Seeking help for cousins Vanguard accounts

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slimshady
Posts: 66
Joined: Sun Aug 12, 2012 8:48 am

Seeking help for cousins Vanguard accounts

Post by slimshady » Fri Jan 12, 2018 7:26 pm

Hello everyone.

My cousin is in the process of transferring 4 TIRAs, a profit sharing plan, a brokerage account and a beneficiary IRA to VG. (After 4 years, he decided to finally make the move based on discussions around the dinner table). The total value of the assets is approximately $ 550K.

When the transfer is complete, he will have a VG brokerage account, a single traditional IRA and a Beneficiary IRA. (The VG rep stated that the profit sharing plan would be closed and a check would be made to VG and held in a money market fund until a decision is made as to what to do with the funds).

The beneficiary IRA pays a yearly distribution to my cousin. I suggested that the distribution be used to fund his yearly IRA contribution.

Once transferred and certain securities are sold, the brokerage account will include 3-5 individual securities valued between $45-65K. I suggested VG Total Stock Market and VG Total International Stock Market for the remainder of the balance, approx $70K. (My cousin desires to keep the securities....at least for now).

My question is-- how should a 3 fund portfolio be set up across these 3 accounts??

The TIRA will have a balance of $165K
The Beneficiary IRA will have a balance of $250K
The brokerage account will have a balance of $135K.

My cousin plans to max out his current $401K as well as the above.

Either Lifestrategy Funds/Target Retirement Funds in the IRAs and Total Stock/Total International plus a handful of individual securities in the brokerage account???
He is interested in going with a 70/30 AA with 30% in International. ($385K total equity, $165K bond, $115K in International).

Perhaps going with Total Stock, Total International and Total Bond in the IRAs?? Possibly mirroring AA in both the IRAs?? Not sure what will be best and easiest to maintain as time goes on.....he understands the importance of rebalancing with either new 401K contributions/ selling or buying in the TIRA to avoid tax implications...

Thanks for any suggestions.....

Rich.
Last edited by slimshady on Sat Jan 20, 2018 10:47 am, edited 2 times in total.

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Watty
Posts: 13092
Joined: Wed Oct 10, 2007 3:55 pm

Re: Seeking help for cousins Vanguard accounts

Post by Watty » Sat Jan 13, 2018 6:37 pm

slimshady wrote:
Fri Jan 12, 2018 7:26 pm
My question is-- how should a 3 fund portfolio be set up across these 3 accounts??
A couple of wikis that might help.

https://www.bogleheads.org/wiki/Tax-eff ... _placement

https://www.bogleheads.org/wiki/Three-fund_portfolio

https://www.bogleheads.org/wiki/Lazy_portfolios

slimshady
Posts: 66
Joined: Sun Aug 12, 2012 8:48 am

Re: Seeking help for cousins Vanguard accounts

Post by slimshady » Sat Jan 13, 2018 6:58 pm

Thanks for the links Watty.

I think mirroring across the IRAs and funding the brokerage account with the domestic/international index funds would work best. I believe that rebalancing efforts would become an issue with the Target Date/Lifestrategy Funds when the market drops. The handful of individual securities are adding a bit of complexity...if they were sold the tax hit would be $4K or so. Really no big deal, however cousin desires to hold long term.
Last edited by slimshady on Sat Jan 20, 2018 10:49 am, edited 1 time in total.

slimshady
Posts: 66
Joined: Sun Aug 12, 2012 8:48 am

Re: Seeking help for cousins Vanguard accounts

Post by slimshady » Sat Jan 20, 2018 10:41 am

Good morning everyone. Bumping my original post.

Does anyone have suggestions? Is my idea of mirroring asset allocation across the TIRA and BIRA and funding the brokerage account with Total Stock Market and Total Internl Stock Market appropriate?? (Trying to help keep rebalancing measures as simple as possible for when the market drops). Cousin also contributes to a 401K.

The yearly TIRA contribution will be funded by the payout from the BIRA.
He still wants to maintain a handful of individual securities in the brokerage account. The remaining securities will be sold and will incur a small tax hit.

Thanks for any help.

Regards, Rich

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