Emergency Fund: Yes

Debt: 30yr fixed mortgage ($350k) 3.5%; 4 yrs left on auto loan ($18k) 2.5%

Tax Filing Status: Married filing jointly

Tax Rate: 25%/0%

State of Residence: Washington

Ages: 37/37

Desired Asset Allocation: 65% equity/35% bonds

Desired Int'l Equity Allocation: 33% of equity

Current portfolio: mid six-figures

**Current Retirement Assets**

Taxable

12% Oakmark Equity & Income OAKBX(.77%) (left over from before I understood indexing--have not contributed for 8 years to this fund, but I'm thinking that the capital gains owed when selling would outweigh the benefits of liquidating this and investing in an index fund. Willing to challenge this assumption, however).

.5% Vanguard 500 Index VFINX (.17%)

His 401(k)

8% Vanguard 500 Index Signal VIFSX (.05%) (no company match)

His Roth IRA at Vanguard

8% Vanguard Total Int'l Stock Index Admiral VTIAX (.18%)

2.5% Vanguard S&P 500 Index Admiral VFIAX (.05%)

His Rollover IRA at Vanguard

8% Vanguard Total Bond Market Index Admiral VBTLX (.10%)

Her 401(k)

24% Schwab S&P 500 Index SWPPX (.09%) (3% company match)

Her Roth IRA at Vanguard

6.5% Vanguard Total Int'l Stock Index Admiral VTIAX (.18%)

2.5% Vanguard S&P 500 Index Admiral VFIAX (.05%)

Her Rollover IRA at Vanguard

28% Vanguard Total Bond Market Index Admiral VBTLX (.10%)

**New Annual Contributions**:

$17,500 his 401(k) (no match): currently to the S&P 500 index fund, but see question

$17,500 her 401(k) (3% match): currently to the S&P 500 index fund, but see question

$5500 his Roth IRA split between VTIAX Vanguard Total Int'l Fund and bond index fund

$5500 her Roth IRA to VTIAX Vanguard Total Int'l Fund

$6000 taxable...presumably to a Vanguard Bond Index Fund

**Available Funds in 401(k):**

His:

PIMCO Low Duration Admin PLDAX (.71%)

PIMCO Total Return Admin PTRAX (.71%)

JP Morgan Hi Yld Bond Select OHYFX(.86%)

Dodge & Cox Stock DODGX (.52%)

Vanguard 500 Index Signal VIFSX(.05%)

Fidelity Contrafund FCNTX (.81%)

Vanguard Growth Index Signal VIGSX(.10%)

Perkins Mid Cap Value T JMCVX (1%)

Principal Mid Cap Blend R5 PMBPX (.89%)

Columbia Acorn Z ACRNX (.77%)

Vanguard Mid Cap Growth Index VMGIX (.24%)

Victory Small Company Opp I SSGSX (1.06%)

Royce Low Priced Stock Inst'l RLPIX (1.19%)

BMO Sm Cap Growth Y MRSCX (1.44%)

Dodge & Cox Int'l Stock DODFX (.64%)

American Funds Euro Pacific R5 RERFX (.55%)

Artisan Int'l Inv ARTIX (1.22%)

Oppenheimer Dev. Markets Y ODVYX (1%)

T Rowe Price Retirement Inc TRRIX (.56%)

T Rowe Price Retirement 2005 TRRFX (.58%)

T Rowe Price Retirement 2010 TRRAX (.61%)

T Rowe Price Retirement 2015 TRRGX (.65%)

T Rowe Price Retirement 2020 TRRBX (.69%)

T Rowe Price Retirement 2025 TRRHX (.72%)

T Rowe Price Retirement 2030 TRRCX (.74%)

T Rowe Price Retirement 2035 TRRJX (.76%)

T Rowe Price Retirement 2040 TRRDX (.76%)

T Rowe Price Retirement 2045 TRRKX (.76%)

T Rowe Price Retirement 2050 TRRMX (.76%)

T Rowe Price Retirement 2055 TRRNX (.76%)

PIMCO All Asset Institution PAAIX (.90%)

Vanguard Star Inv VGSTX (.34%)

Invesco Real Estate Y IARYX (1.05%)

Black Rock Sci Tech Opp BGSIX (1.4%)

Hers:

Schwab S&P 500 Index SWPPX (.10%)

Harbor Capital Appreciation Inst'l HACAX (.68%)

American Beacon Large Cap Value AAGPX (.59%)

Royce Low Priced Stock Inst'l RLPIX (1.19%)

Vanguard Small Cap Growth Index VISGX (.24%)

Allianz NFJ Small Cap Value PCVAX (.87%)

Dodge & Cox Int'l Stock DODFX (.64%)

William Blair Int'l Growth BIGIX (1.15%)

PIMCO Commodity Real Ret Strat Inst'l PCRIX (.90%)

Virtus Real Estate Securities PHRAX (1.21%)

Vanguard Wellington Adm VWENX (.19%)

PIMCO Total Return Inst'l PTTRX (.46%)

Loomis Sayles Bond Inst'l LSBDX (.63%)

Wells Fargo Stable Return DSVG1 (.49%)

**Questions**

1. Aside from the domestic stock index funds offered in each of our respective 401(k) plans, neither offers any other indexing option. I'm concerned that if we were to maximize each year's 401(k) contributions, we will soon have a very aggressive portfolio overweighted in domestic stock. I would love feedback on options we might have. For example, do we (a) choose a non-index fund from among our 401(k) options? (b) put less in 401(k) plans and more in taxable accounts? (c) tolerate being out of balance until either better options become available in our 401(k) plans or one of us changes jobs and we roll the plan into an IRA--neither of which seems likely any time soon? (d) liquidate our taxable Oakmark fund, take the long-term capital gain hit and put that all in bonds/int'l stock funds? (e) keep a roughly 65/35 ratio of debt/equity but keep it tilted heavily toward domestic stock instead of international stock? (this is the option I'm leaning toward now, as we could put 401(k) contributions all into the domestic stock index funds, put Roth IRA contributions and some taxable amount into a bond fund, and then as we can (hopefully) afford to increase our taxable contributions going forward, we can contribute to international funds).

For a little while it looks like we'll be able to reallocate a bit by shifting some from the S&P 500 funds in our Roth IRAs to international funds, but it won't be long until we'll have moved all of that.

Thank you.