Assistance with portfolio review

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petestan
Posts: 20
Joined: Thu Nov 19, 2015 7:18 pm

Assistance with portfolio review

Post by petestan » Thu Jan 18, 2018 7:50 pm

I am thinking of doing some rebalancing and was looking for advice.

I am 60 years old, retired, single, no pension, no debt, good health, with about $1.1mm in assets. Do not have to worry about leaving anything to heirs. Now starting to live off savings, am in the 10-15% federal bracket. Live in Massachusetts which has a 5.1% tax on capital gains. According to Personal Capital, I am presently allocated as follows:

42% US stock, 10% international, 5% alternatives, 32% US bond, 5.7% international bond, and 5.7% cash(they include cash holdings in mutual funds). I may not plan on taking social security until 65, which at that time, I may get about $12,000/yr. Presently, I am very frugal and my expenses are about $30,000/yr. My assets are broken down as follows:

Taxable
VFWAX Vanguard FTSE All World except US Admiral, exp ratio .11% 9.9% of assets
VSIGX Vanguard Intermediate Term Treasury Fund Admiral, ratio .07, 5.1% of assets
VIMAX Vanguard Mid Cap Index Admiral, ratio .06, 12.1% of assets
VTMSX Vanguard Tax Managed Small Cap Admiral, ratio .09, 3.4% of assets
SAMBX Virtus SEIX Floating Rate High Income Fund, ratio .75, 3.6% of assets
MGC Vanguard Mega Cap Index ETF, ratio .07, 28% of assets
I Bonds, 5.5% of assets

ROTH IRA
VICSX Vanguard Intermediate Term Corporate Bond Index Admiral, ratio .07, 11% of assets
SNH Senior Housing Properties Trust, 3.3% of assets

REGULAR IRA through TD Ameritrade
DBLTX Doubleline Total Return Bond Fund, ratio .48, 9.6% of assets
EMB iShares JP Morgan USD Emerging Markets Bond ETF, ratio .39, 3.8% of assets

Cash in savings and CD's, 4.6% of assets.

I was thinking of lowering my stock position to about 50% over the next couple of years and increasing my bond portion, but would have to do it in my taxable account and realize capital gains. I know I can have about $37,000 in gains and not pay any federal tax, but I will pay 5.1% to state.
I was thinking of selling some of MGC and maybe add to either VSIGX or SAMBX. I was also thinking of selling some of VIMAX.

I don't think there is any way around me not paying state tax at all and I was looking for advice on best ways to rebalance.

Would appreciate any feedback.

Thank you.

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Sandtrap
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Re: Assistance with portfolio review

Post by Sandtrap » Thu Jan 18, 2018 10:51 pm

(bump)

Grt2bOutdoors
Posts: 18211
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Assistance with portfolio review

Post by Grt2bOutdoors » Thu Jan 18, 2018 11:21 pm

Consider reducing MegaCap to holding 17-18% instead of present 28%.
Sell down the Midcap Admiral to 6% from 12%.

That would get you 75% of the way there to the 50% equities you are looking to get to.
You don't list what your gains are in each category, but by cutting those two funds down you will get closer to a total market index weighing, you are currently oveweighted in midcap and small cap (65/35).
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

petestan
Posts: 20
Joined: Thu Nov 19, 2015 7:18 pm

Re: Assistance with portfolio review

Post by petestan » Fri Jan 19, 2018 9:52 am

Grt2boutdoors,

Thanks for the advice. I plan on gradually cutting back, I know I now have too much in MGC and am sitting on over $75k in gains on that one, so definitely will start with that.

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