Allocation help

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apw
Posts: 2
Joined: Tue Apr 25, 2017 6:58 pm

Allocation help

Post by apw » Thu Apr 27, 2017 6:16 pm

Hi All,

I’ve been learning a lot from reading the Bogleheads forum and wikis. I’m getting the ball rolling on moving my retirement accounts into a 3-fund portfolio. Below are my details, and proposed distributions. I was hoping for some feedback.

The values of Vanguard accounts are such that I can have admiral shares of two funds in the Rollover IRA, and admiral shares of a single fund in the Roth. With that in mind, where is the right place to have international stock funds?

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Emergency funds: Cash in savings account (~6 months and still contributing $200/month) and physical bullion (~6months)
Debt: house payments – 4 years of payments to go.
Tax Filing Status: Married Filing Separately
Tax Rate: 28% Federal bracket, No State
State of Residence: Fl
Age: 36
Desired Asset allocation: 60% stocks / 40% bonds
Desired International allocation: 15-20% of stocks


Current total portfolio: Between 50k – 75K,


Simple IRA at MainStay
(Current employers retirement plan - Contributing $400/month. Employee match $200/month)
3.5% - MainStay S&P 500 Index Fund Inv – MSXAX – 0.84% ER
3.5 % MainStay Indexed Bond Fund Inv - MIXNX – 0.98% ER


401K at Fidelity
(Former employer’s retirement plan. Not making contributions to this account)
14.9% - Vanguard Institutional Index Fund Institutional Shares –VINIX – 0.04% ER
19.9% - Vanguard Total Bond Market Index Fund Institutional Shares –VBTIX - 0.05% ER
3.3% - Fidelity Global ex U.S. Index Fund - Institutional Class – FSGSX – 0.09% ER


Rollover IRA at Vanguard
(Contributing $200/month)
21.3% - Vanguard Total Stock Market Index Fund Admiral Shares – VTSAX – 0.05% ER
17.4% - Vanguard Total International Stock Index Fund Admiral Shares – VTIAX – 0.11 ER


Roth IRA at Vanguard
(Contributing $200/month)
21.2% - Vanguard Total Bond Market Index Fund Admiral Shares - VBTLX


These allocations sum to:
Domestic Stock at % 39.7
International Stock % 20.7
Domestic Bonds % 39.6

Elbowman
Posts: 494
Joined: Tue Apr 03, 2012 2:25 pm

Re: Allocation help

Post by Elbowman » Thu Apr 27, 2017 7:16 pm

Looks pretty good! You can buy ETF versions of the funds if you don't have enough to get admiral shares.

lazylarry
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Re: Allocation help

Post by lazylarry » Thu Apr 27, 2017 8:42 pm

-noting that you are quite risk-averse - 60/40 is commonly used AT retirement age
-FYI bonds are less tax efficient in the Roth IRA. Might wanna swap these out for equities and switch into more bonds in your SIMPLE.
-your bond allocation is actually probably higher than 40% b/c most is in post-tax account - the other pre-tax accounts value will be taxed.
-would go with the ETF for internationals in your Roth IRA if you don't have enough for VGTSX or could go with MF if you do have enough. Don't worry about Admiral shares, doesn't matter at such low sums of money really. As you contribute more, you will easily fill up admiral shares bucket.
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Tyler Aspect
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Re: Allocation help

Post by Tyler Aspect » Fri Apr 28, 2017 1:24 am

The right location for international stock is in the taxable account or the Roth IRA account.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

Elbowman
Posts: 494
Joined: Tue Apr 03, 2012 2:25 pm

Re: Allocation help

Post by Elbowman » Fri Apr 28, 2017 10:07 am

lazylarry wrote:-FYI bonds are less tax efficient in the Roth IRA. Might wanna swap these out for equities and switch into more bonds in your SIMPLE.
Why is this the case? I have a feeling you are referring to the fact that equities will likely grow faster than bonds, so you will play less taxes with equities in the Roth. However, I think that is less commonly thought of as tax efficiency and more commonly though of as a higher effective equity allocation, which has higher risk and (expected) reward.

apw
Posts: 2
Joined: Tue Apr 25, 2017 6:58 pm

Re: Allocation help

Post by apw » Sun Apr 30, 2017 11:14 am

Thanks for all the helpful comments.

I’ll look into holding international stocks in the Roth as suggested by Tyler Aspect and lazylarry.
Though admittedly, my understanding of taxes in general, and tax efficient investing specifically is very much lacking.

My portfolio is quite conservative at 60/40. I’m willing to accept a distribution up to 70/30…but the 90/10 ratio that my previous “target retirement date” funds had is outside my comfort zone.

Off to the wikis and to play with my excel files some more…

Thanks again!

apw

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