Allocation for roth IRA and taxable with Schwab

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Topic Author
Justpyro
Posts: 6
Joined: Thu Mar 21, 2019 9:05 am

Allocation for roth IRA and taxable with Schwab

Post by Justpyro » Tue Aug 13, 2019 12:01 am

Hi, after reading the Wiki, i finally made up my mind on my desired allocation for my roth IRA and hopefully one day for my taxable account.

I would like to go 10% bonds (age - 20), 90% equity.

Regarding the equity, i would like to go for the following:
- 75% SCHB (Multi Cap US)
- 20% SCHF (international)
- 5% SCHE (Emerging).

Does this allocation make sense or do you see any issues with it ?

I currently have 10 k in a roth IRA (100% SCHB). is it okay to rebalance now? or should i wait next year when I allocate new funds to my roth IRA to rebalance?

thanks for your advice.

typical.investor
Posts: 967
Joined: Mon Jun 11, 2018 3:17 am

Re: Allocation for roth IRA and taxable with Schwab

Post by typical.investor » Tue Aug 13, 2019 1:46 am

Justpyro wrote:
Tue Aug 13, 2019 12:01 am

Regarding the equity, i would like to go for the following:
- 75% SCHB (Multi Cap US)
- 20% SCHF (international)
- 5% SCHE (Emerging).
Looks fine!

Strictly speaking, a market weighted portfolio with 90% stocks - 10% bonds, and with 75% US - 25% Intl would be:

SCHB 67.5%
SCHF 15.2%
SCHC 2.2%
SCHE 5.1%
SCHZ 10.0%

SCHC (small cap dev intl.) is such a small allocation that most here say roll it into SCHF or SCHE.

Your targeted portfolio isn't far off, so no worries. To simplify it, I might go something like:

SCHB 70%
SCHF 20%
SCHE 5%
SCHZ 10%

FYI, there is an online calculator to see a market cap weighted portfolio using Schwab ETFs here:https://docs.google.com/spreadsheets/d/ ... sp=sharing

As for rebalance timing, why not use your next contribution to move you towards your AA? 10k in SCHB until next year or whenever the money available is really no problem. I prefer to rebalance with new contributions and/or dividends.

Topic Author
Justpyro
Posts: 6
Joined: Thu Mar 21, 2019 9:05 am

Re: Allocation for roth IRA and taxable with Schwab

Post by Justpyro » Tue Aug 13, 2019 3:28 am

awesome thanks. is there an easy way to modify the spreadsheet to remove the SCHC ETF

typical.investor
Posts: 967
Joined: Mon Jun 11, 2018 3:17 am

Re: Allocation for roth IRA and taxable with Schwab

Post by typical.investor » Tue Aug 13, 2019 3:57 am

Justpyro wrote:
Tue Aug 13, 2019 3:28 am
awesome thanks. is there an easy way to modify the spreadsheet to remove the SCHC ETF
Seriously, you are going to hack the spreadsheet?

Ok, if you must...be signed in to a google account and make a copy of the sheet into your g-drive account.

Then look at the locked (but you own the copy so can edit it) data tab. You want to add D9 (SCHC) to D8 (SCHF) and set D9 to zero.

So D8 becomes

Code: Select all

=Calculator!G31/(Calculator!G31+Calculator!G32+Calculator!G33)+Calculator!G32/(Calculator!G31+Calculator!G32+Calculator!G33)
And D9 becomes

Code: Select all

=0
You'll then see SCHC is zero, SCHE hasn't changed, the total is 100% and SCHF is a little over 77% (as of now).

Thus, your selected portfolio will be:

SCHB 67.5%
SCHF 17.4%
SCHC 0.0%
SCHE 5.1%
SCHZ 10.0%

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