Hope I am doing this correctly ;)

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steamd
Posts: 10
Joined: Sun Nov 12, 2017 2:45 pm

Hope I am doing this correctly ;)

Post by steamd » Sun Nov 12, 2017 4:20 pm

<t>Good afternoon. I currently have my funds in a managed account with Charles Schwab. I m very tired of paying 1% each year for the management fee<br/>
and would like to add to my current Vanguard account. I am just a deer in headlights and so afraid I will mess things up. Am so thankful for your site and all the folks that are willing to give their opinions. Thank you so much!!! I will provide as much info as possible. If you need me to provide more, please let me know.<br/>
<br/>
<br/>
Emergency funds: $25K<br/>
Debt: No debt. Home is paid for, cars are getting older. Do have access to a home equity account<br/>
Tax Filing Status: Head of Household through 2019 with 1 dependent<br/>
Tax Rate: right now it is minimal<br/>
State of Residence:Illinois<br/>
Age:59<br/>
Desired Asset allocation: 65% stocks / 35% bonds<br/>
Desired International allocation: 20% of stocks<br/>
<br/>
asset class: Large-Cap Growth 4.58, Large-Cap Value 16.94, Small-Cap Value 10.29, Intl Developed Mkts 3.71, Intl Large Cap 3.04, Intl large Cap Value 3.52, Intl Small Cap 1.74, Intl Small Cap Value 3.25, Large Cap 9.05, Small Cap 5.54, Intermediate Bond 13.03, Short Bond 20.01, Cash .53, REITS 4.78<br/>
The above is all in Charles Schwab. I do have add'l info regarding each fund(i.e, American funds, DFA...) I also have funds in Vanguard. The breakdown is: Star Fund 33, Total Intl Bond 1x Investor 2, Total Intl Stock 1x Admiral 3, Total Bond Market Index Admiral #, Total Stock Market Index Adm 28, Wellesley Income Fund Adm 31% Above are the Vanguard Funds Are these what you are asking for?

There is about 1.867m in Charles Schwab and 359K in Vanguard within the Charles Schwab total, 225K are IRA's

Charles Schwab breakdown is as follows
Large Cap Growth American Funds AMCAP F1 AMPFX 4.49%
Large Cap Value Amer Funds Wash Mutual WSHFX 2.97%
DFA Tax-Managed US Marketwide value DTMMX 9.50%
DFA US Large Cap Value DFLVX 1.26%
Dodge & Cox Stock DODGX 3.02%
Small-Cap Value DFA Tax Managed US Targeted Value DTMVX 9.08%
DFA US Small Cap Value l DFSVX .33%
REITS DFA Int'l RE Sec 1 DFITX 1.77%
DFA RE Securities l DFREX 3.10%
Int'l Developed Mkts American Funds Europacific Growth F1 AEGFX 3.59%
Intermediate Bond DFA Investment Grade l DFAPX 13.43%
Short Bond DFA One Tear Fixed Income l DFIHX 13.80%
DFA Short Durtion Real Return Instl DFAIX 3.35%
DFA Short Term Extended Quality l DFEQX 3.12%
Int'l Large Cap DFA Large Cap Int'l l DFALX 2.98%
Int'l Large Cap Value DFA Int'l Value l DFIVX .27%
DFA Tax Managed Int'l Value DTMIX 3.38%
Int'l Small Cap DFA Int'l Small Co l DFISX
Int'l Small Cap Value DFA Int'l Small Cap Value l DISVX 3.47%
Large Cap DFA Tax Managed US Eq DTMEX 7.57%
DFA US Large Co l DFUSX 2.06%
Small Cap DFA Tax Managed US Small Ca DFTSX 4.82%
DFA US Small Cap l DFSTX .31


Contributions--No longer working--no additional contributions. I have been reinvesting all dividends and capital gains, but just asked to have those deposited to y checking account.

The only other issue is qualifying for Obamacare over the next 5 years. I need dividends and capital gains so that I have some income but don't want to be over about 38K.

My question is:--I want to transfer these monies into Vanguard. Probably index funds??? but not sure. Was wondering if I can just transfer everything to Vanguard without creating any type of tax situation. I see for the IRA's I can do a broker to broker transfer. If you need more info please let me know. Basically I am looking for suggestions on what to do. The bottom line is that I don't expect to use that much of the funds. They are really meant for my kids and I am so fearful of making a huge mistake. Thanks again for your time Michelle
Last edited by steamd on Mon Nov 13, 2017 7:09 pm, edited 1 time in total.

pkcrafter
Posts: 13013
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Re: Hope I am doing this correctly ;)

Post by pkcrafter » Sun Nov 12, 2017 10:13 pm

Welcome Michelle,

Please list all funds at Schwab with name and ticker symbol. List by account type--taxable and IRA.

What kind of account do you have at Vanguard?

You can edit your first post by clicking on the pencil in the top right corner.

thanks,

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Watty
Posts: 13833
Joined: Wed Oct 10, 2007 3:55 pm

Re: Hope I am doing this correctly ;)

Post by Watty » Sun Nov 12, 2017 10:24 pm

chAabw wrote:
Sun Nov 12, 2017 4:20 pm
My question is:--I want to transfer these monies into Vanguard. Probably index funds??? but not sure. Was wondering if I can just transfer everything to Vanguard without creating any type of tax situation. I see for the IRA's I can do a broker to broker transfer.
If you want to transfer to Vanguard you can call up Vanguard and they will walk you through the process of transferring the investments.

If the money is in retirement accounts there are no tax considerations in transferring them to a Vanguard retirement account.

If they are in taxable accounts then you can do a "transfer in kind" to transfer the ETF's without selling them so you would not have any tax problems but you would want to make sure that you have good records of your cost basis since you will need that when you sell the ETF's some day.

