Paid off my student loans. 29 and looking for retirement/downpayment saving advice

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lionthens
Posts: 32
Joined: Tue Mar 12, 2013 6:23 am

Paid off my student loans. 29 and looking for retirement/downpayment saving advice

Post by lionthens » Sat Sep 23, 2017 8:28 am

I recently paid off the last of my student loans :sharebeer and am seeking advice for how to allocate funds among: my Roth, 401k, and saving towards a downpayment within 5 years. I live in Boston. Rent is very expensive (~$1800 for a 500sf studio apartment). I'm not convinced I can/will buy around metro Boston (<15 miles from the city) but want to begin saving towards this goal. I'm 29 and want some privacy, quiet and at least 0.25 acre of outdoor space.

Previous post is here.
Emergency fund is $5000.
Tax Filing Status: Single
Tax Rate: 25% Federal, 5.1% State
State of Residence: Massachusetts
Age: 29
Income: $80,000
Benefits: Company contributes amount equivalent of 8% of salary towards 401k (Fidelity), fully vested in 3yrs
Desired Asset allocation: 65% stocks / 35% bonds
Desired International allocation: ?% of stocks
Current total portfolio: 401k former job: $5000 in 3 fund portfolio of Schwab funds. It decreased due to unvested funds when I left.

New 401K current job: $1200
My current allocation is below. I'm uncomfortable with the allocation (all large/midcap US blend, want some bonds but unhappy with ER) and my trying to decide what else to add.
80% FID 500 INDEX INST (FXSIX) 0.035%
20% in FID EXT MKT IDX PR (FSEVX) 0.07%.

Below are my other options.
AM CENT OC 2020 R6 (ARBDX) 0.55%
AM CENT OC 2025 R6 (ARWDX) 0.57%
AM CENT OC 2030 R6 (ARCUX) 0.46%
AM CENT OC 2035 R6 (ARLDX) 0.58%
AM CENT OC 2040 R6 (ARDUX) 0.61%
AM CENT OC 2045 R6 (ARDOX) 0.63%
AM CENT OC 2050 R6 (ARFEX) 0.67%
AM CENT OC 2055 R6 (AREUX) 0.66%
AM CENT OC IN RTM R6 (ARDTX) 0.55%
STABLE VALUE FUND 0.24%
JPM CORE PLUS BND R6 (JCPUX) 0.43%
FID BALANCED K (FBAKX) 0.46%
VANG REIT INDEX ADM (VGSLX) 0.12%
OPP DEVELOPING MKT Y (ODVYX) 1.07%
AF EUROPAC GROWTH R6 (RERGX) 0.5%
VANG SM VAL IDX INST (VSIIX) 0.07%
FKLN SM CAP GRTH R6 (FSMLX) 0.65%
LD ABT VALUE OPPS I (LVOYX) 0.9%
FID LOW PRICED STK K (FLPKX) 0.78%
HTFD DIV & GRTH Y (HDGYX) 0.71%
COL LARGE CAP GRTH Z (GEGTX) 0.85%
AF FUNDMNTL INV R6 (RFNGX) 0.31%

My Roth is through Vanguard. My current allocation (~$5000) 100% Target Retirement 2030 (VTHRX). I plan to continue contributing to it until I surpass the minimum investment towards shares that make up the 3 fund portfolio. I need to read more in general and about the 4 fund version Vanguard recommends.

What I'm thinking: 2018: Contribute the max Roth, contribute the max 401k (minus anticipated company contribution), save any towards downpayment in high-yield savings account. 2019-2023. Max Roth, contribute 10% towards 401k, rest to high yield savings account. Thoughts? What other ways to save towards a downpayment are worth exploring?

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KlingKlang
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Joined: Wed Oct 16, 2013 3:26 pm

Re: Paid off my student loans. 29 and looking for retirement/downpayment saving advice

Post by KlingKlang » Sat Sep 23, 2017 8:50 am

Take a look at your old 401(k), new 401(k), and Roth IRA to determine what the asset allocation for all of your combined assets is and how much it differs from your desired asset allocation.

Check out the stable value fund available in your 401(k). The expense ratio isn't too bad, if it yields more than 2.5% it would be a good alternative to a bond fund.

As far as your 5 year down payment savings you could get some Series I Savings Bonds, but you are limited to $10K/year in purchases plus your Federal income tax refund. For the rest you are probably limited to bank CDs and "high-yield" savings accounts.

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

Re: Paid off my student loans. 29 and looking for retirement/downpayment saving advice

Post by livesoft » Sat Sep 23, 2017 8:57 am

lionthens wrote:
Sat Sep 23, 2017 8:28 am
,,,, contribute the max 401k (minus anticipated company contribution),
Your max legal 401(k) contribution is unaffected by any company contribution, so your "minus" can be changed to "plus."
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LadyGeek
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Re: Paid off my student loans. 29 and looking for retirement/downpayment saving advice

Post by LadyGeek » Sat Sep 23, 2017 8:59 am

This thread is now in the Investing - Help with Personal Investments forum.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

mega317
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Joined: Tue Apr 19, 2016 10:55 am

Re: Paid off my student loans. 29 and looking for retirement/downpayment saving advice

Post by mega317 » Sat Sep 23, 2017 4:12 pm

Let me try reframing just to see how it strikes you. Your plan is to decrease 401k contributions from 18k to 8k for 5 years. You will save an additional 10k/yr minus 30% taxes, so $35k.
lionthens wrote:
Sat Sep 23, 2017 8:28 am
What other ways to save towards a downpayment are worth exploring?
Spend less.

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