Help me choose funds and rebalance

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vbin
Posts: 6
Joined: Wed May 09, 2018 10:58 pm

Help me choose funds and rebalance

Post by vbin » Wed May 16, 2018 3:11 am

Hi, I am 34 and put money in Roth and 401K.

Below are my current positions:
Emergency funds: 8 months of expenses
Mortgage: jumbo, (interest rate: 3.75%)
Tax Filing Status: Married Filing Jointly with one dependent child
Tax Rate: (average 21%Federal)

State of Residence: California
Age:34
Desired Asset allocation: DO NOT KNOW
Desired International allocation: DO NOT KNOW

Current retirement assets [100%]
Taxable
Cash: ~ (5%)
Robinhood: ~ (17.33%) (top holdings: T, AAPL, PM, MO, PEP, DUK, KHC, BABA, QCOM, PG, FB, RDS.B, XOM, JNJ, STWD)

His 401K:
Total: (61.33%)

Fidelity: 401K Previous employer (no more contributions) (No more contributions)

(17.33%) Vanguard S&P 500 Index Trust
(7.66%) Vanguard Russell 1000 Value Index Trust
(4.5%) Vanguard Russell 2000 Growth Index Trust
(2%) Fidelity ® Growth Company Commingled Pool Class 2 [ER .38%]
(.5%) LifePath® Index 2050 Fund O

Fidelity: 401K Current Employer (maxing out contributions from this year)
(20.66%) VIIIX Vanguard Institutional Index Fund Institutional Plus Shares
(6%) Schwab Managed Retirement Trust Fund 2055 Unit Class V [ER .35%]

His Roth IRA at Vanguard:(11.4%)
(4.83%) VBINX Vanguard Balanced Index Fund Investor Shares
(3.86%) VMMXX Vanguard Prime Money Market Fund
(1.66%) Vanguard Federal Money Market Fund
(1%) VYM, VNQ, VOO, VTI ETFs

Her Roth IRA at Vanguard:(4.73%)
(4.73%) Vanguard Federal Money Market Fund


I also have HSA which I haven't included above
HSA ~$9000 (100%)
$2000(22%) invested in Vanguard funds: My HSA provider charges ~.39% fee on the money invested :(

Contributions:
New annual Contributions
$18,500 his 401k (employer matching 4%)
$5,500 his IRA/Roth IRA
$5,500 her IRA/Roth IRA

Question:

Roth IRA:
- We are only invested in VBINX or sitting on cash, should we invest more in VBINX?
- If there is a better option than VBINX for Roth based on our current situation what would you suggest

401K:
- I do not have great options available in 401K the only other Vanguard option is (Vanguard Total Bond Market Index Fund Institutional Shares
VBTIX), all other are target funds with very high ER.(should I be adding to VBTIX)?
- VIIIX recently became available and I am thinking to put 100% of my 401K contributions in this.
- Since my 401K doesn't have great options other than VIIIX, maybe I can diversify my ROTH?

HSA:
Is there a workaround for HSA money, .39% charge is too high, my service provider is HealthEquity?
Last edited by vbin on Thu May 17, 2018 6:40 pm, edited 3 times in total.

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FiveK
Posts: 4944
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help me choose funds and rebalance

Post by FiveK » Wed May 16, 2018 5:27 pm

vbin wrote:
Wed May 16, 2018 3:11 am
$2000 invested in Vanguard funds: My HSA provider charges ~4% fee on the money invested :(
...
Is there a workaround for HSA money, 4% charge is too high, my service provider is HealthEquity?
Is that 4% or 0.4%, as annual 0.396% fee implies?

vbin
Posts: 6
Joined: Wed May 09, 2018 10:58 pm

Re: Help me choose funds and rebalance

Post by vbin » Thu May 17, 2018 5:59 pm

@FiveK, my bad, its .39%,(corrected). Its till very high :(

User avatar
FiveK
Posts: 4944
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help me choose funds and rebalance

Post by FiveK » Thu May 17, 2018 6:13 pm

vbin wrote:
Thu May 17, 2018 5:59 pm
@FiveK, my bad, its .39%,(corrected). Its till very high :(
Compared with what one can get in an IRA or a good 401k, that is high.

