting 2016. <--Match goes here ($5000/yr?); change assets and contributions to VBTIX in 2016.


If I understand the initial allocations:
71% Vanguard Institutional Index Fund (VINIX) - keep 59,500 here
18% Fidelity Spartan Extended Market - Advantage (FSEVX) - Move 15,000 here (You had originally said move 10k here to open, I understand why now and where this came from)
6.4% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) - Move 5,363 here (You had originally said move 10k here to open, I understand now and where this came from)
3.8% Vanguard Total Bond Market (VBTIX) 0.07 - Leave 3,184

Now moving forward, for future allocations, if I understand:
71% VINIX
18% into FSEVX, but until minimum add to VG Ext Mkt VIEIX
6% into FSDGX, but until minimum add to VG Dev Mkt VDMAX
4% Vanguard Total Bond Market VBTIX

Did I get that right?

As far as the employee match, I will need to run it by HR again because it's confusing - I think we will have to estimate since I do not know what my salary will be when vested and same with the annual change in inflation - however I think we can get a pretty good idea, your wild guess looks appropriate from initial calculations.

Morgan Stanley Taxable ($26,403.16 or 20%)
20% Large Domestic Stock <--Can this be transferred "in-kind" to Vanguard? Also, Tax Loss Harvest when/if you see losses.


I will find out - quick question - I know we need to look at all investments in a portfolio as one, but, as an example, if say I'm planning on selling this stock in 5-10 years, does this throw anything off? When that happens, I assume we will rebalance the retirement fund? I'm not sure if I would sell this to say put a down payment on another home, or to improve diversification. As mentioned the stock has been a consistent performer but nothing lasts forever.

Things are coming together - this is really exciting and I really thank you for all your time and effort!!!!!
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Fri Aug 09, 2013 12:31 pm

Sorry once again for the delay, I have been out of town - but do have some additional information, and I really apologize for not knowing or finding this out before.

Turns out the "company match" my company offers is a deferred benefits or pension plan, based on years of service - it goes into company accounts.

There is no way for me to dictate where the money goes - at retirement age is the only time I can either take the money out or roll it over to another account.

If I leave the company before and not at retirement age, if I'm vested, the money accrues the interest mentioned until I reach retirement age, if not vested the money is forfeited.

If I left the company after being 5 years vested, upon retirement I would have $138, 379. If you need additional projections, please let me know.

Morgan Stanley Taxable ($26,403.16 or 20%)
20% Large Domestic Stock <--Can this be transferred "in-kind" to Vanguard? Also, Tax Loss Harvest when/if you see losses


Yes it can, should I proceed with this transaction?

Based on the above, do we need to change the allocations? Thank you!
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Fri Aug 09, 2013 6:37 pm

investme wrote:Between my old 401k if I rollover completely to the 403b (including selling the company stock) the total with the 403b amount is about 83,808 100% vested.


Okay, I was sure I only added vested amounts, but I only have a few minutes here or there right now, so I'll go back and change the error when I can.

investme wrote:Now moving forward, for future allocations, if I understand:
71% VINIX
18% into FSEVX, but until minimum add to VG Ext Mkt VIEIX
6% into FSDGX, but until minimum add to VG Dev Mkt VDMAX
4% Vanguard Total Bond Market VBTIX

Did I get that right?


Looks right as I eyeball it without much scrutiny. I'll have to go back again when my head is a little clearer, but the idea is to match the percent of your contributions (all of them) to the percent in your asset allocation. (It doesn't have to be perfect. From what I see, it looks right as to how your 401k contributions should be split in isolation, which is also part of it once you account for the fact for whatever percent of your total contributions is going to the Roth.

investme wrote:As far as the employee match, I will need to run it by HR again because it's confusing - I think we will have to estimate since I do not know what my salary will be when vested and same with the annual change in inflation - however I think we can get a pretty good idea, your wild guess looks appropriate from initial calculations.


