Trying to get some advice on my family's current financial situation. Any/all feedback is welcome and appreciated!
Marital Status: Married, filing jointly
Residence: NYC, Rental
Household income: $185k, take home ~9400/month
Debt: Student loans, ~17k, 5.25% interest rate
My wife bounced around to a lot of random jobs over several years and eventually went to graduate school. Over that time she didn't accumulate any retirement assets. She stopped working several months ago to stay at home with our <1yo. I do my best to handle the financial responsibilities but reading the other posts on this board I'm slowly realizing I don't know what I'm doing. Consequently I could use all the advice I can get!
Emergency fund: $20,000 @ 1% annually
Other liquid savings for various reasons: $5500 @ 1% annually
529 for child: $10,000 for 2018 (NY limit for max state tax deduction)
Rollover IRA from past jobs: $61,000 (Target 2055 retirement fund at VG)
Rollover Roth IRA from past jobs: $69,000 (Target 2055 retirement fund at VG)
Employer-sponsored 401k: $10,000 (Target 2055 retirement fund at Fidelity) - funded up to my employer match, it's roughly $1440/month
Taxable Brokerage Account at Vanguard: $56,000
* VBFMX Vanguard Total Bond Market Index Fund Investor Shares: $3,000
* VGTSX Vanguard Total International Stock Index Fund Investor Shares: $3,000
* VTSAX Vanguard Total Stock Market Index Fund Admiral Shares: $20,000
* VGT VANGUARD INFORMATION TECHNOLOGY ETF $3,000
* A bunch of individual stocks: $27,000
- As you can see things are kind of all over the place. The bulk of the individual stocks are tied up in shares from a previous job and "fun" money I got really lucky on several years ago -- I haven't really spent more than $5,000 to generate that $27,000. I don't like to actively trade individual stocks and would prefer to put money into index funds.
- We've put a LOT of our extra money into paying down the student loan debt; it was $90k three years ago. We're looking to get it paid off completely this year.
- My asset allocation for the taxable accounts are messed up because I misunderstood the "higher proportion of stocks when you're younger" advice. I didn't realize it was talking about tax-advantaged accounts and long-term investing for retirement. I'm very wary of the asset allocation now and would love to move towards something safer/more sustainable because I know this market isn't going to last forever.
- My wife is staying at home with the baby now but we're not sure how long that will last. We're going to re-evaluate in a year.
- What's the best way to go about rebalancing funds in the taxable account? Should I wait until the 1 year mark to rebalance for long term capital gains? I'm okay with a three fund portfolio.
- I'd like to make an attempt to buy a house in the next ~4 years or so. Assuming I'd need $80k-$100k for a downpayment, what's the best way to use the money in my taxable account to get there? Should I sell it all and put the proceeds in a savings account?
- More generally: I see a lot of advice about putting money into retirement accounts because of the tax advantages. That makes sense, I get that. What I don't understand: what are the best ways to build wealth for money I'd like to have access to BEFORE I get to retirement age? Is it a taxable account?
- My wife has no retirement savings, but in the years she works we're over the joint income limit to contribute to a Roth IRA. I've heard of a backdoor Roth but I'm not sure how to go about doing it. Two questions: (1) Do I need to contact someone at a company to help me perform one? (2) Assuming that neither of us ever have any intentions of a divorce (for the sake of argument let's assume this is true), is there a point to investing in any retirement accounts for her? Would it make more sense to contribute more to my own instead?
- Should I hire and talk to a professional? What's the best way to go about finding someone?