Portfolio Help: I think I can do better

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spoco79
Posts: 21
Joined: Tue May 03, 2016 8:59 am

Portfolio Help: I think I can do better

Postby spoco79 » Sun Mar 19, 2017 8:49 pm

I'm okay with where I am right now, but I think I can be better. Have started to read a ton of books that should help, but the collective wisdom of this forum is hard to beat.

College professor, age 37
Wife, SAHM, age 36

Salary: $105k
IRA: 8% dollar for dollar match, but its limited (TIAA)
No debt except mortgage, $255k at 3.675%. (About $90k in equity).

Good income in one of nation's lowest cost of income states.

TIAA-CREF: $93k (75k in Lifestyle 2045, 18k in Lifestyle 2050)

529 for six year old: $8k (with current or similar employment, college tuition will be free at around 700 private universities (Tuition Exchange), but we will be responsible for all other expenses)

Taxable: $36k in Wealthfront
Cant get my exact holdings, but:
35% in US Stocks
24% in International
18% in Emerging Markets
9% in Dividends
5% in Natural Resources
9% in Bonds
Rest in Cash

Savings: $7k in 1.05% online savings account

Dottie57
Posts: 1518
Joined: Thu May 19, 2016 5:43 pm

Re: Portfolio Help: I think I can do better

Postby Dottie57 » Sun Mar 19, 2017 9:05 pm

OP,

I think you have a 401k with match and not an IRA with match. Start contributing 18k to your 401k -it is a great tax shelter.
You will be happier at retirement. If you can't do it all this year, ramp up over a 3or 4 year period.

Read about the 3 fund portfolio in the wiki. Great suggestions for funds.

Good luck.

Alto Astral
Posts: 650
Joined: Thu Oct 08, 2009 10:47 am

Re: Portfolio Help: I think I can do better

Postby Alto Astral » Sun Mar 19, 2017 9:11 pm

Lifestyle is fine if your amounts are lower but I would recommend individual funds at your level. A 2-fund portfolio of 80/20 would keep it simple. Increase your bonds from 9 to 20%. I've skipped international myself but you can stay at 20%.
You can skip these:
18% in Emerging Markets
9% in Dividends
5% in Natural Resources

You could also skip the 529 since your kids will get the tuition match. They should be able to take care of dorms, food etc.

aristotelian
Posts: 1870
Joined: Wed Jan 11, 2017 8:05 pm

Re: Portfolio Help: I think I can do better

Postby aristotelian » Sun Mar 19, 2017 9:18 pm

Is your "IRA" an employer plan? It should be 403b or something similar if you are a professor, not an IRA.

In addition to your employer plan, you and your wife should both open IRA's to get additional tax benefits. I would do Roth for now on the assumption that your tax bracket will be increasing, especially if your wife goes back to work.

You probably don't want to have bonds in taxable unless they are municipal bonds.

livesoft
Posts: 55087
Joined: Thu Mar 01, 2007 8:00 pm

Re: Portfolio Help: I think I can do better

Postby livesoft » Sun Mar 19, 2017 9:22 pm

Your investment choices seem fine. I think the only way to do better is to save more money and reduce expenses and taxes. I wouldn't use Wealthfront at all, but would just invest in taxable in a Vanguard Total index fund … either US or International or both.
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Grt2bOutdoors
Posts: 16169
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Portfolio Help: I think I can do better

Postby Grt2bOutdoors » Sun Mar 19, 2017 9:24 pm

How much is Wealthfront costing you to set up that elaborate portfolio? The site says 0.25%.
How would you like to do it all for less than 0.20% including the fund fees? and you don't need to hold 7 different funds to do it. You can do it with 3 funds - Total Stock Market, Total International and Total Bond or Intermediate Tax Exempt. A portfolio that is 56/24/20 (Total Stock/Total Intl/Fixed income) or 49/21/30 (same applies here) would work just as well for long term wealth accumulation.

Saving for room and board? Using Vanguard college planner, assuming you want to pay 100% of other expenses or close to it, you could save $200-$250 a month in a 529 plan (using a 5% growth rate for returns and 4% for room and board expenses) and accumulate nearly $80,000 around the time school rolls around to pick up those expenses, if you desire.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions


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