We can use current figures for now. No need to know what your salary will be when your finally vested. Look at your paystub. There should be a line item showing your personal contribution amount and a different line item (sometimes in a different area of the paystub) showing the dollar amount of the match. You can then figure out what the total would be for 12 months of matching. If you're paid 2x per month, multiply it by 24. If you're paid once every 2 weeks, you'll have to figure out how many pay periods are in the year (I don't know off-hand).

investme wrote:Morgan Stanley Taxable ($26,403.16 or 20%)
20% Large Domestic Stock <--Can this be transferred "in-kind" to Vanguard? Also, Tax Loss Harvest when/if you see losses.


investme wrote:quick question - I know we need to look at all investments in a portfolio as one, but, as an example, if say I'm planning on selling this stock in 5-10 years, does this throw anything off?


Yes, because it's not part of your (retirement) portfolio. It is for short-term goals.

investme wrote:When that happens, I assume we will rebalance the retirement fund? I'm not sure if I would sell this to say put a down payment on another home, or to improve diversification. As mentioned the stock has been a consistent performer but nothing lasts forever.


A singe company stock is far too risky for short-term savings. If you find out that you'll be unable to make after-tax 401k contributions that can also be rolled into a Roth IRA, I would suggest that your extra savings go into i-Bonds, cash and/or short-term bonds to be considered separately and to replace your Large Domestic Stock as downpayment money.

If you learn that you are able to "backdoor" some after tax contributions through your 401k, we can come up with another plan...or maybe not. :happy
Last edited by pingo on Sun Aug 11, 2013 4:13 am, edited 3 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Fri Aug 09, 2013 6:50 pm

investme wrote:Turns out the "company match" my company offers is a deferred benefits or pension plan, based on years of service - it goes into company accounts.

There is no way for me to dictate where the money goes - at retirement age is the only time I can either take the money out or roll it over to another account.

If I leave the company before and not at retirement age, if I'm vested, the money accrues the interest mentioned until I reach retirement age, if not vested the money is forfeited.


Do they let you know what the interest rate is?

You'll have to decide how to look at money. Some might consider it to be "bond-like" and count it with bonds. Others might choose to ignore it and allocate their portfolio as a separate unit.

investme wrote:
Morgan Stanley Taxable ($26,403.16 or 20%)
20% Large Domestic Stock <--Can this be transferred "in-kind" to Vanguard? Also, Tax Loss Harvest when/if you see losses


Yes it can, should I proceed with this transaction?


Maybe...maybe not. Are there any costs associated with holding it at Morgan Stanley? I always assume there are. If you aren't paying anything for the account, by all means keep it there. They might be a better custodian for such an asset than Vanguard. (some people are less than thrilled with the brokerage side of Vanguard's operations.)

If you're going to be paying more than $20/year at MS, transferring in-kind may make sense if you'd prefer to hold everything you can at Vanguard Before doing an in-kind transfer you want to be sure you have all of your cost basis information from Morgan Stanley. You will probably not be able to access it once things are moved to Vanguard. (I'm not sure if you would be able to if you chose another firm as a broker for that stock.) Also read the forum Wiki and other places for an understanding of what it entails.

investme wrote:Based on the above, do we need to change the allocations?


Probably, but it's fine if you've already moved funds around. The difference in asset allocation may not be very pronounced.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Fri Aug 09, 2013 9:49 pm

Do they let you know what the interest rate is?


They say it's the annual change in inflation, reported as the consumer price index, each October plus 3%. Will have to think about how to consider it, probably as a separate allocation for now.

Maybe...maybe not. Are there any costs associated with holding it at Morgan Stanley? I always assume there are. If you aren't paying anything for the account, by all means keep it there. They might be a better custodian for such an asset than Vanguard. (some people are less than thrilled with the brokerage side of Vanguard's operations.)


There is not, but it would be nice to have it in my Vanguard account since I am much more active there - I don't even know how to login to the Morgan Stanley account. I called today and it seemed cheaper if I wanted to sell to with Vanguard (only $7 for the transaction). Good call on the cost basis I will inquire.

A singe company stock is far too risky for short-term savings. If you find out that you'll be unable to make after-tax 401k contributions that can also be rolled into a Roth IRA, I would suggest that your extra savings go into i-Bonds, cash and/or short-term bonds to be considered separately and to replace your Large Domestic Stock as downpayment money.


Not allowed with my current plan :( I do have some extra cash I was looking at investing (including the 3k currently in the money market fund) - does Vanguard have good i-Bonds or short-term bond funds? I'll have to do some research.

