Please Review portfolio

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strive_for_fire
Posts: 3
Joined: Tue Feb 13, 2018 7:39 am

Please Review portfolio

Post by strive_for_fire » Tue Feb 13, 2018 9:01 am

Emergency funds: six to nine months of expenses in online savings account

Debt:
Credit Card: None
Car Loans: None

Mortgages: (generates rental income)
$287,000 (primary for 3.375 interest 20 years)
66,000 (Rental #1: 5% for 30 years)
41,000 (rental#2: 4.625% for 30 yrs)
36,000 (rental#3: 5% for 30 yrs)
50,000 (rental #4: 4.75% for 30 yrs)
50,000 (rental #5: 5% for 30 yrs)

Tax Filing Status: Married Filing Jointly
Tax Rate: 28% Federal, 5.75 % State (Virginia)
State of Residence: VA
Age: 40 (His), 39(Her)
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 20% of stocks

Current retirement assets:

Taxable
$100 cash Vanguard Federal Money Market Fund (Savings account)
Ally Brokerage dividend account
$20,000 with 8-10 dividend paying blue chips companies like AAPL/AMAT/BAH/DIS/QCOM/T.

His 401k
$1000 Target Retirement 2040 Trust Plus (ticker symbol) (expense ratio: 0.06%)
Company match? No but 10% vesting contribution every year by the employer (100% fully vested after 6 years)

His Roth IRA at Vanguard
$40,000 Vanguard Target Retirement 2045 Fund (VTIVX) (expense ratio: 0.15%)

His Rollover IRA at Vanguard
$39,000 Vanguard Target Retirement 2040 Fund Investor Shares (ticker symbol: VFORX) (expense ratio: 0.15%)
$70,000 Vanguard Target Retirement 2045 Fund Investor Shares (ticker symbol: VTIVX) (expense ratio: 0.15%)

His Traditional IRA at Vanguard
$32,000 Vanguard Target Retirement 2040 Fund Investor Shares (ticker symbol: VFORX) (expense ratio: 0.15%)

Equity trust Self Directed IRA:
$20,000 - Rental crowdfunding platform
$20,000 - Sitting idle with cash

Her 401k
None. Employer doesn't provide 401k so I plan to open a Vanguard taxable account and contribute ~20k in that.

Her Traditional IRA at Vanguard
$49,000 Vanguard Target Retirement 2040 Fund (ticker symbol: VFORX) (expense ratio:0.15%)

Her Roth IRA at Vanguard
$23,000 Vanguard Target Retirement 2040 Fund Investor Shares (ticker symbol: VFORX) (expense ratio: 0.15%)
$42,000 Vanguard Target Retirement 2045 Fund Investor Shares (ticker symbol: VTIVX) (expense ratio: 0.15%)


Contributions:

New annual Contributions
$18,400 his 401k (Match: None this year 2018 as recently started working for this employer)
$5,500 his IRA/Roth IRA (if qualified for 2017 and 2018 based on income cap for Roth)
$5,500 her IRA/Roth IRA (if qualified for 2017 and 2018 based on income cap for Roth)
$18,500 taxable (for retirement, not short term goals) - Opened one in Vanguard and plan to contribute for retirement as no employer 401k for her. Plan to contribute regularly form 2018 onwards beyond 401k and IRA contributions.

Available funds

Funds available in his 401(k) : vanguard funds
Target Retirement 2015 Trust Plus
Target Retirement 2020 Trust Plus
Target Retirement 2025 Trust Plus
Target Retirement 2030 Trust Plus
Target Retirement 2035 Trust Plus
Target Retirement 2040 Trust Plus
Target Retirement 2045 Trust Plus
Target Retirement 2050 Trust Plus
Target Retirement 2055 Trust Plus
Target Retirement 2060 Trust Plus
Target Retirement 2065 Trust Plus
Target Retirement Income Trust Plus
Vanguard Dividend Growth Fund VDIGX
Vanguard Emerging Markets Stock Index Fund Institutional Shares VEMIX
Vanguard Federal Money Market Fund VMFXX
Vanguard Growth Index Fund Institutional Shares VIGIX 0868
Vanguard Inflation-Protected Securities Fund Institutional Shares VIPIX
Vanguard Institutional Index Fund Institutional Plus Shares VIIIX
Vanguard Mid-Cap Index Fund Institutional Plus Shares VMCPX
Vanguard Small-Cap Index Fund Institutional Plus Shares VSCPX
Vanguard Total Bond Market Index Fund Institutional Plus Shares VBMPX
Vanguard Total International Stock Index Fund Institutional Shares VTSNX
Vanguard Value Index Fund Institutional Shares VIVIX
Vanguard Windsor Fund Admiral Shares VWNEX

