Investment review / help request

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DoranMartell
Posts: 2
Joined: Thu Aug 16, 2018 4:07 pm

Investment review / help request

Post by DoranMartell » Fri Aug 17, 2018 12:00 am

Hello all,

Quick Background on me:
40/m single and no kids.
Mostly debt free except student loans and a mortgage but at 1.6% and 3.75% respectively I haven't rushed to pay these off.
Federal tax rate is unknown and state tax rate is 6%.
I'm comfortable with higher risk because I feel like I'm behind in retirement savings for my age, but I'm unwilling to attempt timing the market, day trading, or buying individual company stocks. I would like to keep it simple.

I would love and very much appreciate some help from the amazing folks here. I have been reading as much info as I can, but I think I have fired my financial advisor and leaped into the market prematurely without enough knowledge. I suspect I have goofed the more I learn and I'm hoping you all can help me get on track. I know that my first mistake was that I did not consider my portfolio holistically, but instead each account as it's own portfolio.

I haven't fully grasped the tax efficiency yet, but I may have made a mistake putting bonds (BND) and REIT (VNQ) ETFs in a taxable account. The concern is due to the imbalance between taxable and tax advantaged I didn't want my tax advantaged accounts to be 100% bonds and not grow. I don't understand the Roth backdoor or if I should be doing that. I also don't fully understand tax loss harvesting and if I should do that or not. My losses on Vanguard total International seem to be a mirror of my gains in Vanguard Total Stock Market.

Tax Advantaged Accounts:

Current company 401K: $73,000
Allocations:
Dryden S&P 500 Index Fund - $15,000 - 20%
Vanguard Mid Cap Index Institutional $21,000 - 30%
Vanguard Small Cap Index Adm - $37,000 - 50%
Auto-Rebalance not enabled.

IRA (Previous company 401K): $68,000
Allocations:
Vanguard Total Bond Market ETF: $5,400
Vanguard Total Intl Bond Market Index ETF: $2,000
Vanguard Total Intl Stock Index Fund ETF: $23,500
Vanguard Total Stock Market ETF: $37,600

Taxable Accounts:

Checking: $13,000
Savings: $1,000
Money Market: $59,000

Brokerage: $255,000
Allocations:
Vanguard Real Estate Index ETF: $21,000
Vanguard Total Bond Market ETF: $63,000
Vanguard Total Intl Stock Index Fund ETF: $71,000
Vanguard Total Stock Market ETF: $99,000

Employee Stock Purchase Plan: $3,000

Carter Mission Critical REIT: $15,000

Income:

Gross Salary: $10,833.33/month
Rental house income (out of state): $1,500/month
House is worth $200K I owe $120K financed at 3.75% for 30 years.
Total Income: $12,333.33 /month

Expenses:
Student loans - $189/month $19,000 remaining financed at 1.6% for 30 years.
Rental house management: $150/month
Rental Apartment (where I live): $1900/month
Mortgage: $700/month
Property taxes: $220/month
Owners Insurance: $80/month
Car Insurance: $60/month
Fuel: $50/month
Electic: $60/month
Water: $50/month
Cable/Internet: $150/month
Food: ~$500/month
Entertainment: $200/month
Misc: $200/month
Total Expenses: $4,509

Contributions:
Maxing 401k - $18,000 / annual
Maxing HSA - $2,600 / annual

Thank you all so much for your consideration.

ionball
Posts: 93
Joined: Wed Jan 31, 2018 12:17 pm

Re: Investment review / help request

Post by ionball » Fri Aug 17, 2018 7:29 am

I think it would be a good idea to sell enough of the bonds in the taxable brokerage account to replace the non-bonds in your IRA. However, before you sell anything from your taxable brokerage account, check the cost basis and make sure the capital gains tax won't be too harmful. If the capital gains tax is acceptable you can then buy the non-bonds in your taxable account which basically replaces what you sold in IRA. In the end it's a swap, but watch out for the tax impact. I'm not factoring the REITs vs bonds because that's above my paygrade.

DoranMartell
Posts: 2
Joined: Thu Aug 16, 2018 4:07 pm

Re: Investment review / help request

Post by DoranMartell » Fri Aug 17, 2018 10:09 am

Thanks for the reply. I've checked the cost basis for the "BND ETF" in the brokerage account and it's currently minus $92. I was asking about the REIT ETF in the brokerage account also because from what I read this is low in tax efficiency so it shouldn't be in a taxable account. All of this is above my paygrade, but I've learned from the forum that with the right allocations and low cost funds I can manage this with better results than a financial advisor. I just need a little help getting the allocations correct in the right accounts.

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