Thanks again Pingo!!
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Sat Aug 10, 2013 6:22 pm

If I understand the initial allocations:
71% Vanguard Institutional Index Fund (VINIX) - keep 59,500 here
18% Fidelity Spartan Extended Market - Advantage (FSEVX) - Move 15,000 here (You had originally said move 10k here to open, I understand why now and where this came from)
6.4% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) - Move 5,363 here (You had originally said move 10k here to open, I understand now and where this came from)
3.8% Vanguard Total Bond Market (VBTIX) 0.07 - Leave 3,184

Now moving forward, for future allocations, if I understand:
71% VINIX
18% into FSEVX, but until minimum add to VG Ext Mkt VIEIX
6% into FSDGX, but until minimum add to VG Dev Mkt VDMAX
4% Vanguard Total Bond Market VBTIX


Looks right as I eyeball it without much scrutiny. I'll have to go back again when my head is a little clearer, but the idea is to match the percent of your contributions (all of them) to the percent in your asset allocation. (It doesn't have to be perfect. From what I see, it looks right as to how your 401k contributions should be split in isolation, which is also part of it once you account for the fact for whatever percent of your total contributions is going to the Roth.


Pingo, as I look further at this, I seem to have confused myself. It looks like with the initial allocation, it's about 96% stock and 4% bonds (Included the Roth VGTSX in this calculation). About 12% of this is in International stock.

What am I missing?

Sorry for being so dense!!
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sun Aug 11, 2013 4:36 am

Since you asked, I'll try to explain how we come to the 403b contributions. I'm doing the numbers independently, so they may vary slightly due to rounding here and not rounding there. Once we settle on a final portfolio recommendation, it will have the numbers you need.

We try to match new contributions with asset allocation:
45 S&P 500 / 11 Ext Mkt / 24 Int'l / 20 Bond

New Annual Contributions = $28,000
$17,500 403b Personal Contribution is used for funds/amounts unfilled by smaller accounts/contributions.
$ 5,500 Roth Contribution is 20% of total going to International, leaving 4% to be filled by 403b contributions.
$ 5,000 Employer Match is 18% of total going to bond-like arrangement, leaving 2% to be filled by 403b savings.

403b Personal Contributions = $17,500
2% of $28,000 = $560 which equals 3% of 403b Personal Contribution for Bonds.
4% of $28,000 = $1120 which equals 6% of 403b Personal Contribution for International.
11% of $28,000 = $3080 which equals 18% of 403b Personal Contribution for Extended Market.
45% of $28,000 = $12,600 which equals 72% 403b Personal Contribution for S&P 500.
Last edited by pingo on Sun Aug 11, 2013 6:47 pm, edited 5 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sun Aug 11, 2013 5:18 am

pingo wrote:
investme wrote:quick question - I know we need to look at all investments in a portfolio as one, but, as an example, if say I'm planning on selling this stock in 5-10 years, does this throw anything off?


Yes, because it's not part of your (retirement) portfolio. It is for short-term goals.


Do you think that any extra cash you can save would be enough to replace the Large Company Stock as a downpayment for a house in 5-ish years? If so, I'd ignore the stock and leave with the retirement portfolio because you can just save cash for the downpayment or whatever you use it for. I'd rather you have/save that money in a CD or iBond or high interest savings so you don't have to rely on Large Company Stock. Then you don't put your goal at risk and you can let that stock be what it is: risky and volatile.

Another idea is this: Placing Cash Needs in a Tax-Advantaged Account, which allows the taxable Company Stock to help you with a downpayment, whether you sell it at a loss or a gain. Such a scenario would require you to allocate 20 more percentage points to bonds/cash because a pre-determined amount would not actually be for retirement even though they would be mixed with retirement assets. I would also still have you place any extra cash savings into stable savings vehicles rather than invest in more stocks.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Sun Aug 11, 2013 5:54 am

If you go back right now and look at my initial portfolio "worksheet" it won't make sense because I began making adjustments and then it dawned on me:

investme wrote:
pingo wrote:Do you expect to work there long enough for the match + interest to be yours?
So, I take it the money is kept separate in a money market or some form of safe investment?
When will it be yours to allocate?
Are the matching contributions already set aside in the $23,927 cited above? If not, how much is it?
How much is the match per year in dollars?


[...]

