Starting our lives together

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silentwolf444
Posts: 1
Joined: Wed Jan 13, 2021 10:40 am

Starting our lives together

Post by silentwolf444 »

Hi everyone!

I am new to the forum and rather new to investing - so I'm excited to learn from and with you all.

My wife (27) and I (32) recently got married and we are starting to figure out our financial future.

After bringing our finances together, we have
- about $60k in cash (We saved mostly because of employment uncertainty which has stabilized, but we also didn’t know a lot about investing. This includes a one-year emergency fund of expenses - $36k, about $6k general savings, $4k from wedding gifts, and about $14k we are saving to pay down our only debt - $32k in student loans -- her student loan is about $12k with an interest rate of about 5.2% and mine is about $20k with an interest rate of 6.3%),
- about $19K in my 403b with TIAA CREF in a TLFRX Target Date Fund (I recently read The Simple Path to Wealth and realized that my expense ratio is too high at .870%),
- about $4k in my wife’s ROTH IRA with American Funds,
- about $6k in my ROTH IRA that I just opened with Vanguard,
- and about $1200 in an HSA.

After taxes, our take-home is about $65k. After expenses, we save about $3k a month. Our goal is to pay off our student loans this year to be debt free. Looking for advice and direction. From reading The Simple Path to Wealth and skimming through Bogleheads material, I am under the impression that I should put all of my ROTH IRA in VTSAX and maybe some in BND or VBLTX, given my age and risk tolerance. I am working on my PhD and my wife is finishing her MA - so we expect that both of our incomes will increase down the road.

Not certain what to do with my 403b with TIAA CREF (I have TLFRX, but the options are below.), our HSA (we intend to max out this account moving forward this year and can invest any amount over $1k. Other than about $750 in yearly medical bills, we intend to invest everything else – options below), and with our cash savings (all of it is in an online account earning .50%, but wondering how to invest this money). We have said we are comfortable with a 90% stocks - 10% bonds split, but we are not certain what amount to allocate between US and international.

Would greatly appreciate your insight and feedback!

Thanks!


TIAA CREF OPTIONS

American Funds EuroPacific Growth Fund R4 (REREX) 0.81%
American Funds Washington Mutual Investors Fund R4 (RWMEX) 0.62%
Baron Growth Fund Retail Class (BGRFX) 1.29%
Columbia Mid Cap Index Fund - Class A (NTIAX) 00.58%
Columbia Small Cap Index Fund Class A (NMSAX) .45%
MFS Mid Cap Value Fund Class R3 (MVCHX) 1.07%
T. Rowe Price Blue Chip Growth Adv (PABGX) 0.96%
TIAA Real Estate Account (QREARX) .78%
TIAA-CREF International Equity Index Fund (Retirement) (TRIEX) 0.31% / 0.31%
TIAA-CREF Lifecycle 2010 Fund (Retirement) (TCLEX) .62%
TIAA-CREF Lifecycle 2015 Fund (Retirement) (TCLIX) 0.77%
TIAA-CREF Lifecycle 2020 Fund (Retirement) (TCLTX) 0.78%
TIAA-CREF Lifecycle 2025 Fund (Retirement) (TCLFX) 0.80%
TIAA-CREF Lifecycle 2030 Fund (Retirement) (TCLNX) 0.81%
TIAA-CREF Lifecycle 2035 Fund (Retirement) (TCLRX) 0.83%
TIAA-CREF Lifecycle 2040 Fund (Retirement) (TCLOX) 0.85%
TIAA-CREF Lifecycle 2045 Fund (Retirement) (TTFRX) 0.86%
TIAA-CREF Lifecycle 2050 Fund (Retirement) (TLFRX) 0.87%
TIAA-CREF Lifecycle 2055 Fund (Retirement) (TTRLX) 0.89%
TIAA-CREF Lifecycle 2060 Fund (Retirement) (TLXRX) 0.97%
TIAA-CREF Lifecycle Retirement Income Fund (Retirement) (TLIRX) 0.78%
TIAA-CREF S&P 500 Index Fund (Retirement) (TRSPX) 0.30%
TIAA-CREF Social Choice Equity Fund (Retirement) (TRSCX) 0.42%
Vanguard Explorer Fund Investor (VEXPX) 0.45%
Wells Fargo Core Bond R6 (WTRIX) 0.44%
Wells Fargo Small Company Value Admin (SCVIX) 1.25%




