Student Loans paid off - now I want to focus on investing

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maxim81
Posts: 47
Joined: Sat Apr 19, 2008 7:03 pm

Student Loans paid off - now I want to focus on investing

Post by maxim81 » Thu Feb 13, 2014 4:08 pm

Hi all,

I paid off all our student loans (over $250K, woohoo) and I want to focus solely on retirement planning and investing.

Emergency funds: $50,000 cash
Debt: $220,000 mortgage @ 3.25%
Tax Filing Status: Married Filling Jointly
Tax Rate: 28% Federal, 7% State
State of Residence: NJ
Age: 32
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 30% of stocks

Current Portfolio size: ~$260,000

Current retirement assets

Taxable

$0

His 401k

26% VIFSX Vanguard 500 Index (.05)
8% VIBSX Vanguard Interm Bond In Signal (.10)
7% VGRSX Vanguard Reit Signal (.10)
8% VSISX Vanguard Small Cap Indx Signal (.10)
25% VTSGX Vanguard Total Intl Stock Ind (.16)

Company match - 100% upto 4%

His Traditional IRA at Vanguard

6% VTSAX Vanguard Total Stock Market Index Fund Admiral Shares (.05)

His Roth IRA at Vanguard

8% VTSAX Vanguard Total Stock Market Index Fund Admiral Shares (.05)

Her 403b at MetLife

(ex-employer; will be rolled over to Vanguard IRA after I receive feedback)

6% PARLX T. Rowe Price Retirement 2045 Adv (1.03)
3% TPINX Templeton Global Bond A (.88)
3% EQINTL Vanguard International Value Fund (.41)


Her 401K (per diem job - only works her 1 or 2 days a month)

0%

We have not started contributing

Company match - 100% to 4%


Her 403b (part time job- 10 days a month)


1% VTIVX Vanguard Target Retirement 2045 (.18)

Should I just invest 4% in Vanguard 2045?

Company match - 100% to 4%

Utah 529

Only $100 so far. I chose the "Customized Age-Based" option:

.01 Vanguard Total Bond Market Index (50% of my contribution goes here)
.01 Vanguard Total Stock Market Index (35% of my contribution goes here)
.005 Vanguard Total Intl Stock Index (15% of my contribution goes here)


Total = 100%

Contributions

New annual Contributions
$17,500 his 401k (100% match upto 4%, i will max out this 401k)
$ 3700 her 403b (part time job, 100% match upto 4%)
$ $715 her 401k (per diem job, 100% match upto 45)

$5,500 his IRA/Roth IRA
$5,500 her IRA/Roth IRA
$6000 taxable (I want to put at least $500/per month)
$1200 (at least $100/month to Utah 529)

Available funds

Funds available in his 401(k)


Investment    Ratio

American Funds EuroPacific Growth Fund (R6) 0.005 RERGX
Eagle Small Cap Growth Fund (R6) 0.0069 HSRUX
Fidelity Contrafund 0.0074 FCNTX
Goldman Sachs Small Cap Value Fund (I) 0.0098 GSSIX
Meridian Growth Fund (Leg) 0.0087 MERDX
PIMCO High Yield Fund (I) 0.0055 PHIYX
Vanguard 500 Index Fund (Sig) 0.0005  VIFSX
Vanguard Intermed.-Term Bond Index Fund (Sig) 0.001 VIBSX
Vanguard Mid-Cap Index Fund (Sig) 0.001 VMISX
Vanguard REIT Index Fund (Sig) 0.001 VGRSX
Vanguard Selected Value Fund (Inv) 0.0038 VASVX
Vanguard Small-Cap Index Fund (Sig) 0.001 VSISX
Vanguard Target Retirement 2015 Fund (Inv) 0.0016 VTXVX
Vanguard Target Retirement 2025 Fund (Inv) 0.0017 VTTVX
Vanguard Target Retirement 2035 Fund (Inv) 0.0018 VTTHX
Vanguard Target Retirement 2045 Fund (Inv) 0.0018 VTIVX
Vanguard Target Retirement 2055 Fund (Inv) 0.0018 VFFVX
Vanguard Target Retirement Income Fund (Inv) 0.0016 VTINX
Vanguard Total Intl. Stock Index Fund (Sig) 0.0016 VTSGX
Vanguard Wellington Fund (Adm) 0.0017 VWENX
Vanguard Windsor II Fund (Adm) 0.0027 VWNAX



