New 401k Plan - Appreciate the help!

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
psuh528
Posts: 5
Joined: Mon Jan 23, 2017 1:39 pm

New 401k Plan - Appreciate the help!

Post by psuh528 » Mon Nov 13, 2017 5:39 pm

Emergency funds: Six months of expenses
Debt: Home mortgage of $530K at 3.625%, home value is $850K.
Tax Filing Status: Married Filing Jointly with one dependent
Tax Rate: 28% Federal, 9.3% State
Income: $155K
State of Residence: CA
Age:34; Wife:33
Desired Asset allocation: 85% stocks / 15% bonds
Desired International allocation: 28% of stocks

Current retirement assets:

His 401k
19.7% State Street S&P 500 Index Securities Lending Series Fund (N/A) (0.7%)
4% Company Match

His Roth IRA at Vanguard
4.4% Vanguard REIT Index Fund Investor Shares (VGSIX) (0.26%)
4.3% Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) (0.15%)

His Rollover IRA at Vanguard
20.4% Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (0.11%)
14.8% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%))

Her Rollover IRA at Vanguard
14.9% Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (0.05%)
21.5% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)

Contributions
Maxed out 401k
Maxed out his Roth IRA

New annual Contributions
$18,000 his 401k (4% Company Match)
$5,500 his IRA/Roth IRA
$5,500 her IRA/Roth IRA

Funds available in his new 401(k) plan
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)
Vanguard 500 Index Fund Admiral Shares (VFIAX) (0.04%)
Vanguard Growth Index Fund Admiral Shares (VIGAX) (0.06%)
Vanguard Value Index Fund Admiral Shares (VVIAX) (0.06%)
Vanguard Equity-Income Fund Admiral Shares (VEIRX) (0.17%)
Vanguard FTSE Social Index Fund Investor Shares (VFTSX) (0.2%)
American Funds The Growth Fund of America Class R-6 (RGAGX) (0.33%)
TIAA-CREF Social Choice Equity Fund Premier Class (TRPSX) (0.34%)
Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) (0.06%)
Vanguard Mid-Cap Value Index Fund Admiral Shares (VMVAX) (0.07%)
Vanguard Extended Market Index Fund Admiral Shares (VEXAX) (0.08%)
Vanguard Small Cap Value Index Fund Admiral Shares (VSIAX) (0.07%)
Vanguard Tax-Managed Small Cap Fund Admiral Shares (VTMSX) (0.09%)
Vanguard Strategic Small-Cap Equity Fund Investor Shares (VSTCX) (0.29%)
Vanguard Developed Markets Index Fund Admiral Shares (VTMGX) (0.07%)
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (0.11%)
DFA Large Cap International Portfolio Institutional Class (DFALX) (0.28%)
Vanguard Emerging Markets Stock Index Fund Admiral Shares (VEMAX) (0.14%)
Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (0.05%)
Vanguard Long-Term Government Bond Index Fund Admiral Shares (VLGSX) (0.07%)
Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares (VTAPX) (0.07%)
Vanguard Inflation-Protected Securities Fund Admiral Shares (VAIPX) (0.1%)
Vanguard Short-Term Federal Fund Admiral Shares (VSGDX) (0.1%)
Vanguard GNMA Fund Admiral Shares (VFIJX) (0.11%)
Vanguard Short-Term Corporate Bond Index Fund Admiral Shares (VSCSX) (0.07%)
Vanguard Short-Term Investment-Grade Fund Admiral Shares (VFSUX) (0.1%)
DFA Intermediate-Term Extended Quality Portfolio Institutional Class Shares (DFTEX) (0.22%)
Vanguard Total International Bond Index Fund Admiral Shares (VTABX) (0.12%)
DFA World ex U.S. Government Fixed Income Portfolio Institutional Class Shares (DWFIX) (0.22%)
Vanguard REIT Index Fund Admiral Shares (VGSLX) (0.12%)
DFA Real Estate Securities Portfolio Institutional Class (DFREX) (0.18%)
DFA Global Real Estate Securities Portfolio (DFGEX) (0.24%)
Vanguard Federal Money Market Fund Investor Shares (VMFXX) (0.11%)

Questions:
1. My company is switching to a new 401k plan soon and I wanted to get some fund recommendations. My current 401k plan has funds with high expense ratios so I went with the S&P 500 index fund as it was the lowest at ER 0.7%.
2. Should I consider moving money from my rollover ira to my new 401k plan in case I need to do a backdoor roth next year?
3. I have also started a side business (LLC-non spouse partnership) this year and will bring in an extra income of $40K-$50K. Would I be eligible to make employer contributions to a SEP IRA?

Thanks in advance for the help and advice.

gostars
Posts: 21
Joined: Mon Oct 09, 2017 7:53 pm

Re: New 401k Plan - Appreciate the help!

Post by gostars » Mon Nov 13, 2017 11:30 pm

You've basically hit the mother lode with those fund choices. Stay the course with a mostly three-fund portfolio (VTSAX/VTIAX/VBTLX) and consider swapping the VGSIX in the Roth for VGSLX in the 401k, especially if that gives you enough in the Roth to swap into VTSAX. I would transfer the rollover into the 401(k) unless there's some compelling reason not to (e.g. AUM fees).

Post Reply