6 months Portfolio Review

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Topic Author
topaz318
Posts: 17
Joined: Wed Nov 14, 2018 1:52 pm

6 months Portfolio Review

Post by topaz318 » Tue Jun 04, 2019 9:28 pm

Thank you to the Bogleheads here, I have been implementing on the advice given to me 6 months ago. I think its time for a 6 months Portfolio Review -

Emergency funds
$40,515.21 in Ally bank with 2.20% interest

Checking account
$10,000 with no interest

Debt:
Home loan - $192,771.26 @ 2.75%
Paid off the car loan since my last post
Credit cards - None (I pay off in full every month) and have several credit cards for points and miles

Tax Filing Status: Married Filing Jointly
State of Residence: MA
My Age: 39
Wife’s Age: 34
Baby: 4 months

Income
My Base - $165k
My Bonus+Commission - $41,200
Wife is currently not working but has a small business from home

Current retirement assets

Taxable
Company ESPP - 5% (I sell these as soon as I buy them at a 15% discount)
Stock - 200 shares of BAC
Vested stock options value - $32,795.90
Unvested stock options value - $77,981.06

His 401k at Fidelity
Maxing out
Current Balance - $36,225.45
Company Match - 6%
Funds -
FIDELITY FREEDOM INDEX 2045 INVESTOR (FIOFX) - 95%
AH INDEX 2045 - 5%

His HSA at Cigna
Maxing out and used for current medical bills

His Roth IRA at Vanguard
Maxing out
Current balance - $9,157.56
Fund - Vanguard Target Retirement 2045 Fund Investor Shares (VTIVX) - 100%

Her Roth IRA at Vanguard
Maxing out
Current balance - $1,451.74
Fund - Vanguard Target Retirement 2050 Fund Investor Shares (VFIFX) - 100%

His Rollover IRA at Vanguard
Current Balance - $109,582.41
Funds -
VFIAX Vanguard 500 Index Fund Admiral Shares - 20%
VIMAX Vanguard Mid-Cap Index Fund Admiral Shares - 10%
VSIAX Vanguard Small-Cap Value Index Fund Admiral Shares - 10%
VTIVX Vanguard Target Retirement 2045 Fund - 60%

Her Rollover IRA at Fidelity
Current Balance - $2,244.75
Fund - Fidelity Freedom® 2050 Fund - Class K6 (FZTKX) - 100%

529 - College Savings Plan
$2000/year
Current Balance - $809.89
Fund - MA PORTFOLIO 2036 (FIDELITY INDEX)

MISC
Got a will done based on the advice here
Basic Life Insurance - $412,000.00
Accidental Death & Dismemberment - $412,000.00


Questions:

1. Should we be doing anything else given that -
- We would like have another baby in the near future
- We would like to move from our current townhouse to a single family in a couple of years
- I may switch jobs next year

2. Any other advice to ensure we are financially independent?

Thank you so much for your advice and time!

MotoTrojan
Posts: 4514
Joined: Wed Feb 01, 2017 8:39 pm

Re: 6 months Portfolio Review

Post by MotoTrojan » Tue Jun 04, 2019 9:39 pm

It’s actually better to look at your HSA as a Roth IRA plus and not spend down on it. You can keep your receipts and at any point in the future withdraw tax-free, but by withdrawing now you’re losing out on tax-free growth which can be withdrawn tax-free down the road.

His rollover IRA seems more complicated than needed but not a bad allocation.

What kind of stock options? ISO vs. NQO? When would you sell those? May want to consider it and then reinvest in Total US or similar.

Topic Author
topaz318
Posts: 17
Joined: Wed Nov 14, 2018 1:52 pm

Re: 6 months Portfolio Review

Post by topaz318 » Wed Jun 05, 2019 1:51 pm

Thanks! I need to look into my HSA investment options.

Its a mix of stock options I got when I joined the company and RSUs as well. How do I know whether these are ISO vs. NQO?
MotoTrojan wrote:
Tue Jun 04, 2019 9:39 pm
It’s actually better to look at your HSA as a Roth IRA plus and not spend down on it. You can keep your receipts and at any point in the future withdraw tax-free, but by withdrawing now you’re losing out on tax-free growth which can be withdrawn tax-free down the road.

His rollover IRA seems more complicated than needed but not a bad allocation.

What kind of stock options? ISO vs. NQO? When would you sell those? May want to consider it and then reinvest in Total US or similar.