Funds available in her 403b (part time job, not per diem)

AM Bcn Small Cap Value Inst Class   0.92
Ticker: AVFIX 

AM Fds Europacific Growth Fund Cl R 6   0.5
Ticker: RERGX 

Calvert Equity I   0.68
Ticker: CEYIX 

Conestoga Small Cap  1.22
Ticker: CCASX 

Dmnd Hll Large Cap Fund Y   0.66
Ticker: DHLYX 

Eagle Small Cap Growth R6   0.69
Ticker: HSRUX 

Pimco Total Return Inst   0.46
Ticker: PTTRX 

Royce Low Priced Stock Instl   1.19
Ticker: RLPIX 

Vngrd Growth Index Inst   0.08
Ticker: VIGIX

Vngrd Mid Cap Index I   0.08
Ticker: VMCIX

Vngrd Target Retirement 2055   0.18
Ticker: VFFVX 

Vngrd Target Retirement 2060 Investor   0.18
Ticker: VTTSX 

Vnguard Index Trust Small Cap Idx Instl   0.08
Ticker: VSCIX 

Vnguard Institutional Index   0.04
Ticker: VINIX 

Vnguard Internm Term Bond Index Signal   0.1
Ticker: VIBSX

Vnguard Prime Money Market Inst   0.1
Ticker: VMRXX 

Vnguard Target Retirement Income   0.16
Ticker: VTINX

Vnguard Target Retirement 2010 Fund   0.16
Ticker: VTENX 

Vnguard Target Retirement 2015   0.16
Ticker: VTXVX 

Vnguard Target Retirement 2020 Fund   0.16
Ticker: VTWNX

Vnguard Target Retirement 2025   0.17
Ticker: VTTVX 

Vnguard Target Retirement 2030 Fund   0.17
Ticker: VTHRX 

Vnguard Target Retirement 2035   0.18
Ticker: VTTHX 

Vnguard Target Retirement 2040 Fund   0.18
Ticker: VFORX 

Vnguard Target Retirement 2045   0.18
Ticker: VTIVX 

Vnguard Target Retirement 2050 Fund  0.18
Ticker: VFIFX

Vnguard Total International Stk Idx Sgnl  0.16
Ticker: VTSGX 

Vnguard Value Index Signal   0.1
Ticker: VVISX 

Wl Fgo Premier Large Company Growth Fund   0.72
Ticker: EKJFX 

Funds available in her 401K (per diem job)

Fidelity Freedom K®2005 Fund (FFKVX) 0.005

Fidelity® Dividend Growth Fund - Class K (FDGKX) 0.0049

CREF Stock Account 0.00485

BlackRock Inflation Protected Bond Fund BlackRock Shares (BPLBX) 0.0048

PIMCO Total Return Fund Institutional Class (PTTRX) 0.0046

Fidelity Freedom K®2000 Fund (FFKBX) 0.0045

Fidelity Freedom K®Income Fund (FFKAX) 0.0045

Spartan®International Index Fund - Fidelity Advantage Class (FSIVX) 0.0017

Spartan® 500 Index Fund - Fidelity Advantage Class (FUSVX) 0.0007

Spartan® Total Market Index Fund - Fidelity Advantage Class (FSTVX) 0.0007

Templeton Developing Markets Trust Class A (TEDMX) 0.017

John Hancock Small Company Fund Class A (JCSAX) 0.015

RS Small Cap Growth Fund Class A (RSEGX) 0.0135

TCW Small Cap Growth Fund Class N (TGSNX) 0.0144

Invesco Global Small & Mid Cap Growth Fund Class A (AGAAX) 0.0143

Loomis Sayles Small Capital Value Fund Retail Class (LSCRX) 0.0133

Morgan Stanley Institutional Fund, Inc. Small Company Growth Portfolio Class A (MSSMX) 0.0137