Vanguard has a personal advisory service that only charges 0.3% a year and you could use them for a year or two to get your situation to the point where you feel more comfortable managing it yourself. You could then stop paying that fee.

Every situation is different but but when I retired most of my money was in retirement accounts so I just moved most of my funds into a target date fund but that would not work well in a taxable account because of tax issues.
chAabw wrote:
Sun Nov 12, 2017 4:20 pm
Tax Rate: right now it is minimal
It would be worth considering doing Roth conversions up to the top of the 15% federal tax bracket but depending on the rest of your details it may or may not make sense.

steamd
Posts: 10
Joined: Sun Nov 12, 2017 2:45 pm

Re: Hope I am doing this correctly ;)

Post by steamd » Mon Nov 13, 2017 6:35 pm

Thanks for the info. .3% is much less than what I am currently paying

delamer
Posts: 5819
Joined: Tue Feb 08, 2011 6:13 pm

Re: Hope I am doing this correctly ;)

Post by delamer » Mon Nov 13, 2017 7:38 pm

Suggest you read one or two of the recommended books in the wiki on investing: https://www.bogleheads.org/RecommendedReading.php

There is no reason that you need to have so many funds in the Schwab account, as will become clear once you do the reading.

For funds in an IRA, you can sell without any tax consequences. For funds in a taxable account, you will pay income taxes on any profits so you need a plan to minimize the tax consequences.

krow36
Posts: 1816
Joined: Fri Jan 30, 2015 6:05 pm
Location: WA

Re: Hope I am doing this correctly ;)

Post by krow36 » Mon Nov 13, 2017 9:05 pm

So the Schwab portfolio includes a taxable account and also a IRA or retirement account? It would be very helpful if you used Laura’s format for asking questions: Asking Portfolio Questions template
The taxable account is the challenge and needs to be separated out of the total. They have put you in way too many funds, and I think your idea to use a few index funds instead is a good one. I guess you realize that you can drop your advisor and the 1% fee and then use Schwab’s low-cost index funds at Schwab?

Each fund in your taxable account has a capital gain or loss and you need to find out those numbers from Schwab. They may be available on your internet statement. If funds have cap gains, those gains are taxable when you sell it. Any funds with cap losses can be sold and the losses will balance the gains of other funds. The cap gains tax rate is 0% in the 15% tax bracket, and 15% in the 25% bracket. To find your bracket, find your “taxable income” on line 43 of the Form 1040 and look up the brackets here: http://www.moneychimp.com/features/tax_brackets.htm It’s possible you can sell some funds each year and stay in the 15% bracket and avoid any tax on cap gains?

Schwab shouldn't charge you a fee to sell a fund, but Vanguard does charge to sell non-Vanguard funds. So it makes sense to sell a fund at Schwab, if you need to sell it. You can ask Vanguard if the DFA etc. funds can be transferred to them. If they can be transferred, I don’t think you can add to them, so all dividends and capital gain distributions would go to the Vanguard index funds. Most of the DFA funds have expense ratios from 0.20% to 0.40%, which is low but about double or more than Vanguard’s index funds. I think you would be better off using a few Vanguard (or Schwab?) very low-cost index funds rather than the DFA funds.

steamd
Posts: 10
Joined: Sun Nov 12, 2017 2:45 pm

Re: Hope I am doing this correctly ;)

Post by steamd » Tue Nov 14, 2017 1:25 am

Thanks to everyone for your help and insight. I appreciate all of your time. Have a great night.

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ruralavalon
Posts: 13737
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Hope I am doing this correctly ;)

Post by ruralavalon » Fri Dec 01, 2017 10:25 am

Welcome to the forum :)


Asset allocation.
chAabw wrote:
Sun Nov 12, 2017 4:20 pm
Age:59<br/>
Desired Asset allocation: 65% stocks / 35% bonds<br/>
Desired International allocation: 20% of stocks<br/>
<br/>
At age 59 I suggest about 40% in bonds. This is expected to substantially reduce volatility (risk), with a comparatively modest slight decrease in return. Graph, "An Efficient Frontier: the power of diversification". Please see the wiki articles Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk", and "Asset allocation".

I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities". Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). You can find lots of debate here on international allocation, opinions rangeing all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box (upper right, this page).

Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.



Tax bracket.
chAabw wrote:
Sun Nov 12, 2017 4:20 pm
tax Rate: right now it is minimal<br/>
State of Residence:Illinois<br/>
Here are calculators you can use to determine your federal tax bracket. First determine your "taxable income". money chimp, "Tax Calculator". Then use your "taxable income" to determine your "tax bracket". moneychimp, "Federal Tax Brackets".


Accounts and investments.
Please list each account separately, and under each account list the investments in that account.

In listing the funds in each account please give fund names, tickers and expense ratios? Please see this for format: "Asking Portfolio Questions". You can simply add this to your original post using the edit button, so that all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Qoheleth80
Posts: 2
Joined: Mon Dec 19, 2016 8:10 pm

Re: Hope I am doing this correctly ;)

Post by Qoheleth80 » Fri Dec 22, 2017 1:44 pm

krow36 wrote:
Mon Nov 13, 2017 9:05 pm
If they can be transferred, I don’t think you can add to them, so all dividends and capital gain distributions would go to the Vanguard index funds. Most of the DFA funds have expense ratios from 0.20% to 0.40%, which is low but about double or more than Vanguard’s index funds. I think you would be better off using a few Vanguard (or Schwab?) very low-cost index funds rather than the DFA funds.
Strictly speaking this part is not accurate although the rest is totally correct. You can't make new direct contributions to DFA funds held at Vanguard but capital gains and dividends CAN be reinvested into the funds that generated them with no transaction fee. How do I know this? I hold 6 DFA funds at Vanguard.

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