Taxable Portfolio help

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

Taxable Portfolio help

Postby brobinson2000 » Wed May 22, 2013 11:02 am

I have about $150k cash that I would like to invest in a taxable portfolio. Was looking at Paul Merriman's Vanguard Tax Managed Portfolio. I'm in the 15% tax bracket. Do you think that portfolio would be appropriate for me?
Here is a little more detail of my current financial picture:

Emergency Funds: 12 months
Debt: None
Tax Filing Status: Married Filing Jointly
Tax Rate: 15% Federal, 0% State
State of Residence: Nevada
Age: 50
Desired Asset Allocation: 60% Stocks, 40% Bonds
Desired International Allocation: 30%??

Current Retirement Assets
Taxable: 30% of entire portfolio
100% cash

457(b) Deferred Comp 50% of entire portfolio
34% Vanguard Total Bond Market Index Fund
18% Vanguard Institutional Index Fund
17% Fidelity Contrafund
17% Vanguard Extended Markets Index Fund
14% Vanguard Developed Markets Index Fund Admiral Shares

His Roth IRA 8% of Total Portfolio
100% FRESX Fidelity Real Estate Investment

Her Roth 12% of Total Portfolio
100% FRESX Fidelity Real Estate Investment

Total Portfolio approximately 500K

I am retired, have a pension with COLA, and don't need additional income...but I would like to be able to take income for 1-time purchases (New Vehicles, Cruises, Home, etc.) in the future. I have no earned income, so I can't contribute any more to IRAs or 401K/457(b), etc.
Last edited by brobinson2000 on Wed May 22, 2013 2:23 pm, edited 2 times in total.
brobinson2000
 
Posts: 9
Joined: Wed May 22, 2013 10:58 am

Re: Taxable Portfolio help

Postby BolderBoy » Wed May 22, 2013 12:20 pm

brobinson2000 wrote:I have about $150k cash that I would like to invest in a taxable portfolio. Was looking at Paul Merriman's Vanguard Tax Managed Portfolio. I'm in the 15% tax bracket. Do you think that portfolio would be appropriate for me?

I don't know who Paul Merriman is, but truly you haven't given enough info for folks to make suggestions. Look at the top of the headers for this subforum and you'll see a posting giving the suggested way to post a question like this.

Welcome!
BolderBoy
 
Posts: 945
Joined: Wed Apr 07, 2010 1:16 pm
Location: Colorado

Re: Taxable Portfolio help

Postby Grt2bOutdoors » Wed May 22, 2013 12:28 pm

BolderBoy wrote:
brobinson2000 wrote:I have about $150k cash that I would like to invest in a taxable portfolio. Was looking at Paul Merriman's Vanguard Tax Managed Portfolio. I'm in the 15% tax bracket. Do you think that portfolio would be appropriate for me?

I don't know who Paul Merriman is, but truly you haven't given enough info for folks to make suggestions. Look at the top of the headers for this subforum and you'll see a posting giving the suggested way to post a question like this.

Welcome!


He's a retired financial advisor - pretty well thought of here. Google Paul Merriman. He writes for CBS Retirement Planners or Marketwatch.
"Luck is not a strategy" Asking Portfolio Questions
Grt2bOutdoors
 
Posts: 10452
Joined: Thu Apr 05, 2007 9:20 pm
Location: New York

Re: Taxable Portfolio help

Postby BolderBoy » Wed May 22, 2013 12:37 pm

Grt2bOutdoors wrote:
BolderBoy wrote:
brobinson2000 wrote:I have about $150k cash that I would like to invest in a taxable portfolio. Was looking at Paul Merriman's Vanguard Tax Managed Portfolio. I'm in the 15% tax bracket. Do you think that portfolio would be appropriate for me?

I don't know who Paul Merriman is, but truly you haven't given enough info for folks to make suggestions. Look at the top of the headers for this subforum and you'll see a posting giving the suggested way to post a question like this.

Welcome!


He's a retired financial advisor - pretty well thought of here. Google Paul Merriman. He writes for CBS Retirement Planners or Marketwatch.

He has a Wikipedia entry, too. Thanks.
BolderBoy
 
Posts: 945
Joined: Wed Apr 07, 2010 1:16 pm
Location: Colorado

Re: Taxable Portfolio help

Postby Grt2bOutdoors » Wed May 22, 2013 12:48 pm

BolderBoy wrote:
Grt2bOutdoors wrote:
BolderBoy wrote:
brobinson2000 wrote:I have about $150k cash that I would like to invest in a taxable portfolio. Was looking at Paul Merriman's Vanguard Tax Managed Portfolio. I'm in the 15% tax bracket. Do you think that portfolio would be appropriate for me?

I don't know who Paul Merriman is, but truly you haven't given enough info for folks to make suggestions. Look at the top of the headers for this subforum and you'll see a posting giving the suggested way to post a question like this.

