New to Bogleheads and Interested in Your Advice

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mrmariner
Posts: 4
Joined: Fri Jan 29, 2016 3:35 pm

New to Bogleheads and Interested in Your Advice

Post by mrmariner » Fri Jan 29, 2016 9:38 pm

Hello bogleheads! I am a new member to this forum, as a matter of fact I'm a new member to posting to webforums in general haha. First I want to thank everyone here for the wealth of knowledge that they share on a day to day basis. I have been a reader of these forums for awhile and it has sparked an interest in investing for the long term for me. So I decided to join and ask a few questions about my overall asset allocation and simplifying my portfolios. To start I will follow the guideline for posting questions.

Emergency funds: $36,000 in short term (less than a year) CD Ladder 4 CD's of 1 year maturing every 3 months
Debt: No Debt – Single credit card I use instead of a debit card and pay off every month. For rewards as well as building credit
Tax Filing Status: Single 1
Tax Rate: 28% (bracket) Federal, 6.37% (bracket) State (I'm generally in these brackets but my income is variable so I generalized)
State of Residence: NJ
Age: 27
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 30-40% of stocks

As far as breakdowns of allocation I do want to tilt slightly towards real estates within my retirement accounts (tax advantaged).

Current retirement assets

Taxable
Roughly $100,000 in 5 year CD Ladder (20,000 and interest maturing yearly). It is a lot to tie up in cash I know, but I may deploy this later as down payments on rental properties (that's a discussion for later). For the time being though it will stay in cash due to the cyclical nature of my industry as additional long term safety net funds.

Currently have a taxable account with Betterment. 80/20 stock bond allocation with approximately $13,000. Using this to accumulate money and will probably move to Vanguard directly at some point. For the moment the fractional shares, ease of use, and auto re-balancing are enough of a draw for me to justify the added expense for the time being.

Ticker Fund Allocation ER
VTI Vanguard Total Stock Market 14.6% 0.05%
VTV Vanguard Large Cap Value 14.7% 0.09%
VOE Vanguard Mid Cap Value 4.7% 0.09%
VBR Vanguard Small Cap Value 4.1% 0.09%
VEA Vanguard Developed Markets 33.8% 0.09%
VWO Vanguard Emerging Markets 8.5% 0.15%
MUB iShares National AMT Municpal Bonds 11% 0.25%
LQD iShares Investment Grade Corporate 1.1% 0.15%
BNDX Vanguard Total International Bond Market 4.6% 0.19%
VWOB Vanguard Emerging Markets Government Bonds 2.9% 0.34%

Plus a 0.25% fee on the overall account
401k
Roughly $15,800 allocated to the predefined moderate aggressive portfolio

Portfolio consists of:

Ticker Fund Allocation ER
BPRAX Black Rock Inflation Protected Bond A 2% 0.78%
SASMX Clearbridge Small Cap Growth Fund A 2% 1.26%
COVAX Columbia Small cap Value Fund II Class A 2% 1.34%
DODGX Dodge & Cox Stock Fund 9% 0.52%
JLGRX JP Morgan Large Cap Growth R5 18% 0.70%
Metlife GIC Metlife Stable Value GIC Fund 10% 1.17%
MWTIX Metropolitan West Total Return Bond I 2% 0.44%
FREAX Nuveen Real Estate Securities A 3% 1.30%
OAKIX Oakmark International Fund Class I 15% 0.95%
ODMAX Developing Markets Fund Class A 8% 1.30%
PCRRX PIMCO Commodity Real Return Admin 3% 0.99%
PFOAX PIMCO Foreign Bond Fund Class A 9% 0.92%
PQIAX Principal Investors Equity Income Fund Class A 9% 0.89%
VETAX Victory Sycamore Established Value Fund A 3% 1.04%
MGOAX Victory Munder Mid Cap Core Growth Fund Class A 3% 1.32%
WACPX WesternAsset CorePlusBond Portfolio Institutional Class A 2% 0.45%

A little too slice and dice, loads are waived on these funds but the overall expense ratios are relatively high. Would like to reduce the complexity and fees on this and bring it more towards an 80/20 overall allocation.

Defined Contribution Plan

Roughly $10,000 allocated to the moderate aggressive preset defined differently of course than my 401k:
Ticker Fund Allocation ER
RERCX American Euro-Pacific Growth Fund Class R3 15% 1.13%
SASMX Clearbridge Small Cap Growth Fund A 2% 1.26%
EAASX EatonVance Atlanta Capital SMID-Cap Fund A 3% 1.23%
VSCAX Invesco Van Kampen – Small Cap Value A 2% 1.14%
OLGAX JP Morgan Large Cap Growth Fund Class A 18% 1.05%
JVAAX JP Morgan Value Advantage A 18% 1.25%
WAPAX Legg Mason – Western Core Plus Bond A 2% 0.78%
Metlife GIC Metlife Stable Value GIC Fund 10% 1.17%
MWTRX Metropolitan West Total Return Bond 2% 0.69%
FREAX Nuveen Real Estate Securities A 3% 1.30%
ODMAX Developing Markets Fund Class A 8% 1.30%
PCRAX PIMCO Commodity Real Return Strategy Fund Class A 3% 1.24%
PFOAX Foreign Bond Fund Class A 9% 0.92%
VIPSX Vanguard Inflation Protected Securities Investor Class 2% 0.20%
VETAX Victory Sycamore Established Value Fund A 3% 1.04%

