ready for the 3 fund portfolio

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monty
Posts: 3
Joined: Fri Feb 24, 2017 9:20 am

ready for the 3 fund portfolio

Postby monty » Sun Mar 19, 2017 11:49 am

I recently sold all non Vanguard funds and I'm getting ready to move the money into a Vanguard Admiral 3 fund portfolio. I did have Vanguard make a plan for me and it just turned out to be the same as what I'm planning except they also had a fourth fund-International Bonds and I'm not interested in that at all.


Emergency funds: Three to four years of living expenses
Debt: none
Tax Filing Status: Married Filing Jointly
Tax Rate: 15% Federal, 7% State
State of Residence:MN
Age:63
Desired Asset allocation: 50% stocks / 50% bonds
Desired International allocation: 20% of stock

His tIRA $481k
His Roth $36

Her tIRA $700k
Her Roth $3k

We will be rolling $43k(less taxes) to Her Roth. We are moving such a small amount, because we are getting healthcare subsidies and will start rolling more to Roth's after we are on Medicare. We will be delaying ss until 70 will probably need to withdraw approx. $40k/yr for about 5 years(maybe more if we decide to splurge on something).

1-Since the Roth's are such small amounts, should they be invested in just one or two funds or should the also be 3 fund portfolio's?

2-Does the 20% international stock allocation make sense?

Thanks
Jeff

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Duckie
Posts: 4673
Joined: Thu Mar 08, 2007 2:55 pm

Re: ready for the 3 fund portfolio

Postby Duckie » Sun Mar 19, 2017 8:10 pm

monty, welcome to the forum.

monty wrote:We will be rolling $43k(less taxes) to Her Roth.

So you're going to pay the taxes on the conversions out of the IRA instead of paying from other assets?

Since the Roth's are such small amounts, should they be invested in just one or two funds or should the also be 3 fund portfolio's?

Just one fund.

Does the 20% international stock allocation make sense?

Vanguard has found between 20% and 40% of stocks in international to be the "sweet spot". See the Vanguard paper link and the discussion. So 20% is reasonable. Just be aware that's 20% of 50% so it's really only 10% of your portfolio.


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