HSA OPTIONS

American Funds Fundamental Invs R6 (RFNGX) 0.28
American Funds Washington Mutual R6 (RWMGX) 0.27
BlackRock High Yield Bond K (BRHYX) 0.51
Goldman Sachs Intl Eq Insghts Instl (GCIIX) 0.85
MFS New Discovery Value R6 (NDVVX) 0.87
T. Rowe Price Diversified Mid Cap Gr (PRDMX) 0.80
TIAA-CREF Real Estate Sec Instl (TIREX) 0.50
Vanguard 500 Index Admiral (VFIAX) 0.04
Vanguard Developed Markets Index Admiral (VTMGX) 0.07
Vanguard Inflation-Protected Secs Adm (VAIPX) 0.10
Vanguard Interm-Term Bond Index Adm (VBILX) 0.07
Vanguard LifeStrategy Cnsrv Gr Inv (VSCGX) 0.12
Vanguard LifeStrategy Growth Inv (VASGX) 0.14
Vanguard LifeStrategy Moderate Gr Inv (VSMGX) 0.13
Vanguard Mid Cap Index Admiral (VIMAX) 0.05
Vanguard Selected Value Inv (VASVX) 0.33
Vanguard Small Cap Index Adm (VSMAX) 0.05
Vanguard Treasury Money Market Investor (VUSXX) 0.09
Vanguard US Growth Admiral (VWUAX) 0.28
Virtus KAR Small-Cap Growth I (PXSGX) 1.11
Last edited by silentwolf444 on Wed Jan 13, 2021 3:54 pm, edited 8 times in total.
tashnewbie
Posts: 1178
Joined: Thu Apr 23, 2020 12:44 pm

Re: Starting our lives together

Post by tashnewbie »

Welcome to the forum and congrats on the marriage.
silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm
After bringing our finances together, we have
- about $60k in cash (We saved mostly because of employment uncertainty which has stabilized, but we also didn’t know a lot about investing. This includes a one-year emergency fund of expenses - $36k, about $6k general savings, $4k from wedding gifts, and about $14k we are saving to pay down our only debt - $32k in student loans),
If you feel comfortable with the job security/stability, I'd probably take the $60k and use it to completely pay off the SL. That'll leave you ~$28k, which is ~9 months of expenses, which many would consider a sufficient emergency fund, but you have to decide if you're comfortable with that. Maybe you had other plans for the $10k in general savings and wedding gifts? As they say, money is fungible, and you can build that $10k cash position back up over time with your regular cash flow/savings, if desired.
silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm - about $19K in my 403b with TIAA CREF in a TLFRX Target Date Fund (I recently read The Simple Path to Wealth and realized that my expense ratio is too high at .70%),
You didn't list any of the other fund expense ratios in your 403b. Add that information to your original post by using the pencil icon in the top right corner of your original post. Having all of the relevant information in one place makes it easier for others to review your post.

Assuming it's a relatively low-cost, I'd probably just use TIAA-CREF S&P 500 Index Fund (Retirement) (TRSPX).
silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm - about $4k in my wife’s ROTH IRA with American Funds,
- about $6k in my wife that I just opened with Vanguard,
It's not clear, but it looks like you just opened and funded a Roth IRA at Vanguard for your wife with $6k. If so, I would consolidate the American Funds Roth IRA at Vanguard. You'll probably need/want to sell the AF fund, and that may be easier to do before transferring to VG (VG will probably charge $50-75 to sell each fund; you should call/chat them to confirm).