Baron Asset Fund Retail Class (BARAX) 0.0132

Baron Growth Fund Retail Shares (BGRFX) 0.013

Royce Low-Priced Stock Fund Investment Class (RLPHX) 0.0126

Dreyfus Research Growth Fund, Inc. Class A (DWOAX) 0.0113

DWS Global Small Cap Growth Fund Class S (SGSCX) 0.0125

Calvert Equity Portfolio Class A (CSIEX) 0.0123

Morgan Stanley Institutional Fund, Inc. International Equity Portfolio Class A (MIQBX) 0.0122

Artisan International Fund Class Investor (ARTIX) 0.012

Invesco Mid Cap Core Equity Fund Class A (GTAGX) 0.012

Templeton Foreign Fund Class A (TEMFX) 0.0119

Invesco American Franchise Fund Class A (VAFAX) 0.0114

Ariel Appreciation Fund Investor Class (CAAPX) 0.0113

Gabelli Asset Fund Class I (GABIX) 0.0113

Invesco Charter Fund Class A (CHTRX) 0.0112

Mutual Shares Fund Class A (TESIX) 0.0112

AllianzGI NFJ Small-Cap Value Fund Administrative Class (PVADX) 0.0102

Morgan Stanley Institutional Global Strategist Portfolio Class A (MBAAX) 0.0109

American Beacon International Equity Fund Investor Class (AAIPX) 0.011

Neuberger Berman Core Bond Fund Investor Class (NCRIX) 0.0087

RidgeWorth Mid-Cap Value Equity Fund Class I (SMVTX) 0.0109

Neuberger Berman Guardian Fund Trust Class (NBGTX) 0.0108

Columbia Acorn Select Fund Class Z (ACTWX) 0.0107

Managers Cadence Capital Appreciation Fund Service Class (MCFYX) 0.0097

Oppenheimer Equity Income Fund Class A (OAEIX) 0.0106

Managers Cadence Mid-Cap Fund Service Class (MCMYX) 0.0098

Neuberger Berman Socially Responsive Fund Trust Class (NBSTX) 0.0105

Templeton World Fund Class A (TEMWX) 0.0105

Artisan Mid Cap Fund Class Institutional (APHMX) 0.0103

CRM Mid Cap Value Fund Class Investor (CRMMX) 0.0103

Mutual Global Discovery Fund Class Z (MDISX) 0.0102

Dreyfus Disciplined Stock Fund (DDSTX) 0.01

American Century Investments Ultra Fund Investor Class (TWCUX) 0.0099

Franklin Small-Mid Cap Growth Fund Class A (FRSGX) 0.0098

Morgan Stanley Institutional Fund, Inc. U.S. Real Estate Portfolio Class I (MSUSX) 0.0098

Dreyfus Appreciation Fund, Inc. Class Investor (DGAGX) 0.0097

Morgan Stanley Institutional Fund Trust Mid Cap Growth Portfolio Class A (MACGX) 0.0096

Oakmark Fund Class I (OAKMX) 0.0095

Invesco Small Cap Value Fund Class Y (VSMIX) 0.009

Templeton Global Bond Fund Class A (TPINX) 0.0088

American Century Investments Large Company Value Fund Investor Class (ALVIX) 0.0087