Similar to above

Money Purchase Benefit Plan

My attempt at simplification $4,700 invested as:
Ticker Fund Allocation ER
RERFX American Euro Pacific Growth Fund Class R5 30% 0.53%
DODGX Dodge & Cox Stock Fund 5% 0.52%
MWTIX Metropolitan West Total Return Bond I 20% 0.44%
FREAX Nuveen Real Estate Securities A 5% 1.30%
OAKIX Oakmark International Fund Class I 10% 0.95%
VINIX Vanguard Institutional Class Index Fund 20% 0.04%
VIMAX Vanguard Mid-Cap Index Fund Admiral Class 10% 0.09%

Roth IRA

Roughly $7,800 account with betterment at 100% stock allocation.
Ticker Fund Allocation ER
VTI Vanguard Total Stock Market 17.6% 0.05%
VTV Vanguard Large Cap Value 17.6% 0.09%
VOE Vanguard Mid Cap Value 5.7% 0.09%
VBR Vanguard Small Cap Value 5% 0.09%
VEA Vanguard Developed Markets 40.8% 0.09%
VWO Vanguard Emerging Markets 13.3% 0.15%

Plus an overall fee of 0.25%
Contributions

New annual Contributions
$18,000 401k (no employer match)
$5,500 Roth IRA
$4,000 (roughly) DC Plan
$1,400 (roughly) MPB Plan
$33,000 taxable obviously I won't be able to do this forever... I just have excess cash and incoming income with no bills for the rest of the year. (I make decent wages plus I'm an aggressive saver and live with my parents because I'm gone most of the year)

Available funds

Funds available in 401(k) and MPB
Ticker Fund ER
RERFX American Euro Pacific Growth Fund Class R5 0.53%
MALOX Black Rock Global Allocation Institutional 0.87%
BPRAX Black Rock Inflation Protected Bond A 0.78%
SASMX Clearbridge Small Cap Growth Fund A 1.26%
SMGIX Columbia Contrarian Core Z 0.87%
COVAX Columbia Small cap Value Fund II Class A 1.34%
DODGX Dodge & Cox Stock Fund 0.52%
FCNTX Fidelity Contra Fund 0.64%
FKINX Franklin Income Fund Class A 0.61%
JLGRX JP Morgan Large Cap Growth R5 0.7%
MHCAX Mainstay High Yield Corporate Bond Fund Class A 0.99%
Metlife GIC Metlife Stable Value GIC Fund 1.17%
MWTIX Metropolitan West Total Return Bond I 0.44%
MAMJX MFS Moderate Allocation R4 0.75%
FREAX Nuveen Real Estate Securities A 1.3%
OAKIX Oakmark International Fund Class I 0.95%
ODMAX Developing Markets Fund Class A 1.30%
PFOAX Foreign Bond Fund Class A 0.92%
PQIAX Principal Investors Equity Income Fund Class A 0.89%
TRSGX T Rowe Price Personal Strategy Growth Fund 0.78%
VINIX Vanguard Institutional Class Index Fund 0.04%
VIMAX Vanguard Mid-Cap Index Fund Admiral Class 0.09%
VETAX Victory Sycamore Established Value Fund A 1.04%
MGOAX Victory Munder Mid Cap Core Growth Fund Class A 1.32%
SGRKX Wells Fargo Advantage Growth Fund 0.96%
WACPX Western Asset Core Plus Bond Portfolio Institutional Class A 0.45%

Funds available in DC Plan
Ticker Fund ER
RWICX American Capital World Growth & Income Fund Class R3 1.09%
RERCX American Euro-Pacific Growth Fund Class R3 1.13%
RFNCX American Fundamental Investors Fund Class R3 0.96%
MDLOX Black Rock Global Allocation A 1.13%
SASMX Clearbridge Small Cap Growth Fund A 1.26%
CBLAX Columbia Balanced Fund Class A 1.09%
SMGIX Columbia Contrarian Core Z 0.87%
DAGVX Dreyfus Strategic Value Class A 0.98%
EAASX EatonVance Atlanta Capital SMID-Cap Fund A 1.23%
FCNTX Fidelity Contra Fund 0.64%
VSCAX Invesco Van Kampen – Small Cap Value A 1.14%
WASAX Ivy Asset Allocation A 0.96%
OLGAX JP Morgan Large Cap Growth Fund Class A 1.05%
JVAAX JP Morgan Value Advantage A 1.25%
WAPAX Legg Mason – Western Core Plus Bond A 0.78%
MHCAX Mainstay High Yield Corporate Bond Fund Class A 0.99%
Metlife GIC Metlife Stable Value GIC Fund 1.17%
MWTRX Metropolitan West Total Return Bond 0.69%
FREAX Nuveen Real Estate Securities A 1.30%
OARIX Oakmark International Fund II 1.33%
ODMAX Developing Markets Fund Class A 1.30%
PCRAX PIMCO Commodity Real Return Strategy Fund Class A 1.24%
PFOAX Foreign Bond Fund Class A 0.92%
VIPSX Vanguard Inflation Protected Securities Investor Class 0.20%
VINIX Vanguard Institutional Class Index Fund 0.04%
VETAX Victory Sycamore Established Value Fund A 1.04%
SGRKX Wells Fargo Advantage Growth Fund 0.96%


