Portfolio Review

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Portfolio Review

Post by mmmarlowe » Mon May 13, 2013 2:09 pm

First, thanks in advance for any help that can be provided.
Emergency Funds: About 4 months.
Debt: 240k Mortgage at 3.75 APR (About 7 ½ years remaining), No other debt.
Tax Filing Status: Married Filing Jointly
Tax Rate: Fed 33%, State 9.3%
State of Residence: CA
Age: 54, Spouse 52
Desired Asset Allocation: 70% Stock, 30% Bond
Desired International Allocation: 30% of Stocks
Current Total Portfolio Allocation: high six figures…approaching 2 commas.
Taxable Accounts: None
His 401k (American- Fund-Family) Company Match up to Approx. 10K
Growth Fund of America (RGAFX) 23% [E.R. 0.39%]
New Perspective Fund (RNPFX) 15% [E.R. 0.50%]
New World Fund (RNWFX) 10% [E.R. 0.72%]
Smallcap World Fund (RSLFX) 11% [E.R. 0.78%]
Washington Mutual Investors Fund (RWMFX) 16% [E.R. 0.35]
Her 403B (through Fidelity). No Company Match
Fidelity Balanced (FBALX) 12% [E.R. 0.60%]
Fidelity Freedom 2020 (FFFDX) 13% [E.R 0.64%]
Maxing out the 401k and 403B including Catch-up contributions. $46,000 total. Will continue to max-out contributions to retirement.
ER contributions about $10K to 401k.
Planning to contribute $13k for Backdoor IRA’s.
Available Investments
Okay, my spouse’s 403B is through a School District and offers Fidelity. Inasmuch as my spouse says (and in a not-so-friendly tone) she has no interest in changing her present investments, I’m not exploring the hundreds of choices that she has available. Given my past history of making some horrendous financial decisions, I’m quite willing to acquiesce to her decision.
My 401K Options
--AMCAP Fund (0.43%) RAFFX
-- EuroPacific Growth Fund (0.55%) RERFX
-- The Growth Fund of America (0.39 ) RGAFX
--New Perspective Fund (0.50) RNPFX
--New World Fund (0.72) RNWFX
-- SMALLCAP World Fund (0.78) RSLFX
--American Mutual Fund (0.37) RMFFX
-- Washington Mutual Fund (0.35) RWMFX
-- Capital Income Builder (0.36) RIRFX
-- The Bond Fund of America (0.31) RBFFX
-- -Term Bond Fund of America (1.03) RAMCX
-- American Mutual Money Market Fund (0.38)
-- American Funds Money Market Fund (0.52) RACXX
-- American Funds 2040 Target Date Retirement Fund (.49) REGTX
-- American Funds 2035 Target Date Retirement Fund (.47) REFTX
-- American Funds 2030 Target Date Retirement Fund (.47) REETX
-- American Funds 2025 Target Date Retirement Fund (.46) REDTX
-- American Funds 2020 Target Date Retirement Fund (.44) RECTX
-- American Funds 2015 Target Date Retirement Fund (.41) REJTX


I’m about 10 years out from retirement. I said to myself, that I would review my portfolio when I got to this time. I’ve had the same investment choices, for better and worse, since about Dec of 2002. I believe that I have a fair amount of flexibility. Much of the time, I enjoy my work and I may wish to continue to work past age 65 (either full-time or part time) and I think my employer would be very open to either option. So I might be bit more aggressive than others. But right now, I am probably more in the position of being stupidly aggressive and lacking bond funds.

So, I would appreciate reviews of my portfolio and any suggestions for revisions for the next 5-10 years to reduce the present level of risk. Thank you.

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Re: Portfolio Review

Post by ieee488 » Mon May 13, 2013 4:08 pm

The Fidelity Spartan Funds are the ones with the lowest expense ratios closer to the 0.2% vs the 0.6% in the Fidelity your wife currently holds. I would use the Spartan funds instead.

The expense ratios for your 401K aren't that high, but I am not sure which ones to pick which best approximate a low-cost index fund.
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Re: Portfolio Review

Post by DaveS » Mon May 13, 2013 10:25 pm

There is only one low cost bond fund that you list. I don't know anything about it When you have an asset class that is now only yielding 2%, lowering costs is even more important than usual. Buy it, or get some of the 2015 or 2020 target fund - which is a sneaky way of buying mostly bonds.

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Re: Portfolio Review

Post by Laura » Mon May 13, 2013 10:36 pm

I would be tempted to just select one fund for your account. Pick the Target Date Retirement fund that most closely matches your target asset allocation (ignore the date on the fund). Your wife almost has a one fund portfolio but she just selected two funds that probably overlap to some extent. In your case you can use just one fund. American funds will then do the work of maintaining your asset allocation. You will have a good amount of bonds.

The views presented are my own and not necessarily those of the Department of State or the U.S. Government.

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