Emergency funds: One month expenses (~$5000) in checking, 4 months in a HYSA
Debt: $170,000 mortgage @ 3.00% just refinanced. Home value $255,000, payoff July 2050
Tax Filing Status: MFJ with a young child
Tax Rate: 12% Federal, 3% State
State of Residence: Pennsylvania
Age: Early 40s
Desired Asset allocation: 85% stocks / 15% bonds (too risky with 15-20 years left working?)
Desired International allocation: 30% of stocks (too high?)
Current Portfolio: $415,000
Current retirement assets
4.7% Vanguard Institutional Index Instl (VINIX) (ER 0.04%)
Company match? Normally 50% on the first 8%, due to COVID was lowered to 50% on first 2% for the rest of 2020
My tIRA at Vanguard
4.9% Vanguard Total Bond Market Index Fund (VBTLX) (ER 0.05%)
10.4% Vanguard Total International Stock Index (VTIAX) (ER 0.11%)
18.7% Vanguard Total Stock Market Index Fund (VTSAX) (ER 0.04%)
My Roth IRA at Vanguard
3.3% Vanguard Total Bond Market Index Fund (VBTLX) (ER 0.05%)
7.0% Vanguard Total International Stock Index (VTIAX) (ER 0.11%)
11.0% Vanguard Total Stock Market Index Fund (VTSAX) (ER 0.04%)
0.5% $2,000 Cash account needed to invest any additional funds
2.7% VANGUARD 500 INDEX ADMIRAL (VFIAX) (ER 0.04%)
0.8% VANGUARD TTL INTL STK IND ADM (VTIAX) (ER 0.11%)
1.7% VANGUARD TTL BND MRKT IDX ADM (VBTLX) (ER 0.05%)
2.5% Mutual of America 2045 Target Date fund (ER 1.69%, one of the lowest they offer)
Company match? 50% of the first 3%. Due to the outrageous expense ratios, we only contribute enough to get the full match.
Spouse tIRA at Vanguard
5.0% Vanguard Total Bond Market Index Fund (VBTLX) (ER 0.05%)
10.3% Vanguard Total International Stock Index (VTIAX) (ER 0.11%)
16.5% Vanguard Total Stock Market Index Fund (VTSAX) (ER 0.04%)
New annual Contributions
$5,000 his 401k + $2,000 normal match (lowered to $500 in 2020 due to COVID)
$1,500 her 403b + $750 match
$6,000 his tIRA
$6,000 her tIRA
$5,900 his HSA + $1,100 company auto match
$1,200 + $200 Employer match into a 529 Plan which I don't consider part of my retirement income/portfolio at all (~$11,000 balance)
Some additional background information
Spouse and I are both make very similar (~$50,000) salaries. I work for a 401k/HSA provider which allows for very low-cost investment options. Spouse works for a non-profit and their 403b plan is awful, but we still contribute 3% to get the full match.
1. We just closed on our refinance, which lowered our payments ~$200/month. I'd like retire in about 15 years if possible, but I'm not super keen on pulling the plug with 15 more years of payments. However, chances of market outperforming 3% in the next 15 years is pretty good. We have about $500/month extra that we could either:
- Put towards principal to pay off mortgage in 14 years
- Add to my 401k contributions
- Bump HYSA up to 6+ months
- Something else?
3. Chances of us retiring in 15 years with our current assets and contributions?
4. Regarding asset allocation, is 85/15 too risky for someone with a 15-20 horizon? Is 30% international too high? I know you're not supposed to chase past performance, but I hate the returns we've gotten from VTIAX in the past 10 years compared to VTSAX.
Thanks in advance for any insight!