It is separate. It says "You're scheduled to become 100% vested on 12-31-2015"
Closing Balance as of 01-01-201 is $10,268.32 - this is separate from the 23,927 403b total. It's essentially a pension plan, hard to tell exactly how it works, but I'll see what I can find out.



pingo wrote:
investme wrote:Between my old 401k if I rollover completely to the 403b (including selling the company stock) the total with the 403b amount is about 83,808 100% vested.


Okay, I was sure I only added vested amounts, but I only have a few minutes here or there right now, so I'll go back and change the error when I can.


It dawned on me that I included the the total balance of the unvested match in the 403b figures. At the time they seemed like they might be part of the 403b, but we have now clarified that it is a totally different vehicle altogether.

Would that account for the discrepancy between my 403b figure and your 403b figure? If I plug in the 403b total you recently gave me, does that mean I should separate out the pension/match account and give it the total cited earlier?
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Sun Aug 11, 2013 2:29 pm

It dawned on me that I included the the total balance of the unvested match in the 403b figures. At the time they seemed like they might be part of the 403b, but we have now clarified that it is a totally different vehicle altogether.

Would that account for the discrepancy between my 403b figure and your 403b figure? If I plug in the 403b total you recently gave me, does that mean I should separate out the pension/match account and give it the total cited earlier?


I think so, the confusing part is the re-allocation to the new funds and then moving forward - I think we should exclude the company match or pension plan based on the new information.

The total amount from a fully rolled over 401k + TIAA-CREF account and current 403b is about $89082.6 - can we look at getting that to the right funds?

Do you think that any extra cash you can save would be enough to replace the Large Company Stock as a downpayment for a house in 5-ish years? If so, I'd ignore the stock and leave with the retirement portfolio because you can just save cash for the downpayment or whatever you use it for. I'd rather you have/save that money in a CD or iBond or high interest savings so you don't have to rely on Large Company Stock. Then you don't put your goal at risk and you can let that stock be what it is: risky and volatile.


Definitely possible - I will have to think about this a little more. I definitely plan on selling this stock before retirement - or if it loses value, which would be difficult considering what it's made and what I've bought it for, as well as the forecasted projection - since I am already selling the portion in the 401k I believe that alleviates some of the risk -just not sure what I would spend the money on yet - the only goal in the horizon I can think about is down payment on a house.

Another idea is this: Placing Cash Needs in a Tax-Advantaged Account, which allows the taxable Company Stock to help you with a downpayment, whether you sell it at a loss or a gain. Such a scenario would require you to allocate 20 more percentage points to bonds/cash because a pre-determined amount would not actually be for retirement even though they would be mixed with retirement assets. I would also still have you place any extra cash savings into stable savings vehicles rather than invest in more stocks.


I do have some excess cash, outside of my emergency funds I can look at doing this, but not yet at the value of what the company stock is currently.

Thanks again!!
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Mon Aug 12, 2013 7:46 pm

investme wrote:I think so, the confusing part is the re-allocation to the new funds and then moving forward - I think we should exclude the company match or pension plan based on the new information.

The total amount from a fully rolled over 401k + TIAA-CREF account and current 403b is about $89082.6 - can we look at getting that to the right funds?


Sounds good. Done and done.
Last edited by pingo on Mon Aug 12, 2013 7:51 pm, edited 1 time in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Mon Aug 12, 2013 7:51 pm

Asset allocation: 80% stocks / 20% bonds
International allocation: 30% of stocks
Translation: US 56 / Int'l 24 / Bond 20 <--Subtract Company Stock from US allocation, then split the rest 4:1 Lg/Ext
Portfolio size: $123,985.76


Annual Contributions*
$17,500 to 403b (no match) <-- 76% of contributions; acc. to above translation, 56% to US / 20% to Bonds.
$ 5,500 to IRA <--24% of contributions; acc to above translation, 24% to VG Total International.
$23,000 Total Contributions
* Extra savings to CDs, high interest savings acct or i-Bonds



Vanguard Taxable (~$3,000.00 or 2%)
02% Vanguard Total International (VGTSX) ER .22 <--Vanguard converts to VTIAX ER 0.16% @ $10k; not a taxable event.

Morgan Stanley Taxable ($26,403.16 or 21%)
21% Large Domestic Stock <--Transfer in-kind to Vanguard after documenting cost-basis/gains/loss information. Tax Loss Harvest when/if you see losses.

