Investing neophyte. Help with portfolio please

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mrc13
Posts: 2
Joined: Wed Nov 07, 2018 5:32 pm

Investing neophyte. Help with portfolio please

Post by mrc13 » Wed Nov 07, 2018 5:45 pm

Whatever help you could provide me would be greatly appreciated. I will admit I do not know much about investing, but I know enough to know I need help.

Questions:

I want to be able to do a backdoor Roth IRA for both my wife and I. Based on my reading, I will need to move both of our IRAs (?) into a 401k/403b account. Through work, my wife can move her IRA to the Roth 403b. Will she then need to pay taxes? If so any other suggestions on how to save paying taxes at our current rate?

After reading through this forum, I have come to the realization that my whole life insurance purchase was a mistake. I am in the process of doing a 1035 exchange into a variable annuity at Vanguard. Any recommendation on the allocation of funds among my annuity options?
Within my taxable accounts I have a number of funds with high expense ratios. With my current advisor I don’t have a lot of options with lower expenses. Can I transfer funds to another institution (e.g. Vanguard, Fidelity) and not pay any fees?

Any overall suggestions or on how to change investing to meet desired a asset allocation would be greatly appreciated.

Emergency funds: Three months of expenses (not included in assets below)
Debt: Mortgage (3.75%) and student loans (his - 3.70%, hers - 3.35%).
Tax Filing Status: Married Filing Jointly (2 children)
Tax Rate: 35% Federal, 0% State
State of Residence: WA
Age: 38
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 20%

Current retirement assets (low six-figures)

Taxable:
31% cash (Savings account 1.85%)
59% fund name (ticker symbol) (expense ratio)
American Century International Bond Fund C Class - AIQCX (1.8)
BlackRock Short-Term Municipal Fund Investor C Shares - MFLMX (1.36)
Franklin Minnesota Tax-Free Income Fund Class C - FMNIX (1.21)
PIMCO Total Return Fund Class C - PTTCX (1.6)
Russell Investments LifePoints Growth Strategy Fund Class A - RALAX (0.57)
Russell Investments Short Duration Bond Fund Class C - RSBCX (1.58)
Russell Investments LifePoints Balanced Strategy Fund Class C - RBLCX (1.21)

His 401k
20.5% - Vanguard Target Retirement 2040 (VFORX) (0.15)
Company match: 4%

His old 403b
11% - Vanguard Institutional Target Retirement 2045 (VITLX) (0.09)

His old Roth 403b
3.5% - Vanguard Institutional Target Retirement 2045 (VITLX) (0.09)

His old 401k
1.6% - Vanguard Institutional Target Retirement 2045 (VITLX) (0.09)

His Annuity IRA (old 403b rolled over)
6% fund name (Individual Retirement Annuity- Back End Design Cannot find ticker symbol and hard to find expense ratio)

Her 403b
38.2% - Vanguard Institutional Target Retirement 2040 (VIRSX) (0.09%)
Company match 7.5%

Her Roth 403b
14.6% - Vanguard Institutional Target Retirement 2040 (VIRSX) (0.09%)

Her Traditional IRA (old 403b rolled over)
4.5% - Oppenheimer Portfolio Series Conservative Investor Fund Class A (OACIX) (0.42)


Contributions

New annual Contributions
$18,500 his 401k (4% employer matching contributions)
$18,500 her 403b (7.5% employer matching contributions)
$30,480 his whole life insurance (!!!)

Available funds

Funds available in his 401(k)
Vanguard 500 Index Fund Investor Shares (VFINX)
Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares (VFSVX)
Vanguard Growth Index Fund Investor Shares (VIGRX)
Vanguard High-Yield Corporate Fund Investor Shares (VWEHX)
Vanguard Inflation-Protected Securities Fund Investor Shares (VIPSX)
Vanguard Mid-Cap Index Fund Investor Shares (VIMSX)
Vanguard Small-Cap Index Fund Investor Shares (NAESX)
Vanguard Target Retirement 2015 Fund (VTXVX)
Vanguard Target Retirement 2020 Fund (VTWNX)
Vanguard Target Retirement 2025 Fund (VTTVX)
Vanguard Target Retirement 2030 Fund (VTHRX)
Vanguard Target Retirement 2035 Fund (VTTHX)
Vanguard Target Retirement 2040 Fund (VFORX)
Vanguard Target Retirement 2045 Fund (VTIVX)
Vanguard Target Retirement 2050 Fund (VFIFX)
Vanguard Target Retirement 2055 Fund (VFFVX)
Vanguard Target Retirement 2060 Fund (VTTSX)
Vanguard Target Retirement 2065 Fund (VLXVX)
Vanguard Target Retirement Income Fund (VTINX)
Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)
Vanguard Total International Stock Index Fund Investor Shares (VGTSX)
Vanguard Value Index Fund Investor Shares (VIVAX)

