Currently her savings are in individual stocks and my savings are in index ETFs with a small cap value tilt. We are planning on selling these (in a tax efficient way) to achieve the target allocation below. We are moving all our accounts over to Vanguard.
Emergency funds: 6-12 months
Debt: None
Tax Filing Status: Married filing TBD (consulting with tax professional)
Tax Rate: 24% Federal, 9.3% State
State of Residence: CA for now, moving next year
Age: 30
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 40% of stocks
Proposed allocation (total assets $3.80M): ** updated **
* His 401k:
0.8% ($31k) Fidelity US Bond (FSITX)
* His IRA:
0.6% ($22k) Vanguard total bond market (VBTLX)
* Her IRA:
1.3% ($51k) Vanguard total bond market (VBTLX)
* Her TSP (Thrift Savings Plan):
0.7% ($25k) G fund
* Taxable:
33.3% ($1.28M) - Vanguard total US (VTSAX)
22.2% ($855k) - Vanguard Total International (VTIAX)
16.6% ($640k) - Intermediate-term tax-exempt bond (VWIUX)
Privately held
[/b]24.5% ($950k) - private tech company. Will reduce this position to <20% at next opportunity
The private tech company (my current employer)’s stock has the potential to increase substantially in the future (company is attempting to enter new lucrative markets), but also carries high risk. I have been slowly selling this and diversifying, but because of the large possible upside (and the fact that this stock is not on public markets) I think it makes sense to continue to hold a substantial dollar value of this stock. For reference, this stock increased ~12x over the past 6 years, although I know this is unlikely to repeat over the next 6 years.
Questions:
- Does this plan generally seem reasonable, and any suggestions for improvements?
- Does the position in my employer seem too high, even given the upside? If the stock continues to rise, I am planning on continuing to sell to hold roughly this position.
- Any opinions on best way to implement stock strategy (60% VTSAX / 40% VTIAX vs. 90% VT / 10% VTSAX). The latter seems tempting as it will continue to track the world balance with a small home country tilt, but it has slightly higher fees