MotoTrojan
Posts: 4514
Joined: Wed Feb 01, 2017 8:39 pm

Re: 6 months Portfolio Review

Post by MotoTrojan » Wed Jun 05, 2019 3:03 pm

topaz318 wrote:
Wed Jun 05, 2019 1:51 pm
Thanks! I need to look into my HSA investment options.

Its a mix of stock options I got when I joined the company and RSUs as well. How do I know whether these are ISO vs. NQO?
MotoTrojan wrote:
Tue Jun 04, 2019 9:39 pm
It’s actually better to look at your HSA as a Roth IRA plus and not spend down on it. You can keep your receipts and at any point in the future withdraw tax-free, but by withdrawing now you’re losing out on tax-free growth which can be withdrawn tax-free down the road.

His rollover IRA seems more complicated than needed but not a bad allocation.

What kind of stock options? ISO vs. NQO? When would you sell those? May want to consider it and then reinvest in Total US or similar.
If this is a more established public company it is more likely that they are NQO, not sure how to find out other than look on your brokerage that holds them or read your grants which I assume you signed.

RSUs are just straight up shares. I would sell those as you get them, unless you would buy company stock if you were given a cash bonus.

Receiving $10K of RSUs in a public/liquid company is the same in every sense (including taxes) as being given a $10K cash bonus and then using it to buy shares.

Ferdinand2014
Posts: 354
Joined: Mon Dec 17, 2018 6:49 pm

Re: 6 months Portfolio Review

Post by Ferdinand2014 » Wed Jun 05, 2019 3:23 pm

Her Rollover IRA at Fidelity
Current Balance - $2,244.75
Fund - Fidelity Freedom® 2050 Fund - Class K6 (FZTKX) - 100%

Small note. That is the actively managed version of Fidelity TDF. ER is 0.5
Do you have the index version available (FIPFX)Fidelity Freedom Index Fund 2050 ER 0.12?

ExitStageLeft
Posts: 1386
Joined: Sat Jan 20, 2018 4:02 pm

Re: 6 months Portfolio Review

Post by ExitStageLeft » Wed Jun 05, 2019 5:41 pm

If a new job opportunity comes with a significant increase in income then you could end up making too much money to allow direct Roth IRA contributions. The backdoor Roth method is possible, but is complicated by his and hers rollover IRAs. I would look into rolling his into the 401k, and converting hers to a Roth IRA.

Another possibility for additional tax-advantaged savings is a solo 401k for her home business. Even if it's just a few thousand dollars per year it might be worth looking into.

Topic Author
topaz318
Posts: 17
Joined: Wed Nov 14, 2018 1:52 pm

Re: 6 months Portfolio Review

Post by topaz318 » Fri Jun 07, 2019 4:59 pm

I will have to check. Good catch!
Ferdinand2014 wrote:
Wed Jun 05, 2019 3:23 pm
Her Rollover IRA at Fidelity
Current Balance - $2,244.75
Fund - Fidelity Freedom® 2050 Fund - Class K6 (FZTKX) - 100%

Small note. That is the actively managed version of Fidelity TDF. ER is 0.5
Do you have the index version available (FIPFX)Fidelity Freedom Index Fund 2050 ER 0.12?

megabad
Posts: 1740
Joined: Fri Jun 01, 2018 4:00 pm

Re: 6 months Portfolio Review

Post by megabad » Fri Jun 07, 2019 7:20 pm

ExitStageLeft wrote:
Wed Jun 05, 2019 5:41 pm
If a new job opportunity comes with a significant increase in income then you could end up making too much money to allow direct Roth IRA contributions. The backdoor Roth method is possible, but is complicated by his and hers rollover IRAs. I would look into rolling his into the 401k, and converting hers to a Roth IRA.

Another possibility for additional tax-advantaged savings is a solo 401k for her home business. Even if it's just a few thousand dollars per year it might be worth looking into.
+1 on both of these. You are 1 good commission check away from having to do a backdoor Roth so definitely look into rollover. Solo 401k option may be good too depending on spouse's income. If low, you might consider an SEP or Simple IRA instead.

Topic Author
topaz318
Posts: 17
Joined: Wed Nov 14, 2018 1:52 pm

Re: 6 months Portfolio Review

Post by topaz318 » Wed Jun 12, 2019 10:17 am

Thank you for all the suggestions!

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