Portolio and Approach Feedback

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tony_roach
Posts: 37
Joined: Sun Nov 19, 2017 2:05 pm

Portolio and Approach Feedback

Post by tony_roach » Wed Dec 06, 2017 12:31 am

Forum members hoping I get your feedback on my current progress, approach and allocation (wondering if I should increase bonds a bit more). Recently found the board and already got some good advice about converting my non-deductible Trad. IRA contributions to Roth IRA's (both his and hers). We've been fortunate to manage on a single salary but wife has recently re-started part time work.

Emergency fund: 3 months
No Credit Card or Car debt
Mortgage: 3.625% ~$323K (~$544K home value)
Tax Filing Status: MFJ
Marginal Tax Bracket: 28% Federal
State of Residence: PA
Age: 41

Total Portfolio: $599K + $43K in two PA529 Plans
Overall Asset Allocation (not counting PA529 plans): 69.5% US Stocks, 17.3% International, 11.8% Bonds, 1.4% Cash

401K: $449K 75% of portfolio (I'm maxing my annual contribution and I also get 100% employer match up to 6% starting in 2018)
FXAIX FID 500 Index (0.015%)
VSCPX Vanguard Small Cap (0.04%)
FSGGX FID Global XUS Index (0.06%)
Mellon Aggregate Bond Fund (0.0213%)

Only other low cost fund is Vanguard Target 2035 or 2040 (0.05%) but those were added recently and I'm comfortable with my 4 fund approach.

Taxable Account: $111K 18.5% of portfolio
Stocks and ITOT @0.03%

His IRA: $27,500 (will continue to max contribution) 4.5% of portfolio
$10K FSTVX
$10K FTIPX
$7,500 Cash

Her IRA: $11,000 (Maxing out moving forward) 2% of portfolio
$10K FSTVX
$1K Cash
Last edited by tony_roach on Sun Dec 31, 2017 8:25 pm, edited 2 times in total.

mhalley
Posts: 6064
Joined: Tue Nov 20, 2007 6:02 am

Re: Portolio and Approach Feedback

Post by mhalley » Wed Dec 06, 2017 2:14 am

At 41, yo are definitely very aggressive, but a target date fund would probably only have you at 10% bonds. AA is a very personal choice, depending on multiple factors. It would certainly not be unreasonable to increase bonds to at least 25- 30%.

tony_roach
Posts: 37
Joined: Sun Nov 19, 2017 2:05 pm

Re: Portolio and Approach Feedback

Post by tony_roach » Wed Dec 06, 2017 9:22 am

Thanks for the feedback. If you assume 2040 target date I'm not too far off from the bond allocation. When you look at the two Vanguard target date funds they have the following bond mix:

2035--21.2%
2040--13.7%

I would prefer to include equities in both Roth's (for growth) so I have a couple of options:

1. Direct all or most of my 401K contributions to bonds this year
2. Re-balance from 401K equities into bonds to up the overall allocation.

Any concerns if I move all of small cap into bonds or should I pull some from my S&P or a bit of both?

mega317
Posts: 2554
Joined: Tue Apr 19, 2016 10:55 am

Re: Portolio and Approach Feedback

Post by mega317 » Wed Dec 06, 2017 1:21 pm

Overall I think you're doing great. My own plan is to be 30% bonds when I'm your age, and I prefer at least 6 months emergency fund.

I would find it easier to rebalance now into what you want, and then direct future contributions at the desired ratio. But either way works.

Can you further explain your strategy of cash in the IRA? Why aren't you converting to Roth today?

And what are the stocks in taxable?

tony_roach
Posts: 37
Joined: Sun Nov 19, 2017 2:05 pm

Re: Portolio and Approach Feedback

Post by tony_roach » Fri Dec 15, 2017 1:33 pm

Mega,

It wasn't a strategy of keeping cash but I had to wait on a rollover to complete before converting from Trad IRA to a Roth IRA (my spouse IRA conversion has been completed).

As far as the taxable account here is the roster: QCOM, BMY, WFC, PFE, DIS, MO, PSX, AMGN, GM, GOOGL with also ITOT.

Moving forward I'm able to continue maxing out my 401K (my employer match also increase next year to 6%!!!)
Max out both IRA's and do conversions
I'll keep the stocks but will feed new taxable dollars into ITOT to avoid complexities.

tony_roach
Posts: 37
Joined: Sun Nov 19, 2017 2:05 pm

Re: Portolio and Approach Feedback

Post by tony_roach » Sun Dec 31, 2017 8:26 pm

Updated my allocation and portfolio now that my IRA conversions completed.

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