Questions:
1. I plan to rollover my previous employer 401k to Vanguard (~30k). Where should I put my fund to meet my allocation?
2. Her 401k rollover from Fidelity to Vanguard (~13k). Where should I put her fund to meet allocation?
3. Taxable account (~20k) - I plan to invest in two funds allocation 70-30:
Total Stock Market Index Admiral Shares VTSAX
Total International Stock Index Admiral Shares VTIAX
4. Can I include any tax efficient bond funds in taxable account to meet the allocation to make it three fund model.
5. I have seperate VA 529 plans for kids. VA has upto $4k state deduction limit. I plan to put total 6k total so shall I put rest in any vanguard 529 fund?
6. Optum HSA account has some Vanguard funds (Lifecycle fund 65% /s&p500 index 15%/ REIT index 10% and mid cap index 10%) - Shall I rollover this to Vanguard or somewhere else?


Too many questions but I am new to Bogle investing style and started reading the forum. Thanks for everyone's help and input in advance.

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Tyler Aspect
Posts: 1083
Joined: Mon Mar 20, 2017 10:27 pm
Location: California
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Re: Please Review portfolio

Post by Tyler Aspect » Tue Feb 13, 2018 11:45 am

Welcome to Bogleheads.

You have $243k of rental property mortgages at around 4.8% interest. The best usage of taxable money is to pay off the rental mortgage, with a guaranteed rate of 4.8% return.

Your rental property mortgage also represents as negative bonds, so that as the entire portfolio goes you have a negative bond balance. You might want to pick total bond market with the rollover IRAs.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

strive_for_fire
Posts: 3
Joined: Tue Feb 13, 2018 7:39 am

Re: Please Review portfolio

Post by strive_for_fire » Wed Feb 14, 2018 7:44 am

Ok, Thanks for your reply. I don't intend to keep these rentals for long (may be next 5-10 years) but not long enough to generate supplemental income during retirement. Hence I don't see any rush to pay them off and treat them like credit card debts. Interest rates are low anyways and not to mention get some mortgage interest deduction in tax. That is due to change in 2018 with limited property tax deductions capped to 10k.

Total bond index fund sounds like a good choice within pre tax accounts. I just need to calculate how much allocation for bonds given the fact rental property mortgage serves as negative bond.
Any other suggestion to tweak the portfolio in general?

annielouise
Posts: 280
Joined: Wed May 14, 2008 4:11 pm

Re: Please Review portfolio

Post by annielouise » Wed Feb 14, 2018 8:12 am

strive_for_fire wrote:
Wed Feb 14, 2018 7:44 am
Interest rates are low anyways and not to mention get some mortgage interest deduction in tax. That is due to change in 2018 with limited property tax deductions capped to 10k.
I don't believe that property tax is capped on Schedule E for your rentals.

strive_for_fire
Posts: 3
Joined: Tue Feb 13, 2018 7:39 am

Re: Please Review portfolio

Post by strive_for_fire » Wed Feb 14, 2018 11:37 am

annielouise wrote:
Wed Feb 14, 2018 8:12 am
strive_for_fire wrote:
Wed Feb 14, 2018 7:44 am
Interest rates are low anyways and not to mention get some mortgage interest deduction in tax. That is due to change in 2018 with limited property tax deductions capped to 10k.
I don't believe that property tax is capped on Schedule E for your rentals.
Possibly, I am not sure about it.

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