Dreyfus Intermediate Term Income Fund Class A (DRITX) 0.0086

Columbia Income Opportunities Fund Class Z (CIOZX) 0.0083

nvesco Growth and Income Fund Class A (ACGIX) 0.0083

Invesco Small Cap Growth Fund R5 Class (GTSVX) 0.0083

PIMCO Global Bond (Unhedged) Fund Administrative Class (PADMX) 0.008

Fidelity® Diversified International Fund - Class K (FDIKX) 0.0081

PIMCO High Yield Fund Administrative Class (PHYAX) 0.008

Janus Fund Class T (JANSX) 0.0078

Oakmark Equity And Income Fund Class I (OAKBX) 0.0077

PIMCO Long-Term U.S. Government Fund Administrative Class (PLGBX) 0.00725

Fidelity® Small Cap Stock Fund (FSLCX) 0.0072

Morgan Stanley Institutional Fund, Inc. Growth Portfolio Class I (MSEQX) 0.0072

PIMCO Low Duration Fund Administrative Class (PLDAX) 0.0071

Fidelity Freedom K®2045 Fund (FFKGX) 0.0069

Fidelity Freedom K®2050 Fund (FFKHX) 0.0069

Fidelity Freedom K®2055 Fund (FDENX) 0.0069

Fidelity Freedom K®2035 Fund (FKTHX) 0.0068

Fidelity Freedom K®2040 Fund (FFKFX) 0.0068

Fidelity® Low-Priced Stock Fund - Class K (FLPKX) 0.0068

Fidelity Freedom K®2030 Fund (FFKEX) 0.0067

Fidelity Freedom K®2025 Fund (FKTWX) 0.0062

Fidelity Freedom K®2020 Fund (FFKDX) 0.0059

Fidelity Freedom K®2015 Fund (FKVFX) 0.0057

Fidelity Freedom K®2010 Fund (FFKCX) 0.0054

Fidelity Freedom K®2005 Fund (FFKVX) 0.005

Fidelity® Dividend Growth Fund - Class K (FDGKX) 0.0049

CREF Stock Account 0.00485

BlackRock Inflation Protected Bond Fund BlackRock Shares (BPLBX) 0.0048

PIMCO Total Return Fund Institutional Class (PTTRX) 0.0046

Fidelity Freedom K®2000 Fund (FFKBX) 0.0045

Fidelity Freedom K®Income Fund (FFKAX) 0.0045

CREF Money Market Account 0.0041

Spartan®International Index Fund - Fidelity Advantage Class (FSIVX) 0.0012

Spartan® 500 Index Fund - Fidelity Advantage Class (FUSVX) 0.0005

Spartan® Total Market Index Fund - Fidelity Advantage Class (FSTVX) 0.0006


Questions:

1. Based on my current portfolio, I am looking for feedback on how I can invest efficiently now that my major debt (student loans) are out. A big fan of the 3-fun portfolio.,.,.

2. What investments should I invest $1000 a month (or whatever $ i can save up) in my taxable account (I will max out His 401k, Both IRAs, and can only contribute around $6000/yr to her 401k/403b due to her parttime/perdiem schedule)

3. For her, to make it simple for per part time/per diem jobs, contribute 4% of pay to Vanguard 2045?

Currently, Her contributes to Target Funds because It was simple for me at the time (and she doesnt work many days)

Thank you all!! Very happy that I can focus now that the monkey of a student loan is off my back!!

Updates based on forum feedback

Update 1:
Cleaned up her 401k and 403b available funds
Update 2:
Split her 401k and 403b annual contributions
Last edited by maxim81 on Fri Feb 14, 2014 3:25 pm, edited 2 times in total.

kerplunk
Posts: 771
Joined: Sun Apr 17, 2011 9:58 pm

Re: Student Loans paid off - now I want to focus on investin

Post by kerplunk » Thu Feb 13, 2014 4:15 pm

It looks like you know exactly what you are doing. Great job! I don't see anything that stands out.

Did you know that Vanguard Small-Cap Index contains about 10% REIT? If I were in your position (this is probably against traditional Boglehead wisdom), I would drop the REIT fund and increase the Small-Cap.