Questions:
1. My idea is to simplify my 401k, reduce fees, and keep primarily to an 80/20 stock bond split (yes I'm including real estate in equities) I tilted slightly towards large cap value used VINIX and VIMAX as my US exposure since I don't have access to total stock market and the different investments in DC make it a little more difficult to manage across the three retirement plans from work.

This was my plan to simplify (which I did in my MPB) Any advice on whether or not this is my best option would be welcome.
Fund Net Expense Ratio Description
RERFX 30% Foreign large cap (growth tilted)
DODGX 5% Domestic large cap value
MWTIX 20% Bonds (intermediate)
FREAX 5% Real estate fund
OAKIX 10% Foreign large cap (value tilted)
VINIX 20% Domestic large cap
VIMAX 10% Domestic mid cap

2. I was wondering if I should just put the DC plan in VINIX and FREAX to balance around that since my options are a bit more constrained in that plan. From what I have been reading the low cost index funds are the better deal in the long run but my options are limited.

3. I have been considering my taxable account as a separate “bucket” so to speak. I plan to put as much excess as I can in taxable so that hopefully I can retire at 45 or 50 and use that to live off of while allowing the rest to grow tax advantaged. I am 27 and expect my income to go up significantly in the future. Is this a good idea or should I treat it all as one?

I'm doing the best I can to capture the whole market without making too many sacrifices to fees or active management (but at the same time I'm not opposed to using them if there is no other way to get exposure). Granted some of the actively managed funds such as Dodge and Cox have a long history but I'll take the ups and downs for the long run. I'm OK with the 80/20 AA as I have plenty of reserves and I'm not willing to panic sell. I plan on stepping this down as I get older and closer to retirement.

I apologize for the extremely long post, but I figured I would give everyone as much information as I could. So if I missed anything I apologize in advance, just ask me. Thank you all for your willingness to share your knowledge and your posts past present and future!

Edit 1: Upated formatting and added fund names and expense ratios to make it easier to read as per request. Thanks.
Last edited by mrmariner on Sat Jan 30, 2016 2:39 am, edited 1 time in total.

Lafder
Posts: 3705
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: New to Bogleheads and Interested in Your Advice

Post by Lafder » Fri Jan 29, 2016 10:31 pm

Welcome here!

I have a few requests to make your post more easily readable, which will get more replies.

Go back and edit and add the NAME of each fund next to the ticker symbol. Few folks will know the fund from the ticker, and the name tells us a lot without looking it up.

Also go back and add the ER (expense ratio) for each fund. You have listed descriptions in some parts and ERs in some. It is much easier if both are listed.

With those details added everywhere, more folks can more easily reply :)

lafder

Lafder
Posts: 3705
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: New to Bogleheads and Interested in Your Advice

Post by Lafder » Sat Jan 30, 2016 5:55 pm

Great thorough first post!

I went through and made comments. But, read this first :) viewtopic.php?f=10&t=88005

The link above will answer every question you can think of about the simplicity and benefit of a 3 fund portfolio!! It is worth reading all the way through :)

*****Did you read the above link yet ?**********

Emergency funds: $36,000 in short term (less than a year) CD Ladder 4 CD's of 1 year maturing every 3 months
((How many months or year's expenses is 36k ?))

Debt: No Debt – Single credit card I use instead of a debit card and pay off every month. For rewards as well as building credit
((Yay no debt!!))

Age: 27
((Congrats on finding Bogleheads at a young age!))

Desired Asset allocation: 80% stocks / 20% bonds
((Very reasonable for your age. We were at 80/20 until our later 40s))

Desired International allocation: 30-40% of stocks
((VG used to rec 20-40%, but last year they raised their recs to 30-50% International stocks and bonds. Note that when we talk about it here, we refer to % of stocks, not % of portfolio. But yes you have to convert to % portfolio to be sure you hit your AA. So if you want 80/20, 40% International stocks, it would be 48% US stocks/32% International stocks/20% bonds. No one knows the best % International, but there are arguments for 0-50%. I am at 30% based on VG's old 20-40% rec and have not changed it. I think your idea of 30-40% is very reasonable))

As far as breakdowns of allocation I do want to tilt slightly towards real estates within my retirement accounts (tax advantaged).
((There are arguments for and against real estate/REITS. If you end up buying residential rentals, I would not have too much of that plus REITS or you are very real estate heavy in your portfolio))

Current retirement assets

Taxable
Roughly $100,000 in 5 year CD Ladder (20,000 and interest maturing yearly). It is a lot to tie up in cash I know, but I may deploy this later as down payments on rental properties (that's a discussion for later). For the time being though it will stay in cash due to the cyclical nature of my industry as additional long term safety net funds.
((You seem to be a big fan of CDs. What kind of interest rates do you get?))

