Portfolio Review- Thirty-Something Couple

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Topic Author
tsmi448
Posts: 2
Joined: Thu Jan 18, 2018 8:23 am

Portfolio Review- Thirty-Something Couple

Post by tsmi448 »

Hi, been a longtime lurker and finally felt comfortable posting. My wife and I got married about two years ago, bought a house, and we both switched jobs, so just a little bit of change. After getting our budget together in 2017, my resolution for 2018 is to get our more "advanced" finances in-order.A bit of background for the student loans. I went back to law school and currently work in government so my loan payments are income based and I am doing the Loan Forgiveness program which I am already 5 years into. My wife's loans were "refinanced" by a family member and we are paying them back interest free. We are both 32 and work full-time.

Background
Emergency Fund: $10K (plus next month's expenses, we use YNAB and try to follow the always live off the previous month's income)
Debt: Mortgage: $115K, 3.99%, monthly payment $856 includes taxes and insurance; Car: $8K, 2.49%, monthly payment $155; Student Loan Payments: $700 a month
Tax Filing Status: Married Filing Separately
Tax Rate: Federal 25% both, 3.07% State both
State of Residence: PA
Age: 33 and 33
Other Information: My wife actually vested with a small government pension, I mean small like $300 a month when she retires
Desired Asset Allocation: 85% stocks and 15% bonds
Desired International Allocation: 20% stocks

Current Retirement Assets
Taxable
VFWAX-13%
VTSAX-16%

My IRA
VBTLX- 13%
VTSAX- 22%

My Roth
VTSAX- 18%

Her IRA
VTTSX- 3%

Her Roth
VTTSX- 3%

Her Work IRA
VSMAX- 1%
VTRIX- 2%
VFIAX- 7%
FSIIX- 0% (They just started offering this in her plan and has much lower expenses compared to the Vanguard international fund)

My Work Deferred Comp Plan
US Large Company Stock Index Fund- 2%

Total Assets is about $95K and we have a little liquid assets right now to invest, just a few thousand

Contributions
$110 (about 5-6% of income) Her Work IRA per paycheck (26 pay checks)
8% my deferred comp. (Just bumped it up from 6%)
6% my pay to my government pension, still not vested
$700 a month goal for savings to be invested

Available Funds
Her Work IRA
DFA Emerging Markets DFCEX .53
DFA Intermediate Govt Fixed Income DFIGX .12
DFA International Small Cap DISVX .68
DFA International Small Company DFISX .53
DFA Two-Year Global Fixed DFGFX .17
DFA US Micro Cap DFSCX .52
Fidelity International Index Investor FSIIX .16
Vanguard 500 Index Adm. VFIAX .04
Vanguard High-Yield Corporate Adm. VWEAX .13
Vanguard Inflation-Protected Secs Adm. VAIPX .1
Vanguard Interm- Govt Bond Index Adm. VSIGX .07
Vanguard International Explorer VINEX .41
Vanguard International Value VTRIX .43
Vanguard Short-Term Bond Index VBIRX .07
Vanguard Short-Term Investment Grade VFSUX .1
Vanguard Small Cap Index VSMAX .06
Vanguard Small Cap Value Index VSIAX .07
Vanguard Value Index .06

My Deferred Comp
International Company Stock Index Fund .02
US Small/Mid Company Stock Index Fund .02
Us Large Company Index Fund .01
60/40 Balanced Stock and Bond Fund .014
US Bond Index Fund .02

Questions
1. Biggest question is just how is our portfolio?
2. Finally, want to get thoughts on increasing my deferred compensation to 10% and just lowering my monthly savings goal. I like the flexibility of not putting that directly into the account if a really big emergency should ever arrive.

Thanks to anyone that read through all of that. I think I might be starting to get my head wrapped around all of this.
paper200
Posts: 289
Joined: Sat Feb 02, 2008 10:40 am

Re: Portfolio Review- Thirty-Something Couple

Post by paper200 »

Good planning. Best Wishes for a long term success. I wish I planned like you at your age.

Suggestions would be to invest:
a) your spouses work IRA in DFA Microcap and Vanguard Small Cap Value DCAed - over the years you will have some factor built in
b) Your work deferred comp into 60:40 fund.
c) You are little stock heavy but low on international-- I would get some bonds in Taxable (Muni's) for Emergencies and move the International holding to your Roth.

Whatever changes you do - do it slowly don't over think/analyze.
Having freedom, food and roof is being 90% lucky in life and so is index investing. So, don't let the remaining 10% bother you.
OldSport
Posts: 1288
Joined: Tue Jul 25, 2017 7:01 pm

Re: Portfolio Review- Thirty-Something Couple

Post by OldSport »

Why do you file married filing separately? I've wonderered when choosing that option makes sense. I am curious.
Topic Author
tsmi448
Posts: 2
Joined: Thu Jan 18, 2018 8:23 am

Re: Portfolio Review- Thirty-Something Couple

Post by tsmi448 »

paper200 wrote: Fri Jan 19, 2018 5:20 pm Good planning. Best Wishes for a long term success. I wish I planned like you at your age.

Suggestions would be to invest:
a) your spouses work IRA in DFA Microcap and Vanguard Small Cap Value DCAed - over the years you will have some factor built in
b) Your work deferred comp into 60:40 fund.
c) You are little stock heavy but low on international-- I would get some bonds in Taxable (Muni's) for Emergencies and move the International holding to your Roth.

Whatever changes you do - do it slowly don't over think/analyze.
Thank you for the suggestions. I hadn't even thought about looking at the small caps so I will take a look at those. I think I need to read more about tax efficiency.
OldSport wrote: Fri Jan 19, 2018 6:25 pm Why do you file married filing separately? I've wonderered when choosing that option makes sense. I am curious.


The only reason we file this way is due to my student loan situation. My loan payments are calculated by my income, however if my wife and I file jointly her income is included in the amount. But if we file married filing separately her income doesn't count. So we pay more in taxes but significantly less on my student loans. So we should have just kept living together and never got married for financial purposes :D
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