Current 403b @ Fidelity ($89,082.6 or 72%) <--Old 401k moves here.
28% Vanguard Institutional Index Fund (VINIX) ER .04 ($34,716.01) <--$11,200/yr or 64% of 403b contributions.
07% Fidelity Spartan Extended Market - Advantage (FSEVX) ER .07 ($8,679) <--$1,575/yr or 9% of 403b contributions. Use VG Ext until transfer.
17% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) ER .18 ($21,077.58)
20% Vanguard Total Bond Market (VBTIX) ER .07 ($24,797.15) <--$4,725/yr or 27% of 403b contributions.

Vanguard Roth (~$5,500 or 4%)
04% Vanguard Total International (VGTSX) ER .22 <--$5,500/yr; Vanguard converts to VTIAX w/ ER 0.16% @ $10k.

All accounts = 99% due to rounding

Weighted ER = 0.07%.

* Company pension account not included.
* Simple, super diversified, extremely low cost. All else being equal, the lowest cost portfolio wins.
* Extra cash for saving goes into CD, high interest savings or Treasury.gov Series i-Bonds for downpayment.
* Transferring $10,000 fund minimum to BrokerageLink Fidelity Ext Mkt Advantage (FSEVX) results in it being more than 7% of portfolio, meaning VINIX will have to be less than 28% for a while. Simply put all new US stock money into VINIX until things balance out.
* Company stock becomes a smaller part of the portfolio because of contribution schedule. When you rebalance each year, look at your US allocation (e.g. 56), subtract Company Stock percentage (e.g. 21) then split the rest 4:1 Lg/Ext Mkt (e.g. 56-21=35 -->28 Lg/7 Ext)

Let me know if you have more questions, corrections, or if I need to explain how I came up with contribution amounts in the 403b.

:beer
Last edited by pingo on Thu Aug 15, 2013 10:48 am, edited 4 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Tue Aug 13, 2013 10:43 pm

Marvelous! Thanks Pingo!

Quick question:

Current 403b @ Fidelity ($89,082.6 or 72%) <--Old 401k moves here.
28% Vanguard Institutional Index Fund (VINIX) 0.04 <--$11200/yr or 64% of 403b contributions.
07% Fidelity Spartan Extended Market - Advantage (FSEVX) 0.07 <--$1575/yr or 9% of 403b contributions. Use VG Ext until transfer.
17% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) 0.18
20% Vanguard Total Bond Market (VBTIX) 0.07 <--$4725/yr or 27% of 403b contributions.


Do you have the allocation for the 17% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) 0.18?

Thanks!
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Tue Aug 13, 2013 11:04 pm

investme wrote:Do you have the allocation for the 17% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) 0.18?


Are you referring to the contribution amount for Spartan Global Ex-US?

After allocating 17% of the portfolio to Spartan Global Ex-US inside the 403b, no new contributions are scheduled because all new contributions for International equities go to Taxable Vanguard Total Bond. As assets wax and wane throughout the portfolio, there may come a need to rebalance either into or out of international equities to maintain that 24% portfolio allocation to International. That rebalancing of international equities will happen inside the 403b so as not to have to do so with the taxable portion that holds international equities.

Or, if you recognize that international is crashing hard, there's nothing wrong with directing new contributions there to try to maintain the right balance without having to sell/buy funds when it's time to rebalance.

Does that make sense? Or did I misunderstand the question?
Last edited by pingo on Tue Aug 13, 2013 11:59 pm, edited 1 time in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Tue Aug 13, 2013 11:40 pm

That makes sense, so only the initial 10k to open for now, thanks!
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Wed Aug 14, 2013 12:10 am

Aah. I did misunderstand. I'll add the specific amounts later, but the answer to your question is to multiply the entire portfolioo ($123, 985) by 17%. That is how much you put into Spartan Global.
Last edited by pingo on Wed Aug 14, 2013 2:12 pm, edited 1 time in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Wed Aug 14, 2013 11:22 am

^ I edited the portfolio suggestion, adding in parenthesis () a dollar amount of each allocation for the 403b.