Welcome!


He's a retired financial advisor - pretty well thought of here. Google Paul Merriman. He writes for CBS Retirement Planners or Marketwatch.

He has a Wikipedia entry, too. Thanks.


If you go on his website, you can download 3 of his pdf books for free, if you are willing to cough up your email address to him.
His Vanguard plan is similar to a slice and dice approach - I think it's a bit much for me, I like to keep as few slices as possible. My retirement plan is complicated enough due to lack of total market indexes.
"Luck is not a strategy" Asking Portfolio Questions
Grt2bOutdoors
 
Posts: 10452
Joined: Thu Apr 05, 2007 9:20 pm
Location: New York

Re: Taxable Portfolio help

Postby telemark » Wed May 22, 2013 1:19 pm

For reference, that portfolio is currently described at

http://paulmerriman.com/pauls-mutual-fund-and-etf-recommendations/

I opened the aggressive tax-managed version a few years ago, have about $60K in it now. It's done nicely since then, but if I had it to do over I'd probably just chose Total Stock Market (VTSAX) and Total International (VTIAX) instead. The expense ratios are lower, rebalancing is automatic, and they're probably more tax efficient.
User avatar
telemark
 
Posts: 967
Joined: Sat Aug 11, 2012 7:35 am

Re: Taxable Portfolio help

Postby WHL » Wed May 22, 2013 1:22 pm

Extremely hard to post advise without the prerequisite information requested in the sticky topic...

Are all of your pre-tax sources being maxed out? Roth IRA? Etc...
WHL
 
Posts: 645
Joined: Mon Dec 10, 2012 3:22 pm

Re: Taxable Portfolio help

Postby connya » Wed May 22, 2013 1:33 pm

Is this the one you're looking at?

http://paulmerriman.com/pauls-mutual-fu ... endations/

This is not just a tax-managed portfolio - it also has a very strong small and value tilt in both US and international stocks (which is strange because value tends to be LESS tax efficient). I would stay away unless you understand what this means and are willing to take the additional risk of a small value tilt and are also willing to keep them for the long term.

A better resource for you might be this wiki page http://www.bogleheads.org/wiki/Tax-mana ... comparison to decide if specific tax-managed Vanguard funds would actually benefit you in your bracket.

As for the bond funds, blindly splitting bonds between three different funds (one of which is not even tax-exempt) is not ideal. For more specific recommendations you will have to provide more information as other posters have said.
connya
 
Posts: 132
Joined: Tue Mar 05, 2013 5:01 pm

Re: Taxable Portfolio help

Postby brobinson2000 » Wed May 22, 2013 2:25 pm

It seems that maybe I should reallocate my 457(b) accounts to more bonds and other less tax efficient funds...This will allow me to put more of the non-qualified (taxable) money into Stock Index Funds...Does this make sense?
brobinson2000
 
Posts: 9
Joined: Wed May 22, 2013 10:58 am

Re: Taxable Portfolio help

Postby grabiner » Wed May 22, 2013 8:52 pm

brobinson2000 wrote:It seems that maybe I should reallocate my 457(b) accounts to more bonds and other less tax efficient funds...This will allow me to put more of the non-qualified (taxable) money into Stock Index Funds...Does this make sense?


Yes, it makes a lot of sense. You have only one retirement portfolio, even though it is split across several accounts, so you should place investments where they have the lowest costs. This includes tax costs as well as other costs; you are saving a bit by using Institutional Index in your 457(b) at a lower cost than the equivalent 500 Index in one of your other accounts.

Whether you can implement the value tilt depends on the 457(b) options; please post them. If you don't have a value fund in your 457(b), you will either have to hold value funds in your Roth IRAs, or else hold them in taxable and pay a larger tax bill.
David Grabiner
User avatar
grabiner
Advisory Board
 
Posts: 13381
Joined: Wed Feb 21, 2007 12:58 am
Location: Columbia, MD

Re: Taxable Portfolio help

Postby brobinson2000 » Thu May 23, 2013 9:43 am

My available funds in the 457(b) include:

STABILITY OF PRINCIPAL
1318 ING Stable Value Fund 75
BONDS
0799 Vanguard Total Bnd Mrkt Ind F Inst
ASSET ALLOCATION
0791 Vanguard Trgt Retire 2015 Fnd Inv
0793 Vanguard Trgt Retire 2035 Fnd Inv
0794 Vanguard Trgt Retire 2045 Fnd Inv
0795 Vanguard Trgt Retire Income Fnd Inv
0926 Vanguard Trgt Retire 2025 Fnd Inv
BALANCED
1257 ING TRowePrice Captl Apprec Pt Inst
LARGE CAP VALUE
0566 Vanguard Instit Index Fnd Inst
1205 AllianzGI NFJ Dividend Value Fd Inst
2228 Parnassus Equity Income Fund Inv
LARGE CAP GROWTH
0487 American Funds Growth Fnd R3
0524 Fidelity Contrafund
SMALL/MID/SPECIALTY
0920 Baron Growth Fund Ret
1209 Columbia Acorn Fund A
1312 Keeley Small Cap Value Fund A
1773 Lord Abbett Val Opportunities Fnd I
3772 Hartford MidCap HLS Fund IB
7499 Vanguard Extend Mrkt Index Fnd Inst
GLOBAL/INTERNATIONAL
0735 Dodge & Cox International Stock Fund
2029 American Funds CapWld G&I R3
3152 Vanguard Developed Mkts Indx Fd Adm
brobinson2000
 
Posts: 9
Joined: Wed May 22, 2013 10:58 am

Help with my portfolio

Postby brobinson2000 » Thu May 23, 2013 9:55 am

This is a repost with additional information, and corrected numbers, so please forgive me if you've already replied to the earlier post.

Emergency Funds: 12 months
Debt: None
Tax Filing Status: Married Filing Jointly
Tax Rate: 15% Federal, 0% State
State of Residence: Nevada
Age: 50
Desired Asset Allocation: 60% Stocks, 40% Bonds
Desired International Allocation: 30%??

Current Retirement Assets
Taxable: 33% of entire portfolio
100% cash

457(b) Deferred Comp 56% of entire portfolio
34% Vanguard Total Bond Market Index Fund
18% Vanguard Institutional Index Fund
17% Fidelity Contrafund
17% Vanguard Extended Markets Index Fund
14% Vanguard Developed Markets Index Fund Admiral Shares

His Roth IRA 4% of Total Portfolio
100% FRESX Fidelity Real Estate Investment

Her Roth 7% of Total Portfolio
100% FRESX Fidelity Real Estate Investment

Total Portfolio approximately 450K (not including Emergency Fund)

Available funds in my current 457(b) include:

STABILITY OF PRINCIPAL
1318 ING Stable Value Fund 75
BONDS
0799 Vanguard Total Bnd Mrkt Ind F Inst
ASSET ALLOCATION
0791 Vanguard Trgt Retire 2015 Fnd Inv
0793 Vanguard Trgt Retire 2035 Fnd Inv
0794 Vanguard Trgt Retire 2045 Fnd Inv
0795 Vanguard Trgt Retire Income Fnd Inv
0926 Vanguard Trgt Retire 2025 Fnd Inv
BALANCED
1257 ING TRowePrice Captl Apprec Pt Inst
LARGE CAP VALUE
0566 Vanguard Instit Index Fnd Inst
1205 AllianzGI NFJ Dividend Value Fd Inst
2228 Parnassus Equity Income Fund Inv
LARGE CAP GROWTH
0487 American Funds Growth Fnd R3
0524 Fidelity Contrafund
SMALL/MID/SPECIALTY
0920 Baron Growth Fund Ret
1209 Columbia Acorn Fund A
1312 Keeley Small Cap Value Fund A
1773 Lord Abbett Val Opportunities Fnd I
3772 Hartford MidCap HLS Fund IB
7499 Vanguard Extend Mrkt Index Fnd Inst
GLOBAL/INTERNATIONAL
0735 Dodge & Cox International Stock Fund
2029 American Funds CapWld G&I R3
3152 Vanguard Developed Mkts Indx Fd Adm

I am retired, have a pension with COLA, and don't need additional monthly income...but I would like to be able to take distributions for 1-time purchases (New Vehicles, Cruises, Home, etc.) in the future. I have no earned income, so I can't contribute any more to IRAs or 401K/457(b), etc.

I need help putting together a portfolio in my
existing 457(b) account ($250K)
Roth IRA ($50K)
taxable account (Vanguard Funds or ETFs, etc.) ($150K)

Any opinions, ideas, or criticism is welcome!
brobinson2000
 
Posts: 9
Joined: Wed May 22, 2013 10:58 am

Re: Taxable Portfolio help

Postby LadyGeek » Thu May 23, 2013 8:02 pm

^^^ I merged the above post into the OP's original thread.

Welcome! There's no need to start a new thread. Keeping all of the information in one spot allows us to help you better.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
LadyGeek
Site Admin
 
Posts: 19669
Joined: Sat Dec 20, 2008 6:34 pm
Location: Philadelphia

Re: Taxable Portfolio help

Postby brobinson2000 » Sat May 25, 2013 11:09 am

Does anyone have any ideas?? Do I need to provide any additional info?
brobinson2000
 
Posts: 9
Joined: Wed May 22, 2013 10:58 am


Return to Investing - Help with Personal Investments

Who is online

Users browsing this forum: Bing [Bot], Chorty, jared, Yahoo [Bot] and 30 guests