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Thank you... I had mistakenly said 'estate planning' but I was looking for financial advice for 'legacy planning'. So more in the financial realm than legal realm. Apologies for the confusion

Hello I have been working with Vanguard PAS for some time now and this year, the advisor recommended that I seriously consider legacy planning to make sure there is thought behind the legacy we want to leave behind behind for our 2 kids. My wife and I are in our mid- 40s and feel like we are going to be ok in our retirement years. Looking for some thoughts on how we should approach legacy planning, what options we should consider, how do we think about tax situations where what we leave behind doesn't cause tax burden on the kids, what about whole life insurance. Thanks in advance EDITED: Initially I had incorrectly referred to 'estate planning' which is more in the legal realm. I updated to say I need advice on 'Legacy planning', looking f...

billfromct wrote: ↑Sun Dec 25, 2022 1:54 pm The Vanguard Target Retirement Funds moves to a 50% stock (60% domestic/40% international)/50% fixed income allocation at the target year. Then it moves to 30% stock/70% fixed income allocation 7 years after the target year.

What do people do in these cases? so my target retirement fund is 2040 and has 80/20 allocation today. In 2040, I will be only 65... so I wonder if I move to 2045 TRF, when I will be 70 yo and I believe reqd dist start at age 72.

thank you again
-sam

Interesting if TGF are considered conservative... I believe 2040 fund is still 80/20 equity/FI split... but yes, let's see what others have to say.

We have VG target date funds available and that's where I have my 401k $ are in the employer plan. The most appropriate target fund option for me is 2040 and that's where I am invested. Rest of my portfolio is managed by VG through their PAS (Personal Advisory Service). I believe VG PAS also invests based on when I will need the money... so again, its close to 2040 (when I reach my retirement age).

I am contemplating whether I should change the target fund to 2045 or even 2050 if I dont end up needing the money at my retirement... or if I ask VG PAS to change allocation to reflect distribution needs beyond 2045. I guess I can't change both places- it's either/or?

Appreciate any advice/ suggestions you may have.

- sam

Thank you both for confirming A is correct.

This, then also means that you have 6.5k on top of all this to contribute towards retirement through Traditional IRA contribution and then ROTH conversion. Correct?

Hello- I have 2 questions, hope someone can help. When you look at the total 2023 contribution limit of 66k, and subtract pre-tax 401k contribution of 22.5k and employee match of X... is the leftover (A= 66k-22.5k-X) available for mega backdoor Roth OR are you supposed to subtract regular 6.5k IRA contribution (if made, and associated backdoor conversion) from this number to get to leftover (B= 66k-22.5k-X-6.5k) available for mega backdoor Roth? So, is A or B correct? I usually contribute to traditional IRA and then do backdoor ROTH conversion right away since I am above the income threshold limit for ROTH contribution. Now, when I do this, I clear out my traditional IRA account- i.e. convert every single penny to ROTH. Followed by that, I ...

Hello again- I added this in the original post? I added almost all the information you asked for in the original post + also clarified our questions in the original post.

We are maxing our on 401k, so if its 19.5k then we are contributing that much for both of us.
SIMPLE IRA option is no longer available for us-- we have this from the past when my wife used to run her own small business from home. Now she has a salaried job.
I'd say we have 36k additional available for the year, in addition to the cash sitting in money market fund.

Thank you for reading and commenting. I have added most of the information you asked for in the original post- please revisit the original post. Need to fine tune the portfolio details after looking at VG account which is down for some reason.

Nonetheless, this real estate investing is something my wife is really wanting us to consider, given low interest rates (getting 3.75% for 15 years on investment property). She thinks with leverage and with a renter participating in building equity, we'd be better off in 5-10 yrs vs. investing in our desired allocation. Additionally, we are saving 3k a month after paying for 401k, IRA, 529. So, want to do something about that too.

Emergency funds: Have this covered Debt: Mortgage of about 120k at 3.2% 15 yrs, 12 yrs left Tax Filing Status: Married Filing Jointly, with 2 children, elementary school Tax Rate:24% Federal, 4% State State of Residence: Indiana Age: 44 Desired Asset allocation: 80% stocks / 20% bonds Desired International allocation: 30% of stocks Size of the portfolio: High six figures Current retirement assets Taxable 20% cash (for investing – does not include emergency funds, after IRA contribution, see below) 16% VG Bond fund name 64% VG US Equity and International Equity His 401k Vanguard 2040 retirement fund Company match? 6% His Roth IRA at Vanguard Not eligible His Rollover IRA at Vanguard 2% VG US Equity Contributions New annual Contributions $19k...

This is great information- I really appreciate it.

Thank you- yes I am leaning towards traditional solo 401k, will stay away from roth. So just so that my understanding is right:

- With expected 45K income for my wife, we can max out 18K employee deferral in solo 401K
- Additional 25% of her net income (gross less expenses), can be contributed as the employer (did not understand "net business profit - 1/2"?)
- On top of the above, we can still do Roth IRA contribution of $5500 for her

So not having access to admiral shares, results in higher expense ratio at VG. So do you recommend we do not open solo 401k with VG but instead open with Fidelity? What are the pros and cons of this?

Lastly, what is "Fido"?

Thanks again.

Hi All-
My first time asking a question here.

My wife is a freelancer and she expects to make about 45K this year with low to no overhead.
Last year she made only about 13K.
We file our taxes MFJ.
Last year, our AGI was 136K
We both contributed to the full amount towards Roth IRAs.

Now, we are contemplating if we should open solo 401k or just do SEP IRA.
I am leaning towards solo 401k since we can contribute 18K employee deferral and 25% of net freelance income.
But then I also read that Roth solo 401K is also an option.

I am confused and would appreciate any advice here as to what is the best option for us.

Thank you