Also, 70/30 seems a bit light on the stocks. Vanguard suggests 90% stocks for someone your age. Obviously, you know your risk tolerance better than anyone else. Just wanted to point that out.

mnvalue
Posts: 1086
Joined: Sun May 05, 2013 2:22 pm

Re: Student Loans paid off - now I want to focus on investin

Post by mnvalue » Thu Feb 13, 2014 4:25 pm

1) Don't include the 529 when calculating percentages. It's not retirement money.
2) Don't put retirement money into taxable before you've maxed out tax-advantaged accounts. You've listed a 401k and a 403b for her, but noted contributions to only one of them. She should contribute 4% to whichever one is worse (probably her 403b) and then whatever % to the better one (probably her 401k) that will get her close to, but not over the $17,500 max BETWEEN THE TWO ACCOUNTS. So for example, if 4% on the one job is $4,000, then she should contribute up to, but not over $13,500. You'll need to keep an eye on this near the end of the year, as you never want to completely stop contributing. Unless her employer does a "true-up match" (most probably don't), then she needs to contribute at least 4% per paycheck to get the full match. It is her (and/or your) job, not the employers' jobs, to make sure she doesn't exceed $17,500 since she has two employers. If your goal is to put in $6,000 in taxable, then you should shift that goal to be to put $8,690 (the pre-tax value of $6,000 after-tax, assuming you itemize so your state tax is federally deductible) more into her 401k / 403b accounts instead.
3) Did I miss it, or did you not list choices in her 403b?
4) Using target funds in her account will make rebalancing calculations harder. I don't see a huge advantage to them.
5) Could you edit your post to cleanup the choices in her 401k so it's not a mile long? Also, you didn't quantify the amounts of the employer match for you, at least.

maxim81
Posts: 47
Joined: Sat Apr 19, 2008 7:03 pm

Re: Student Loans paid off - now I want to focus on investin

Post by maxim81 » Thu Feb 13, 2014 5:45 pm

mnvalue wrote:1) Don't include the 529 when calculating percentages. It's not retirement money.
2) Don't put retirement money into taxable before you've maxed out tax-advantaged accounts. You've listed a 401k and a 403b for her, but noted contributions to only one of them. She should contribute 4% to whichever one is worse (probably her 403b) and then whatever % to the better one (probably her 401k) that will get her close to, but not over the $17,500 max BETWEEN THE TWO ACCOUNTS. So for example, if 4% on the one job is $4,000, then she should contribute up to, but not over $13,500. You'll need to keep an eye on this near the end of the year, as you never want to completely stop contributing. Unless her employer does a "true-up match" (most probably don't), then she needs to contribute at least 4% per paycheck to get the full match. It is her (and/or your) job, not the employers' jobs, to make sure she doesn't exceed $17,500 since she has two employers. If your goal is to put in $6,000 in taxable, then you should shift that goal to be to put $8,690 (the pre-tax value of $6,000 after-tax, assuming you itemize so your state tax is federally deductible) more into her 401k / 403b accounts instead.
3) Did I miss it, or did you not list choices in her 403b?
4) Using target funds in her account will make rebalancing calculations harder. I don't see a huge advantage to them.
5) Could you edit your post to cleanup the choices in her 401k so it's not a mile long? Also, you didn't quantify the amounts of the employer match for you, at least.
1) Thanks
2) I do not think she will reach $17,500 between her 2 jobs because she is part time (403b) and per diem (401k). Part time is 10 days/month and per diem is 1-2 days/month. As of right now, she contributes 4% for the part time (403b) job. Based on current contributions (4% to 403b, 0% to 401k) , I anticipate the total 401k/403b contributions to be around $ 6000 - $7000/year (maybe even less).

We will definitely contribute 4% to the 401k (which is not being contributed to), but need guidance as to what fund to select

3) Fidelity NetBenefit's site is not easy to copy/paste available funds. I will attempt to try it again
4) Okay, cleaned up 403b and her 401k funds
5) Done

Laura
Posts: 7973
Joined: Mon Feb 19, 2007 7:40 pm

Re: Student Loans paid off - now I want to focus on investin

Post by Laura » Thu Feb 13, 2014 8:02 pm

Can you estimate how much you will add to each of her two retirement accounts? You mention the total but it would be important to split between the two so she can receive maximum matching funds. Please include the matching funds in the total amount going into each of your accounts (I assume you receive matching funds but you show only $17.5k as the contributions. Please add the matching funds to this total.)