Currently have a taxable account with Betterment. 80/20 stock bond allocation with approximately $13,000. Using this to accumulate money and will probably move to Vanguard directly at some point. For the moment the fractional shares, ease of use, and auto re-balancing are enough of a draw for me to justify the added expense for the time being.
((Only you can decide if it is worth the extra expense. You can manage your own accounts at VG and do tax loss harvesting))

((This info below is just your Betterment Taxable account ? Note that it will really be more clear if you take a look at your total portfolio NOT including Emergency funds, and consider that 100%. So your Betterment account is only 13,000/? 129,000 which makes the holdings much smaller % than you have listed here. This also makes the CDs you are holdings more clearly the LARGEST part of your portfolio. By doing % of total you will see how the % relate to each other. So do go back and edit that on your post))

Ticker Fund Allocation ER
((If these are Betterment you have little say in what they use. SO the question is whether to keep Betterment or change to a no extra fee option. I would change :)))
VTI Vanguard Total Stock Market 14.6% 0.05%
VTV Vanguard Large Cap Value 14.7% 0.09%
VOE Vanguard Mid Cap Value 4.7% 0.09%
VBR Vanguard Small Cap Value 4.1% 0.09%
VEA Vanguard Developed Markets 33.8% 0.09%
VWO Vanguard Emerging Markets 8.5% 0.15%
MUB iShares National AMT Municpal Bonds 11% 0.25%
LQD iShares Investment Grade Corporate 1.1% 0.15%
BNDX Vanguard Total International Bond Market 4.6% 0.19%
VWOB Vanguard Emerging Markets Government Bonds 2.9% 0.34%


401k
Roughly $15,800 allocated to the predefined moderate aggressive portfolio

((I like to keep it simpler with a 3 fund portfolio and use the lowest fee options. I will edit the options to the ones I would use where you list available funds. I try to avoid any funds with ERs over 1))

Portfolio consists of:

Ticker Fund Allocation ER
BPRAX Black Rock Inflation Protected Bond A 2% 0.78%
SASMX Clearbridge Small Cap Growth Fund A 2% 1.26%
COVAX Columbia Small cap Value Fund II Class A 2% 1.34%
DODGX Dodge & Cox Stock Fund 9% 0.52%
JLGRX JP Morgan Large Cap Growth R5 18% 0.70%
Metlife GIC Metlife Stable Value GIC Fund 10% 1.17%
MWTIX Metropolitan West Total Return Bond I 2% 0.44%
FREAX Nuveen Real Estate Securities A 3% 1.30%
OAKIX Oakmark International Fund Class I 15% 0.95%
ODMAX Developing Markets Fund Class A 8% 1.30%
PCRRX PIMCO Commodity Real Return Admin 3% 0.99%
PFOAX PIMCO Foreign Bond Fund Class A 9% 0.92%
PQIAX Principal Investors Equity Income Fund Class A 9% 0.89%
VETAX Victory Sycamore Established Value Fund A 3% 1.04%
MGOAX Victory Munder Mid Cap Core Growth Fund Class A 3% 1.32%
WACPX WesternAsset CorePlusBond Portfolio Institutional Class A 2% 0.45%

A little too slice and dice, loads are waived on these funds but the overall expense ratios are relatively high. Would like to reduce the complexity and fees on this and bring it more towards an 80/20 overall allocation. ((I agree!))

Defined Contribution Plan

Roughly $10,000 allocated to the moderate aggressive preset defined differently of course than my 401k: ((Make it simpler))
Ticker Fund Allocation ER
RERCX American Euro-Pacific Growth Fund Class R3 15% 1.13%
SASMX Clearbridge Small Cap Growth Fund A 2% 1.26%
EAASX EatonVance Atlanta Capital SMID-Cap Fund A 3% 1.23%
VSCAX Invesco Van Kampen – Small Cap Value A 2% 1.14%
OLGAX JP Morgan Large Cap Growth Fund Class A 18% 1.05%
JVAAX JP Morgan Value Advantage A 18% 1.25%
WAPAX Legg Mason – Western Core Plus Bond A 2% 0.78%
Metlife GIC Metlife Stable Value GIC Fund 10% 1.17%
MWTRX Metropolitan West Total Return Bond 2% 0.69%
FREAX Nuveen Real Estate Securities A 3% 1.30%
ODMAX Developing Markets Fund Class A 8% 1.30%
PCRAX PIMCO Commodity Real Return Strategy Fund Class A 3% 1.24%
PFOAX Foreign Bond Fund Class A 9% 0.92%
VIPSX Vanguard Inflation Protected Securities Investor Class 2% 0.20%
VETAX Victory Sycamore Established Value Fund A 3% 1.04%

