Debt: $6k student loan (2% interest), $30k business loan (variable, currently 6% interest)
Tax Filing Status: Single
Tax Rate: 35% Federal, 11.3% State
State of Residence: CA
Age: 38 (plan to retire around 65)
Annual income: $500k/year
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 35% of stocks
Funds for first home down payment (want to buy within 1 year)
~$400k in cash in savings accounts
Current retirement assets - Total is about $600k
Taxable - 48%
4% - Vanguard Target Retirement 2050 - Vanguard (VFIFX) (expense ratio 0.15%)
7% - SPDR S&P 500 - (SPY) (expense ratio 0.09%)
15% - US Individual Stocks (a few of the stocks have $2k total of STCL, most stocks with large LTCG)
7% - ESPP US individual stock (vested, no longer at company, significant gains)
15% - Cash for investing (not including emergency funds)
401k at Schwab - 21%
21% - Vanguard Target Retirement 2045 (expense ratio 0.08)
No longer at the company
401k at Fidelity - 10%
10% - Vanguard Target Retirement 2045 (expense ratio 0.08)
No longer at the company
401k at Wells Fargo - 3%
3% - T. Rowe Price Retirement 2045 (expense ratio 0.43)
Roth IRA - 16%
6% - US Individual Stocks (not allowed to sell, invested in ~3 large cap companies)
6% - US Individual Stocks (allowed to sell, invested in ~10 large cap companies)
3% - US Individual Stocks (allowed to sell, invested in ~4 small cap companies)
1% - SPDR S&P 500 - (SPY) (expense ratio 0.09%)
(recently contributed via backdoor Roth IRA)
HSA Account - 2%
2% - Cash (not invested - concerned about tracking basis for California taxes)
Funding at $3,450/year, no employer match.
New annual Contributions
401k at Wells Fargo - Funding at $18.5k/year, no employer match.
Profit Sharing Plan (tax advantaged) - Funding at $35k/year starting end of this year.
Taxable - $50k/year (for retirement, not short-term goals) - prefer to invest $2k every 2 weeks, but can do lump sums if better.
401k at Wells Fargo
Vanguard Small-Cap Index Fund; Admiral Shares (VSMAX) (expense ratio 0.04)
Vanguard Total International Stock Index Fund; Institutional Shares (VTSNX) (expense ratio 0.09)
Metropolitan West Total Return Bond I Class I Shares (MWTIX) (expense ratio 0.44)
Vanguard Short-Term Bond Index Fund; Institutional Class Shares (VBITX) (expense ratio 0.05)
T. Rowe Price Institutional Retirement 2045 (expense ratio 0.43)
Metropolitan West Total Return Bond (MWTRX) (expense ratio ??)
Vanguard Long-Term Bond Index (VBLTX) (expense ratio 0.15)
American Funds 2045 TRGT Retire (RFHTX) (expense ratio ??)
Vanguard Small Cap Index Fund (VSMAX) (expense ratio .06)
- I prefer to move away from individual stocks and towards Target Retirement Date funds. Index/mutual funds work, too.
- While I prefer Target Retirement date funds, I am willing (and able) to buy (and rebalance yearly) index funds at Vanguard (or Fidelity) to offset individual stocks that I can’t/shouldn’t sell (e.g., due to SEC rules/significant gains).
- Is it reasonable to sell my $2k capital losses from the taxable account at the end of this year (2018) for ordinary income deduction before selling stocks to rebalance taxable accounts next year (e.g., Jan 2019)?
- My portfolio is not diversified. How should I rebalance?
- Assuming I need to buy bond index funds to offset risk when rebalancing, in which account (taxable, Roth, 401k) should I buy them? I also appreciate suggestions on which bond index funds to buy.
- Is it “worth” investing the funds in the HSA account? My understanding is that California requires taxes to be paid on gains, thus basis must be tracked. My HSA provider does not track any basis/events.