Funds available in her 403(b)
HARBOR CAP APPR INST (HACAX)
VANG FTSE SOC IDX IS (VFTNX)
VANG INST INDEX PLUS (VIIIX)
TRP INST LG CAP VAL (TILCX)
VANG MIDCAP IDX INST (VMCIX)
LD ABBETT DEV GRTH I (LADYX)
VANG SM CAP IDX INST (VSCIX)
DFA US TARGET VALUE (DFFVX)
AF EUROPAC GROWTH R6 (RERGX)
VANG DEV MKT IDX IS (VTMNX)
DFA EMERG MKTS VALUE (DFEVX)
VAN EM MKT ST IDX IS (VEMIX)
C&S INST REALTY SHS (CSRIX)
PIM REAL RETURN INST (PRRIX)
PIM TOTAL RT INST (PTTRX)
VANG TOT BD MKT INST (VBTIX)
VANG ST BOND IDX IS (VBITX)
PIM INST BOND UH I (PFUIX)
VANG VMMR-FED MMKT (VMFXX)
VANG INST TR 2015 (VITVX)
VANG INST TR 2020 (VITWX)
VANG INST TR 2025 (VRIVX)
VANG INST TR 2030 (VTTWX)
VANG INST TR 2035 (VITFX)
VANG INST TR 2040 (VIRSX)
VANG INST TR 2045 (VITLX)
VANG INST TR 2050 (VTRLX)
VANG INST TR 2055 (VIVLX)
VANG INST TR 2060 (VILVX)
VANG INST TR INCOME (VITRX)

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BolderBoy
Posts: 4148
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Investing neophyte. Help with portfolio please

Post by BolderBoy » Wed Nov 07, 2018 11:12 pm

mrc13 wrote:
Wed Nov 07, 2018 5:45 pm
I want to be able to do a backdoor Roth IRA for both my wife and I. Based on my reading, I will need to move both of our IRAs (?) into a 401k/403b account. Through work, my wife can move her IRA to the Roth 403b. Will she then need to pay taxes? If so any other suggestions on how to save paying taxes at our current rate?
If your wife's IRA will incur taxes moving to a Roth403b, might as well simply roll it over to a rIRA at Vanguard (low costs), pay the taxes and enjoy the control. But your thinking is right; best to move all tIRAs before you start doing backdoor Roth contributions.
After reading through this forum, I have come to the realization that my whole life insurance purchase was a mistake. I am in the process of doing a 1035 exchange into a variable annuity at Vanguard. Any recommendation on the allocation of funds among my annuity options?
Within my taxable accounts I have a number of funds with high expense ratios. With my current advisor I don’t have a lot of options with lower expenses. Can I transfer funds to another institution (e.g. Vanguard, Fidelity) and not pay any fees?
I'm not familiar with 1035 exchanges. Does it require that you convert the Whole Life policy into a variable annuity?

You can ask your intended custodian if they'll accept transfer of your taxable account funds "in kind", to avoid the tax hit of selling beforehand.

Your taxable account has some really nasty-ER funds in it. Your advisor must love you (hah!)

The important thing now is that you've done some reading and realize that you've been taken for a ride. Welcome to the [new] fold!
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

mrc13
Posts: 2
Joined: Wed Nov 07, 2018 5:32 pm

Re: Investing neophyte. Help with portfolio please

Post by mrc13 » Wed Nov 14, 2018 8:11 pm

If your wife's IRA will incur taxes moving to a Roth403b, might as well simply roll it over to a rIRA at Vanguard (low costs), pay the taxes and enjoy the control. But your thinking is right; best to move all tIRAs before you start doing backdoor Roth contributions.
Thank you

I'm not familiar with 1035 exchanges. Does it require that you convert the Whole Life policy into a variable annuity?
My understanding is that I need to exchange the entire policy. I have 3 separate policies and I plan to exchange all 3.
You can ask your intended custodian if they'll accept transfer of your taxable account funds "in kind", to avoid the tax hit of selling beforehand.
I never hurts to ask. Thank you for the suggestion.
Your taxable account has some really nasty-ER funds in it. Your advisor must love you (hah!)
No kidding. All along I thought he was my "best friend"!

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