Similar to above

Money Purchase Benefit Plan

My attempt at simplification $4,700 invested as: ((Still too many funds for my tastes :)))
Ticker Fund Allocation ER
RERFX American Euro Pacific Growth Fund Class R5 30% 0.53% ((OK as International fund))
DODGX Dodge & Cox Stock Fund 5% 0.52% ((Sell, redundant and more expensive than VG Stock index fund))
MWTIX Metropolitan West Total Return Bond I 20% 0.44% ((I would have to read more about it))
FREAX Nuveen Real Estate Securities A 5% 1.30% ((Not worth the ER to me))
OAKIX Oakmark International Fund Class I 10% 0.95% ((I would have to read more about it))
VINIX Vanguard Institutional Class Index Fund 20% 0.04% ((SP 500 large cap fund can be used alone as the US stock fund))
VIMAX Vanguard Mid-Cap Index Fund Admiral Class 10% 0.09% ((Can use with SP 500 to get closer to total stock market))

Roth IRA

Roughly $7,800 account with betterment at 100% stock allocation. ((Do you have a choice of what finds if at Betterment ?))
Ticker Fund Allocation ER
VTI Vanguard Total Stock Market 17.6% 0.05%
VTV Vanguard Large Cap Value 17.6% 0.09%
VOE Vanguard Mid Cap Value 5.7% 0.09%
VBR Vanguard Small Cap Value 5% 0.09%
VEA Vanguard Developed Markets 40.8% 0.09%
VWO Vanguard Emerging Markets 13.3% 0.15%

Plus an overall fee of 0.25% ((Ouch to me))

Contributions ((Nice!!))

New annual Contributions
$18,000 401k (no employer match)
$5,500 Roth IRA
$4,000 (roughly) DC Plan
$1,400 (roughly) MPB Plan
$33,000 taxable obviously I won't be able to do this forever... I just have excess cash and incoming income with no bills for the rest of the year. (I make decent wages plus I'm an aggressive saver and live with my parents because I'm gone most of the year)

Available funds

Funds available in 401(k) and MPB ((These are the ones that look best to me.
US stock Fund: (See this https://www.bogleheads.org/wiki/Approxi ... ock_market )
VINIX Vanguard Institutional Class Index Fund 0.04%
VIMAX Vanguard Mid-Cap Index Fund Admiral Class 0.09%

International Stocks- I would have to read more to decide, and I would only pick one, or use a different account for International stock.
RERFX American Euro Pacific Growth Fund Class R5 0.53%
MALOX Black Rock Global Allocation Institutional 0.87%
OAKIX Oakmark International Fund Class I 0.95%

Bond funds (I would have to read more to pick the "best")
BPRAX Black Rock Inflation Protected Bond A 0.78%
MWTIX Metropolitan West Total Return Bond I 0.44%
WACPX Western Asset Core Plus Bond Portfolio Institutional Class A 0.45%

PFOAX Foreign Bond Fund Class A 0.92% ((If you really want a foreign bond fund))




Funds available in DC Plan ((Consider keeping it simple with just a stock fund with or without this TIPS fund:
VIPSX Vanguard Inflation Protected Securities Investor Class 0.20%
VINIX Vanguard Institutional Class Index Fund 0.04% ))



Questions:
1. My idea is to simplify my 401k, reduce fees, and keep primarily to an 80/20 stock bond split (yes I'm including real estate in equities) I tilted slightly towards large cap value used VINIX and VIMAX as my US exposure since I don't have access to total stock market and the different investments in DC make it a little more difficult to manage across the three retirement plans from work.

This was my plan to simplify (which I did in my MPB) Any advice on whether or not this is my best option would be welcome.
Fund Net Expense Ratio Description ((Sorry, too complicated for my taste :). But if you like it it is up to you. I think there are lower cost simpler options available. This is simplified vs your current holdings :)))
RERFX 30% Foreign large cap (growth tilted)
DODGX 5% Domestic large cap value
MWTIX 20% Bonds (intermediate)
FREAX 5% Real estate fund
OAKIX 10% Foreign large cap (value tilted)
VINIX 20% Domestic large cap
VIMAX 10% Domestic mid cap

2. I was wondering if I should just put the DC plan in VINIX and FREAX to balance around that since my options are a bit more constrained in that plan. From what I have been reading the low cost index funds are the better deal in the long run but my options are limited.
((See my suggestion above. FREAX is way to high an ER for me to consider))

3. I have been considering my taxable account as a separate “bucket” so to speak. I plan to put as much excess as I can in taxable so that hopefully I can retire at 45 or 50 and use that to live off of while allowing the rest to grow tax advantaged. I am 27 and expect my income to go up significantly in the future. Is this a good idea or should I treat it all as one?
((Yes and no. It is all "your" money so it is all one "bucket" But yes it makes sense to think of different AAs for taxable vs retirement accounts.))

Lafder

retiredjg
Posts: 32379
Joined: Thu Jan 10, 2008 12:56 pm

Re: New to Bogleheads and Interested in Your Advice

Post by retiredjg » Sun Jan 31, 2016 9:10 am

I'm not familiar with having a 401k plan and a Defined Contribution Plan and a Money Purchase Benefit plan all active at the same time. Is there some kind of number attached to those plans? 401a or something like that? Who puts in the money in those plans?