Compared with many other HSA plans, however, it's not so bad.

In addition to the wiki linked already, see
New HSA provider Lively offers investments for $30/yr fee,
Is HSA Bank + TD Ameritrade still the best HSA choice?,
Best HSA (2017), and
HSA Search - Find HSA Providers.

HSA providers seem to change terms more often than IRA providers, so it could be worth confirming current rates are the same as mentioned in any of the links.

vbin
Posts: 6
Joined: Wed May 09, 2018 10:58 pm

Re: Help me choose funds and rebalance

Post by vbin » Thu May 17, 2018 6:42 pm

Thank you for sharing the resources. (I updated some %es based on guidelines).

The problem with HSA is that I can not change it, the provider is chosen by the employer.

User avatar
FiveK
Posts: 4944
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help me choose funds and rebalance

Post by FiveK » Thu May 17, 2018 8:56 pm

vbin wrote:
Thu May 17, 2018 6:42 pm
Thank you for sharing the resources. (I updated some %es based on guidelines).

The problem with HSA is that I can not change it, the provider is chosen by the employer.
Here's another resource: How To Rollover an HSA On Your Own and Avoid Trustee Transfer Fee. Happy transferring (if you wish)!

vbin
Posts: 6
Joined: Wed May 09, 2018 10:58 pm

Re: Help me choose funds and rebalance

Post by vbin » Fri May 18, 2018 1:44 pm

FiveK wrote:
Thu May 17, 2018 8:56 pm
vbin wrote:
Thu May 17, 2018 6:42 pm
Thank you for sharing the resources. (I updated some %es based on guidelines).

The problem with HSA is that I can not change it, the provider is chosen by the employer.
Here's another resource: How To Rollover an HSA On Your Own and Avoid Trustee Transfer Fee. Happy transferring (if you wish)!
Thank you, that is very helpful. I will reach out to my provider and see how to do this.

Will you also be able to give some suggestions on balancing my funds? going forward I will be heavily invested in VIIIX. Is there much difference in VIIIX and total stock index?
Based on the fact that I have VIIIX and VBINX(mix of stock+bond) should I be thinking about 3 fund approach?

vbin
Posts: 6
Joined: Wed May 09, 2018 10:58 pm

Re: Help me choose funds and rebalance

Post by vbin » Fri May 18, 2018 1:44 pm

FiveK wrote:
Thu May 17, 2018 8:56 pm
Here's another resource: How To Rollover an HSA On Your Own and Avoid Trustee Transfer Fee. Happy transferring (if you wish)!
Thank you, that is very helpful. I will reach out to my provider and see how to do this.

Will you also be able to give some suggestions on balancing my funds? going forward I will be heavily invested in VIIIX. Is there much difference in VIIIX and total stock index?
Based on the fact that I have VIIIX and VBINX(mix of stock+bond) should I be thinking about 3 fund approach?

User avatar
FiveK
Posts: 4944
Joined: Sun Mar 16, 2014 2:43 pm

Re: Help me choose funds and rebalance

Post by FiveK » Fri May 18, 2018 2:26 pm

vbin wrote:
Fri May 18, 2018 1:44 pm
FiveK wrote:
Thu May 17, 2018 8:56 pm
Here's another resource: How To Rollover an HSA On Your Own and Avoid Trustee Transfer Fee. Happy transferring (if you wish)!
Thank you, that is very helpful. I will reach out to my provider and see how to do this.

Will you also be able to give some suggestions on balancing my funds? going forward I will be heavily invested in VIIIX. Is there much difference in VIIIX and total stock index?
Based on the fact that I have VIIIX and VBINX(mix of stock+bond) should I be thinking about 3 fund approach?
VIIIX (Institutional class S&P 500) is a great fund, and will likely behave very much the same as a total US stock index. Just compare performance of VIIIX with VTSAX:
Image

Up to you what amount (if any) of VBINX to use along with VIIIX. Good luck!

vbin
Posts: 6
Joined: Wed May 09, 2018 10:58 pm

Re: Help me choose funds and rebalance

Post by vbin » Sun May 20, 2018 8:04 pm

Thank you

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