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

mnvalue
Posts: 1086
Joined: Sun May 05, 2013 2:22 pm

Re: Student Loans paid off - now I want to focus on investin

Post by mnvalue » Thu Feb 13, 2014 8:26 pm

If she's not going to reach $17,500, then sure, you don't need to worry about exceeding that limit. But the other point still remains: You should not contribute a single retirement dollar to taxable if you haven't first maxed out her 401k. So if that means putting literally 100% of her income from that job into the 401k, then do that. If you two would still would have money left over to invest, then put up to 100% of her income from the other job into the 403b. If you put 100% of her income into the 403b and still have money left to invest, then and only then should you put money into taxable.

User avatar
Duckie
Posts: 5628
Joined: Thu Mar 08, 2007 2:55 pm

Re: Student Loans paid off - now I want to focus on investin

Post by Duckie » Thu Feb 13, 2014 9:58 pm

maxim81, congratulations on paying off that student debt.

You have a desired AA of 70% stocks, 30% bonds, with 30% of stocks in international. That breaks down to 49% US stocks, 21% international stocks, and 30% bonds. Here is a possible retirement portfolio:

Taxable at Vanguard -- 0%
0% (VTSMX) Vanguard Total Stock Market Index Fund Investor Shares (0.17%)
0
% (VGTSX) Vanguard Total International Stock Index Fund Investor Shares (0.22%) <-- Just use these two funds in taxable. Switch to cheaper admiral shares when you have enough assets.

His 401k -- 73%
28% (VIFSX) Vanguard 500 Index Fund Signal Shares (0.05%)
2% (VMISX) Vanguard Mid-Cap Index Fund Signal Shares (0.10%) <-- You could skip this.
5% (VSISX) Vanguard Small-Cap Index Fund Signal Shares (0.10%)
8% (VTSGX) Vanguard Total International Stock Index Fund Signal Shares (0.16%)
30% (VIBSX) Vanguard Intermediate-Term Bond Index Fund Signal Shares (0.10%)

Her 403b -- 13% <-- This includes the rollover from Her old 403b (if possible).
13% (VTSGX) Vanguard Total International Stock Index Fund Signal Shares (0.16%)
0% (VIBSX) Vanguard Intermediate-Term Bond Index Fund Signal Shares (0.10%) <-- If needed in the future.

Her 401k -- 0%
0% (FSTVX) Spartan Total Market Index Fund Advantage Class (0.06%)

His Traditional IRA at Vanguard -- 6%
6% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)

His Roth IRA at Vanguard -- 8%
8% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)

Her Roth IRA at Vanguard -- 0%
0% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)

My comments/questions:
  • Use His 401k for rebalancing.
  • Do you have children? If not, why do you have a 529 plan? (And it's not part of the retirement portfolio.)
  • TISM is perfect for taxable because it allows you to take advantage of the 
Foreign tax credit.
  • See Approximating total stock market for the reasoning behind the US stock breakdown in His 401k.
  • Are you anywhere near the Roth IRA contribution income limits? If so, learn about the 
Backdoor Roth IRA
 method.
  • If you will need to use the backdoor Roth method, because of the pro-rata rule either convert His Traditional IRA to a Roth IRA and take the one-time tax hit or roll it to His 401k.
  • Save up the $500 per month in savings until you have the $3K fund minimums for the taxable account.
  • Better yet, use the extra to max more tax-sheltered accounts.
  • Besides your $50K emergency fund do you have a short-term-needs fund for planned future expenses (new car, fancy vacation, etc)?
Your questions:
1. Based on my current portfolio, I am looking for feedback on how I can invest efficiently now that my major debt (student loans) are out. A big fan of the 3-fund portfolio.,.,.
  • See above.
2. What investments should I invest $1000 a month (or whatever $ i can save up) in my taxable account (I will max out His 401k, Both IRAs, and can only contribute around $6000/yr to her 401k/403b due to her parttime/perdiem schedule)
  • See above.
3. For her, to make it simple for per part time/per diem jobs, contribute 4% of pay to Vanguard 2045?
  • No, use a separate fund. See above.
Something to think about.