Obviously, the limit for the 401k plan is $18k, but what about the other 2 plans? What are the limits for them?

Using Betterment is messing you up in more ways than you realize. You are considering paying a very high cost for your Nuveen REIT fund when you could be holding a low cost Vanguard REIT fund in your Roth IRA. I suggest that you drop Betterment, for the Roth IRA anyway.

I think having the CDs for future real estate purchases is fine. I would not include that in your asset allocation.

Just looking at the other accounts, a portfolio could be set up like this. The percentages represent percentage of whole portfolio (not including taxable).


401k $15,800 41.3%
20.1% VINIX Vanguard Institutional Class Index Fund 0.04%
10% VIMAX Vanguard Mid-Cap Index Fund Admiral Class 0.09%
10% MWTIX Metropolitan West Total Return Bond I 0.44%


Defined Contribution Plan Roughly $10,000 26.1%
16.1% VINIX Vanguard Institutional Class Index Fund 0.04%
10% VIPSX Vanguard Inflation Protected Securities Investor Class 0.20%


Money Purchase Benefit Plan $4,700 12.3%
2.3% VINIX Vanguard Institutional Class Index Fund 0.04%
10% RERFX American Euro Pacific Growth Fund Class R5 0.53%


Roth IRA Roughly $7,800 20.4%
5% Vanguard REIT
15.4% Vanguard International Index

As you can see this is much simpler than you were thinking. It is not perfect, but a serious improvement over what you currently have and it cuts your cost by a lot.

If you are willing to give up Betterment in taxable, you could put all of your international in taxable and have more flexibility in your Roth IRA.

mrmariner
Posts: 4
Joined: Fri Jan 29, 2016 3:35 pm

Re: New to Bogleheads and Interested in Your Advice

Post by mrmariner » Sun Jan 31, 2016 4:19 pm

Thank you both for commenting. Just a post to say that I am currently reading through what you wrote and thinking it over. I apologize but it takes me a bit to digest things. I did my best to make the post as readable as possible. Just a few comments to make things clearer as I think overall advice over. My DC plan is a replacement to a defined benefits pension. The contributions will continue to increase with age and years of service. The money purchase benefit is a holdover from pension days. It was intended to be a company contribution, but not a "match." I receive DC contributions and MPB contributions regardless and the DC plan is much clearer with the MPB set up per contract (different rules depending on who I am working for at the moment).

mrmariner
Posts: 4
Joined: Fri Jan 29, 2016 3:35 pm

Re: New to Bogleheads and Interested in Your Advice

Post by mrmariner » Sun Jan 31, 2016 8:12 pm

-My CD rates are paltry as are many peoples out here. I get 2% on 5 years. I defaulted to CD's as I have been researching the myriad investment options out there. I asked advice of the financial planner for my retirement account and his advice appeared self serving so I opted to kind of go it alone and see what worked.

-I'm not opposed to transferring to Vanguard. It may be a good idea to let betterment ride for a year, liquidate it next year and make the adjustments for the taxable portion, on the flip side I can do this for my Roth immediately. I can hold bonds strictly in my tax advantaged accounts and get rid of them completely in taxable. In addition I will be able to consistently place money with Vanguard for the rest of the year.

-I have been looking at things as different buckets of money. It may be smarter to look at it as a whole instead. My thoughts on this were that my taxable account is more for early retirement. If I plan on retiring earlier then I can't access my 401k and associated accounts.

-I agree with a good portion (30-40% overall) spread across international. I do not expect the US economy to be exceptional enough going forward to justify an overallocation to US due to globalization and increasing competition. I feel owning total stock market, total international and total bond would be an excellent idea and I think I will lobby to add them to the 401k offerings. But for the moment my retirement account is limited to what it is.

Given the advice so far, I like the idea of moving primarily to VINIX VIMAX VIPSX and MWTIX for limiting fees within my retirement account. If I look at everything overall it is smarter to move to Vanguard, use my Roth for international exposure and REIT treat my taxable as part of my overall portfolio instead of a bucket. From what I've read before I posted I think I knew this deep down.

Another question.Would it make more sense to just skip bonds since I have so much in Certificates at the moment? I know lafder you say to not treat it as part of asset allocation, but isn't it technically? If I deploy it as down payments on rental properties/keep a portion as operating capital it changes at that point and I can adjust my retirement accounts accordingly but i plan on keeping it where it is for approximately 5 years (I understand there is an opportunity cost however I'm not sure what I could invest in for 5 years without risking capital loss short of Certificates).

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Re: New to Bogleheads and Interested in Your Advice

Post by retiredjg » Mon Feb 01, 2016 6:19 am

mrmariner wrote:-I have been looking at things as different buckets of money. It may be smarter to look at it as a whole instead. My thoughts on this were that my taxable account is more for early retirement. If I plan on retiring earlier then I can't access my 401k and associated accounts.
A lot of people think this, but it is incorrect. Your last 401k/403b money is available if you retire in or after the year you reach 55. IRA money is available through a program called Substantially Equal Periodic Payments aka 72(t). And Roth contributions (not earnings) are available any time.