Since we consider the portfolio as a whole, the percents refer to a percent of the entire portfolio amount, in this case 124k, unless otherwise noted. (For example: "xx% of 403b contributions" is so noted because it does not refer to the whole, but it allows you to set your 403b contributions on autopilot.)

Also, note that even though I included dollar amounts to the penny, it's still an approximation because the portfolio total changes from day to day. And due to rounding, all accounts equal 99%, but what is posted is good enough because it really doesn't have to be soooooooo exact. (Daily market activity will be sure it's things are never at their precise allocation, anyway.) If you find there's some money left in the 403b after you transfer according to the amounts I calculated, you can split the rest according to the broad asset allocation 49/7/24/20 (if that's possible), or you can plunk it all in whichever fund grabs your attention. It's all good!

Let me know if anything is unclear or if I have made errors somewhere. :D
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Wed Aug 14, 2013 6:30 pm

Thanks Pingo! Think I've finally got it:

Current 403b @ Fidelity ($89,082.6 or 72%) <--Old 401k moves here.
28% Vanguard Institutional Index Fund (VINIX) ER .04 ($34,716.01) <--$11200/yr or 64% of 403b contributions.
07% Fidelity Spartan Extended Market - Advantage (FSEVX) ER .07 ($8,679) <--$1575/yr or 9% of 403b contributions. Use VG Ext until transfer.
17% Fidelity Spartan Global Ex-U.S. - Advantage (FSDGX) ER .18 ($21,077.58)
20% Vanguard Total Bond Market (VBTIX) ER .07 ($24,797.15) <--$4725/yr or 27% of 403b contributions.

Vanguard Roth (~$5,500 or 4%)
04% Vanguard Total International (VGTSX) ER .22 <--$5,500/yr; Vanguard converts to VTIAX w/ ER 0.16% @ $10k.


From the percentages in the 403b, that's 73% stock and 27% bonds, but factoring the 4% in the Vanguard Total International (VGTSX) evens it out?

Moving forward, allocate 64% to VINIX, 9% to FSEVX (VG Ext until minimum reached), and 27% to VBTIX, then separately 100% of 5,500 Roth to VGTSX?

Then let the 17% sit in FSDGX for now.

Does that sound right?

Thank you!!
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Wed Aug 14, 2013 7:41 pm

investme wrote:From the percentages in the 403b, that's 73% stock and 27% bonds, but factoring the 4% in the Vanguard Total International (VGTSX) evens it out?


Yep!

More specifically, if we're looking at the 403b allocations in isolation:
39% VINIX
10% FSEVX
24% FSDGX
27% VBTIX

If we're looking at the 403b contributions in isolation, then...

investme wrote:allocate [contributing] 64% to VINIX, 9% to FSEVX (VG Ext until minimum reached), and 27% to VBTIX


...is exactly right. And since...

investme wrote:separately 100% of 5,500 Roth to VGTSX


...there is no need to contribute to FSDGX because a 24% combined allocation to international also means 24% of all contributions go to international, and the VG Roth receives 24% percent of all contributions:

2% International in Taxable
+ 4% International in Roth <--24% of combined contributions go here.
+ 17% International in 403b
23% combined allocation to International Stocks with 24% of combined contributions going to International, as well.

I know we were looking to give you a 24% allocation, but rounding the percents gives us a total of 99%. So you're combined international allocation will be in the vecinity of 23-24%, which is good enough.

When you rebalance each year, you may need to transfer into/out of FSDGX to maintain a total of 23% to 24% international stocks.

Edited to add: If the amount you would rebalance doesn't meet the $1000 transfer minimum, it's probably not that important to rebalance it, so don't worry about it. Also remember that the transfer minimum is probably a total transfer amount minimum. That is, if you have a little to transfer into/from Extended Market and some more to also transfer into/from Fidelity Global Ex-U.S., then you can transfer as long as the total meets the $1000 minimum.
Last edited by pingo on Thu Aug 15, 2013 10:50 am, edited 3 times in total.
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Re: Revised portfolio - seeking advice and options for old p

Postby investme » Wed Aug 14, 2013 8:31 pm

Thank you so so much!! I finally understand and think we are good to go!! :beer
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Re: Revised portfolio - seeking advice and options for old p

Postby pingo » Thu Aug 15, 2013 12:56 am

It has been a pleasure. All the best!

:sharebeer
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