maxim81
Posts: 47
Joined: Sat Apr 19, 2008 7:03 pm

Re: Student Loans paid off - now I want to focus on investin

Post by maxim81 » Fri Feb 14, 2014 3:25 pm

Laura wrote:Can you estimate how much you will add to each of her two retirement accounts? You mention the total but it would be important to split between the two so she can receive maximum matching funds. Please include the matching funds in the total amount going into each of your accounts (I assume you receive matching funds but you show only $17.5k as the contributions. Please add the matching funds to this total.)

Laura
Thanks Laura. I updated her 401k and 403b contributions.

maxim81
Posts: 47
Joined: Sat Apr 19, 2008 7:03 pm

Re: Student Loans paid off - now I want to focus on investin

Post by maxim81 » Fri Feb 14, 2014 3:51 pm

mnvalue wrote:If she's not going to reach $17,500, then sure, you don't need to worry about exceeding that limit. But the other point still remains: You should not contribute a single retirement dollar to taxable if you haven't first maxed out her 401k. So if that means putting literally 100% of her income from that job into the 401k, then do that. If you two would still would have money left over to invest, then put up to 100% of her income from the other job into the 403b. If you put 100% of her income into the 403b and still have money left to invest, then and only then should you put money into taxable.
Interesting, it is possible for her to put 100% of her income (part time and per job) to 401k and 403b jobs. I was nervous that if i put everything then we will have nothing left over, but did not do the math.

We will definitely do that - max out her 401k and 403b contributions. Pretty much means that 100% of her diem job income will go to 403b.

Silly question - But how can I calculate how much % to contribute? Besides dividing 17,500 by 12 months (~1460) and then figuring out how much she makes and comparing it

maxim81
Posts: 47
Joined: Sat Apr 19, 2008 7:03 pm

Re: Student Loans paid off - now I want to focus on investin

Post by maxim81 » Fri Feb 14, 2014 3:55 pm

Duckie - responses to your comments..:

[*]His 401k for rebalancing.
Okay
[*]Do you have children? If not, why do you have a 529 plan? (And it's not part of the retirement portfolio.)
yes I do, I will remove 529. Sorry about that.
[*]TISM is perfect for taxable because it allows you to take advantage of the 
Foreign tax credit.
[*]See Approximating total stock market for the reasoning behind the US stock breakdown in His 401k.
[*]Are you anywhere near the Roth IRA contribtion income limits? If so, learn about the 

Backdoor Roth IRA
 method.
[*]If you will need to use the backdoor Roth method, because of the pro-rata rule either convert His Traditional IRA to a Roth IRA and take the one-time tax hit or roll it to His 401k.
I am above the Roth income limit, and yep, will be doing backdoor. Just had to wait for the loans to be paid off
[*]Save up the $500 per month in savings until you have the $3K fund minimums for the taxable account.
I thought of using the cash reserves to open the taxable account and then invest $500 (or $) in that account
[*]Better yet, use the extra to max more tax-sheltered accounts.
[*]Besides your $50K emergency fund do you have a short-term-needs fund for planned future expenses (new car, fancy vacation, etc)?[/list]
Definitely a new car and perhaps a down payment in a couple of hours

Thanks again for the detailed breakdown. This is definitely helpful!!

mnvalue
Posts: 1086
Joined: Sun May 05, 2013 2:22 pm

Re: Student Loans paid off - now I want to focus on investin

Post by mnvalue » Fri Feb 14, 2014 8:41 pm

maxim81 wrote:how can I calculate how much % to contribute? Besides dividing 17,500 by 12 months (~1460) and then figuring out how much she makes and comparing it
That's pretty much it. The deductions can make this tricky, especially if she has any insurance payments or the like coming out. What I'd suggest is that you start with something like 50%. See how many dollars that translates to in the first paycheck and how many dollars of net pay are left in the paycheck. Then adjust based on that.

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