Another question.Would it make more sense to just skip bonds since I have so much in Certificates at the moment? I know lafder you say to not treat it as part of asset allocation, but isn't it technically?
I usually suggest keeping it separate as well, but considering your CD's to be your bond allocation does make sense in this situation.

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Re: New to Bogleheads and Interested in Your Advice

Post by celia » Mon Feb 01, 2016 8:19 am

This is incomplete, but I got lost in all your "stuff". First thing I did was delete any funds that have an ER over 0.02%. This is what I got:
mrmariner wrote:Currently have a taxable account with Betterment.

Ticker Fund Allocation ER
VTI Vanguard Total Stock Market 14.6% 0.05%
VTV Vanguard Large Cap Value 14.7% 0.09%
VOE Vanguard Mid Cap Value 4.7% 0.09%
VBR Vanguard Small Cap Value 4.1% 0.09%
VEA Vanguard Developed Markets 33.8% 0.09%
VWO Vanguard Emerging Markets 8.5% 0.15%

Portfolio consists of:
Defined Contribution Plan

Roughly $10,000 allocated to the moderate aggressive preset defined differently of course than my 401k:
Ticker Fund Allocation ER
VIPSX Vanguard Inflation Protected Securities Investor Class 2% 0.20%


Money Purchase Benefit Plan

Ticker Fund Allocation ER
VINIX Vanguard Institutional Class Index Fund 20% 0.04%
VIMAX Vanguard Mid-Cap Index Fund Admiral Class 10% 0.09%


Roth IRA

Roughly $7,800 account with betterment at 100% stock allocation.
Ticker Fund Allocation ER
VTI Vanguard Total Stock Market 17.6% 0.05%
VTV Vanguard Large Cap Value 17.6% 0.09%
VOE Vanguard Mid Cap Value 5.7% 0.09%
VBR Vanguard Small Cap Value 5% 0.09%
VEA Vanguard Developed Markets 40.8% 0.09%
VWO Vanguard Emerging Markets 13.3% 0.15%
This is useful to know, so I'll hold onto it for now:
Contributions
New annual Contributions
$18,000 401k (no employer match)
$5,500 Roth IRA
$4,000 (roughly) DC Plan
$1,400 (roughly) MPB Plan
$33,000 taxable obviously I won't be able to do this forever... I just have excess cash and incoming income with no bills for the rest of the year. (I make decent wages plus I'm an aggressive saver and live with my parents because I'm gone most of the year)

Available funds

Funds available in 401(k) and MPB
Ticker Fund ER
VINIX Vanguard Institutional Class Index Fund 0.04%
VIMAX Vanguard Mid-Cap Index Fund Admiral Class 0.09%

Funds available in DC Plan
Ticker Fund ER
VIPSX Vanguard Inflation Protected Securities Investor Class 0.20%
VINIX Vanguard Institutional Class Index Fund 0.04%
Starting with your desired Asset Allocation in your first question:
Fund Net Expense Ratio Description
RERFX 30% Foreign large cap (growth tilted)
DODGX 5% Domestic large cap value
MWTIX 20% Bonds (intermediate)
FREAX 5% Real estate fund
OAKIX 10% Foreign large cap (value tilted)
VINIX 20% Domestic large cap
VIMAX 10% Domestic mid cap
The thing that jumps out at me is that you have more than one foreign large cap fund and domestic large cap. It seems that your goal is:
40% Foreign large cap (Do you really want more foreign than domestic stocks?)
35% Total US Stock market Index
20% Bonds
5% Real estate fund

Now that you just about have your Asset Allocation, you can start selecting low-ER funds to fill up the various categories as best you can while taking tax considerations into account. Yes, This is just the first pass.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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Re: New to Bogleheads and Interested in Your Advice

Post by Lafder » Mon Feb 01, 2016 10:05 am

As far as "counting" the CDs in your AA, there are different arguments :)

Yes technically it is all your money and CDs will not drop in value so they buffer the overall value of portfolio against stock market drops.

But you know you want to spend that money on real estate, which does not "lose" the value, but makes the $ tied up in property, and removes it from your investing portfolio. Yes real estate is part of your net worth. But buying real estate ties the $ up in non stock/bond/cash investments.

To me one of the advantages of holding some bonds in the same account as stocks, is that in stock market crashes you have bonds to sell and then purchase stocks at a low price. Sure you can always sell a CD and buy stocks in a taxable account, but then you have spent your down payment money.

It used to really bug me to NOT think of my emergency funds in my AA. But now it makes sense to me to not count EF in my AA.

Perhaps another way to think about it, due to your large CD balance, consider being at the more aggressive range of AA in your investments with lower % bonds. But still do not count the CDs. If you do count the CDs in your AA, won't your majority holdings be bonds or cash, which is not what you want?

By not counting emergency funds or down payment money in your AA, it allows you to maintain your AA yet adjust your emergency fund or down payment money size as needed.

