Starting From Scratch - Advice needed

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Topic Author
amucaze
Posts: 8
Joined: Sun Aug 07, 2016 4:20 pm

Starting From Scratch - Advice needed

Post by amucaze » Sun Aug 07, 2016 5:52 pm

Hi Bogleheads!

We're just starting out in the USA and need advice on investments. We plan to be here for the long haul and intend to retire in the US eventually. I have been reading all the wonderful materials you have on the wiki and have come up with the following plan. I'd really appreciate any comments on the plan and help with:
  • Does this seem well balanced?
  • Is there a better configuration for my spouses 401K?
  • Does it make sense to put the majority of our bonds in Vanguard Total Bond Market or should we diversify?
  • Is it worth doing the Roth backdoor conversion (the math suggests yes, but the whole process seems strange to me)?
  • Is there a better place to put the house downpayment?
Basics

Emergency funds: 6 months (achieved)
Debt: None
Tax status: Married, filing jointly
State: CA
Age: 30
Annual outgoings: < $100,000
Annual investable money: ~ $100,00
Desired asset allocation: 70% stocks, 30% bonds
Desired international allocation: 40 - 50% of stocks
Investment style: Not that aggressive, but interested in pushing myself

Goals

Purchase a home within the next 2 years ($150,000 downpayment)
Retire at 70 (40 years, 2056) with > $2 millon for both myself and spouse

Current Retirement Assets

$5,800 in my 401K
Currently 81%index 500, 4%mid, 15%small cap Vanguard funds (more details below)

Possible Choices

My 401K funds (some employer contribution): http://pastebin.com/SWpRbtFe
Spouse 401K funds (no employer contribution): http://pastebin.com/dTuU3Eaj

Planned Investment Plan - end of 2016 view

GS Bank @ 1.05% APR (For house downpayment)
$100,000

My Trad(?) IRA at Vanguard (Maxed)
100% Vanguard Total Bond Market (VBMFX) (0.16%)

Spouse Trad(?) IRA at Vanguard (Maxed)
100% Vanguard Total Bond Market (VBMFX) (0.16%)

My 401K (Maxed)
64.80% Vanguard 500 Index Admiral (VFIAX) (0.05%)
3.20% Vanguard Mid Cap Index Adm (VIMAX) (0.09%)
12% Vanguard Small Cap Index Adm (VSMAX) (0.09%)
20% DFA Intermediate Govt Fixed-Income I (DFIGX) (0.12%)
Note - Follows: https://www.bogleheads.org/wiki/Approxi ... ock_market

Spouse 401K (Maxed)
80% Vanguard International Growth Inv (VWIGX) (0.47%)
20% Columbia Large Cap Index Fund (NINDX) (0.20%)

Taxable Joint Account at Vanguard (~$40,000)
35% Vanguard Total Stock Market (VTSMX) (0.16%)
35% Vanguard Total International (VGTSX) (0.19%)
30% Vanguard Total Bond Market (VBMFX) (0.16%)

End of 2017 view
Same allocations, tax advantaged maxed out, less added to taxable than in 2016, house downpayment goal closer.

Final Asset Allocation

Tax Advanted
38% US Stock
31% Intl Stock
31% Bonds

Taxable
35% US Stock
35% Intl Stock
30% Bonds

Thanks!

Jack FFR1846
Posts: 10454
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Starting From Scratch - Advice needed

Post by Jack FFR1846 » Sun Aug 07, 2016 6:46 pm

My only observation is that your taxable at Vanguard could be in Admiral shares to save ER. You need only $10k to satisfy the min in each fund and you have that.
Bogle: Smart Beta is stupid

Topic Author
amucaze
Posts: 8
Joined: Sun Aug 07, 2016 4:20 pm

Re: Starting From Scratch - Advice needed

Post by amucaze » Mon Aug 08, 2016 10:45 pm

Thanks Jack - that makes sense! Now that I know about Admiral funds, I guess next year I'll convert the roth funds to be the Admiral versions of the bond funds.

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