Portfolio Questions

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MKP
Posts: 213
Joined: Sun Jun 26, 2011 7:56 pm

Portfolio Questions

Post by MKP » Sat Mar 16, 2013 12:01 pm

Emergency funds: 1 Yr expenses
Debt: $283K Mortgage 4.125%, Car Loan 1 $20K 1.49%, Car Loan 2 $10K 1.9%
Tax Filing Status: Married Filing Jointly
Tax Rate: 25% Federal, 0% State
State of Residence: FL
Age: 29
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 45-50% of stocks

Current Portfolio Size (401K & Roth): Mid 5 Figures

Current retirement assets

Taxable
0%

His 401k at Fidelity
28% Fidelity S&P 500 Index ( FXSIX) (.04)
7% Vanguard Small Cap Index (VSCIX) (.08)
1% DFA Small Cap Index (DFSTX) (.37)

His Roth IRA at Vanguard
36% Total International Index Admiral (VTIAX) (.16)

Her Roth IRA at Vanguard
15% Intermediate Term Bond Index (VBIIX) (.22)
11% Small Cap Value Index (VISVX) (.35)
2% Short Term Bond Index (VBISX) (.22)

HIS HSA at Healthequity
This isnt counted in the 100% above, roughly $1000 cash.

Contributions

New annual Contributions
$17500 his 401k + ($4100 additional employer match)
$5500 his Roth IRA
$5500 her Roth IRA

Available funds
All Vanguard funds-for the Roths.

Funds available in his 401(k)
Fidelity International Index (FSPNX) (.07)-Does not have small cap or EM
BTC US DEBT T (NA-ticker symbol) (.08)-This is basically total bond market as it has 27% MBS
Vanguard Short-Term Bond Index Fund Signal Shares (VBSSX) (.11)

There are additional funds but they are either blended pool funds (no ticker) or actively managed with high expense rations.

HSA Available Funds
Small Cap Index (DISSX) (.50 expense)
Vanguard Large Cap Index Signal (VLCSX) (.10 expense)

Questions:
1. To accomplish my stock/bond/international objectives what do you think is the most efficient fund placement, and how should I align my contributions going forward? Right now I am quite a bit out of whack on the international because my (weekly) roth contributions are going to VTIAX, whereas nothing is being allocated in the 401K.

2. How would you change the make-up of my current balance to make a more managing these accounts simpler? For my domestic stock allocation, I would like 60% large/40% small, with a small and large value tilt (F&F follower here). I currently do not own VIVAX (Large Cap Value) but would like to pick this fund up in the future. My wife has $3700 remaining contribution for 2012 that we intend to make next month, and then she will be doing weekly contributions like I do. What do you think is the best allocation of the contribution?

3. If something came up and I had to stop contributing large amounts of money to the Roth and the 401K, which would be the best choice to continue funding (my company gives my match as long as I contribute 1%, and I will always contribute at least that much. I mean, for anything above 1%, should I contribute to the Roth or the 401k?

4. I have an HSA medical plan and contribute $100 a year, my employer funds it with $500, leaving $2500 that I could contribute for 2013. Should I contribute to this instead of the Roth or 401K, assuming I cannot max out both Roths, 401K, and HSA? I.e., should I lower the 401K or Roth contributions and contribute more to the HSA? I currently have $1000 in the account, and once you reach $3000 you can invest in mutual funds.

5. Am I doing ok for someone my age (29)? My wife is 28 and we started saving 2 years ago starting out with nothing. Based on a spreadsheet I have been keeping, we are saving about 50% of what we make between cash and retirement contributions.

xram
Posts: 780
Joined: Sat Sep 15, 2012 11:36 am

Re: Portfolio Questions

Post by xram » Sat Mar 16, 2013 8:51 pm

xram wrote:short video introduction to boglehead philosophy
http://www.bogleheads.org/wiki/Video:Bo ... philosophy

further info on tax-efficient fund placement
http://www.bogleheads.org/wiki/Principl ... _Placement

good luck
xram
VTI, VBR, VTWV, SCHH, VXUS, VEA, VWO, VSS, FM, VNQI, VBTLX, VFITX, SCHP, VWITX, IBONDS, EEBONDS, EF(EverBank), UTAH-529

Occupier
Posts: 284
Joined: Wed Feb 01, 2012 10:21 pm

Re: Portfolio Questions

Post by Occupier » Sat Mar 16, 2013 8:57 pm

I think you should max out tax free accounts. You have some really good choices at low cost in the 401. I wish they all were that good. For example having that DFA small cap fund at .37 is almost unheard of. So just keep up the good work. Dave

MKP
Posts: 213
Joined: Sun Jun 26, 2011 7:56 pm

Re: Portfolio Questions

Post by MKP » Sat Mar 16, 2013 9:07 pm

Occupier wrote:I think you should max out tax free accounts. You have some really good choices at low cost in the 401. I wish they all were that good. For example having that DFA small cap fund at .37 is almost unheard of. So just keep up the good work. Dave
This is really what I was leaning toward. Max out the 401K and then fill the Roth's with funds that I cant get access to in the 401K.

Also, should I split my small cap in the 401K between the vanguard index and the dfa fund?

DaveS
Posts: 1308
Joined: Fri Jun 15, 2007 9:42 am
Location: Reno, NV

Re: Portfolio Questions

Post by DaveS » Sun Mar 17, 2013 12:23 am

Yes I would split it. Dave

SVT
Posts: 228
Joined: Mon Oct 13, 2008 8:56 am

Re: Portfolio Questions

Post by SVT » Sun Mar 17, 2013 1:10 am

4. I have an HSA medical plan and contribute $100 a year, my employer funds it with $500, leaving $2500 that I could contribute for 2013. Should I contribute to this instead of the Roth or 401K, assuming I cannot max out both Roths, 401K, and HSA? I.e., should I lower the 401K or Roth contributions and contribute more to the HSA? I currently have $1000 in the account, and once you reach $3000 you can invest in mutual funds.
You should max out the HSA before maxing out the Roths and 401k because of the tax savings, yes. You can contribute up to $6250 for 2012 by April 15th and then $6450 for 2013, assuming you have something else other than single coverage. Making the rest of the contribution for 2012 will put you over $3000 then you can invest if you want to.

Check out the wiki for more information and math on the tax savings, specifically the information under "How to use the Plan": http://www.bogleheads.org/wiki/Health_Savings_Account

MKP
Posts: 213
Joined: Sun Jun 26, 2011 7:56 pm

Re: Portfolio Questions

Post by MKP » Sun Mar 17, 2013 9:17 am

SVT wrote:
4. I have an HSA medical plan and contribute $100 a year, my employer funds it with $500, leaving $2500 that I could contribute for 2013. Should I contribute to this instead of the Roth or 401K, assuming I cannot max out both Roths, 401K, and HSA? I.e., should I lower the 401K or Roth contributions and contribute more to the HSA? I currently have $1000 in the account, and once you reach $3000 you can invest in mutual funds.
You should max out the HSA before maxing out the Roths and 401k because of the tax savings, yes. You can contribute up to $6250 for 2012 by April 15th and then $6450 for 2013, assuming you have something else other than single coverage. Making the rest of the contribution for 2012 will put you over $3000 then you can invest if you want to.

Check out the wiki for more information and math on the tax savings, specifically the information under "How to use the Plan": http://www.bogleheads.org/wiki/Health_Savings_Account
Would your analysis change at all if I were to be a resident in the state of New Jersey? My company is headquartered there and I think that in the next 1-3 years they may relocate me.

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