Think of the difference of these, but keep the total balance the same:
"I hold 4 years expenses cash (EF plus down payment for real estate) and have an AA of 80/20"
vs
"I hold 6 months expenses cash and have an AA of 60/40"

It is mental accounting since all of the money is yours however you hold it :) But by separating out the emergency fund and down payment money, you will mess with your investments less since they remain at your desired AA even as the EF or down payment money is spent, and you do not need to adjust your investments to a new AA when down payment $ is spent.

And, if you are holding a large down payment or EF and decide to move it to your long term investments "pile" you already know the AA you want to invest it at, the AA you have already chosen.

Hopefully my reasoning is making sense here :).

lafder

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Re: New to Bogleheads and Interested in Your Advice

Post by LadyGeek » Mon Feb 01, 2016 3:11 pm

FYI - New member gksaw is requesting help with his / her portfolio. I moved the post into a new thread: New to Bogleheads [Looking for advice]
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Re: New to Bogleheads and Interested in Your Advice

Post by mrmariner » Mon Feb 01, 2016 3:45 pm

-retiredjg
First of all retired jg as in lt jg? Just curious.
I knew Roth contributions were available. I was not aware of the 72t rule or the exception to the 401k rules (distributions after 55). I will have to explore this further and update my planning as appropriate. I have no idea how I missed that, but I do not recall reading that anywhere prior to you mentioning it. There is so much information out there! I wish I could absorb it all quicker. (I'm not skipping your comment on CD's see the next section).
-lafder
I can see about the different arguments, as I had mentioned and as retiredjg mentioned. On the flip side you do make a very good point about emergency funds and maintaining asset allocation. I do not want to have a majority asset allocation in cash. The only reason I scrimped and saved cash was so that I could get into real estate at some point. So really my asset allocation is more for my paper assets so to speak. Including those funds would definitely skew my asset allocation away from where I wanted and also make it more difficult to simplify my portfolio which was my main goal. If my real estate goals don't end up being a go I will move them into stocks and bonds and then they will become part of my asset allocation.
-celia
Thank you for your comment and I apologize for my long post and overly convoluted setup. When I first started my goal was set it and forget it. I never realized I would become this interested in investing to be honest. Then I realized how much the high cost funds would cost me in the long run. So I am going to take the advice offered here and move my roth and taxable to vanguard. I will use these funds to to round out the good low cost options in my retirement plan with total international, probably a small cap index to round out the largecap (VINIX) and midcap (VIMAX) options in my retirement plan and take exposure to real estate strictly through my own physical investments. I will also most likely decrease my international position slightly. I will update my investment policy to reflect this as well.

Thank you all for your comments and advice! It was very helpful for me to actually participate in a discussion about this as it helped me consolidate my goals and ideas into a much more manageable and coherent plan going forward. Since I'm not sure what I could offer this community any advice on investing in return I will say if anyone has any generic engineering questions regarding computers (building or troubleshooting hardware), electrical, HVAC, or the like feel free to message me privately and I will do my best to assist you (as long as I am in a country that has internet available). Thank you for your time and effort and I will continue to monitor any further posts but I feel that my questions have been answered sufficiently between this thread as well as various places on this site.

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Re: New to Bogleheads and Interested in Your Advice

Post by retiredjg » Mon Feb 01, 2016 4:49 pm

mrmariner wrote:First of all retired jg as in lt jg? Just curious.
No, none of that in my history. Not a retired judge either, as several have asked. :happy
I knew Roth contributions were available. I was not aware of the 72t rule or the exception to the 401k rules (distributions after 55). I will have to explore this further and update my planning as appropriate. I have no idea how I missed that, but I do not recall reading that anywhere prior to you mentioning it. There is so much information out there! I wish I could absorb it all quicker. (I'm not skipping your comment on CD's see the next section).
Most people do not seem to know about these things. In fact, it is rare that someone does. I don't know why. I didn't know when I retired either. Here's a current thread discussing it.

viewtopic.php?f=10&t=183576&newpost=2783956

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Re: New to Bogleheads and Interested in Your Advice

Post by investor1 » Mon Feb 01, 2016 6:34 pm

retiredjg wrote:Most people do not seem to know about these things. In fact, it is rare that someone does. I don't know why. I didn't know when I retired either. Here's a current thread discussing it.

viewtopic.php?f=10&t=183576&newpost=2783956
LOL it was your post that made me intrigued enough to start Google'ing around to find more info which lead me to that Reddit thread among other things.

:sharebeer

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Re: New to Bogleheads and Interested in Your Advice

Post by celia » Thu Feb 04, 2016 1:31 am

mrmariner wrote:Since I'm not sure what I could offer this community any advice on investing in return . . .
MrMariner, don't forget that you are a "new" member here for just a short time. Hang around and you will see other people join, many who know less than you do. Don't be shy about helping others. The worst that can happen is that you may give a poor response and others will (gently) correct you, so both you and the newest member will learn something. I'm known for making my share of mis-statements, but in doing so I often bring up an angle that no one else has mentioned. :happy
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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