I would stick with something like VTSAX in your Roth IRA.
silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm - and about $1200 in an HSA.
Are you planning to use your HSA as a "stealth IRA" and use it for medical expenses in retirement while cash flowing medical expenses now, or do you plan to use it for current medical expenses?

If you're going to use it as another retirement vehicle, I'd invest any amount that you're allowed to in Vanguard 500 Index Admiral (VFIAX). You could also use Vanguard Developed Markets Index Admiral (VTMGX) for some international exposure.


If you have $3k/month that you can save, I think you should probably increase your deferral percentage to your 403b, especially if the 500 index fund is relatively low-cost or there are other low-cost options. At the very least, add enough into the 403b to get the full employer match, if any.

You should definitely open a Roth IRA for him and max that ($6k) each year. I'd get full employer match in 403b, max HSA, max Roth IRAs for both of you, then add more to 403b as able.
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ruralavalon
Posts: 20223
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Starting our lives together

Post by ruralavalon »

Welcome to the forum :) .

Congratulations on your recent marriage.

It's good to see that you have an emergency fund, and are p!naming to make the maximum annual employee contribution ($19.5k) to your 403b account, and pay off your student debt soon. Will you also contribute the annual maximum of $6k to each of the Roth IRAs?

silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm Hi everyone!

I am new to the forum and rather new to investing - so I'm excited to learn from and with you all.

My wife (27) and I (32) recently got married and we are starting to figure out our financial future.

After bringing our finances together, we have
- about $60k in cash (We saved mostly because of employment uncertainty which has stabilized, but we also didn’t know a lot about investing. This includes a one-year emergency fund of expenses - $36k, about $6k general savings, $4k from wedding gifts, and about $14k we are saving to pay down our only debt - $32k in student loans),
What are the balances and interest rates on your student debt? Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your), it helps a lot if all of your information is in one place.

silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm- about $19K in my 403b with TIAA CREF in a TLFRX Target Date Fund (I recently read The Simple Path to Wealth and realized that my expense ratio is too high at .70%),
It would help if you added the expense ratios for each fund in your 403b plan.

Is there also a 457b plan offered at work?

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your), it helps a lot if all of your information is in one place.

silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm- about $4k in my wife’s ROTH IRA with American Funds,
I suggest that she rollover that Roth IRA to a Roth IRA at a low cost fund provider like Vanguard, Fidelity or Schwab. My personal preference is Vanguard.

silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm- about $6k in my wife that I just opened with Vanguard,
Is that a typo? Do you have a Roth IRA at Vanguard?

silentwolf444 wrote: Wed Jan 13, 2021 12:17 pm- and about $1200 in an HSA.

After taxes, our take-home is about $65k. After expenses, we save about $3k a month. Our goal is to pay off our student loans this year to be debt free. Looking for advice and direction. From reading The Simple Path to Wealth and skimming through Bogleheads material, I am under the impression that I should put all of my ROTH IRA in VTSAX and maybe some in BNX or VBLTX, given my age and risk tolerance.
In general a bond fund is best held in a tax-deferred account like a traditional 403b account, rather than in a Roth IRA.

In general a Roth IRA is best used to hold stock funds like Vanguard Total Stock Market Index Fund (VTSAX).

What is your desired asset allocation (the stock/bond mix, and the domestic/international stock mix) that you want to aim for?

It is not necessary to have all elements of your desired asset allocation in each account.

In general it's often best to coordinate investments among all, rather than treat each account separately.


silentwolf444 wrote: Wed Jan 13, 2021 12:17 pmNot certain what to do with my 403b with TIAA CREF (I have TLFRX, but the options are below.), our HSA (we intend to max out this account moving forward this year and can invest any amount over $1k – options below), and with our cash savings (all of it is in an online account earning .50%, but wondering how to invest this money).

Would greatly appreciate your insight and feedback!

Thanks!


TIAA CREF OPTIONS

American Funds EuroPacific Growth Fund R4 (REREX)
American Funds Washington Mutual Investors Fund R4 (RWMEX)
Baron Growth Fund Retail Class (BGRFX)
Columbia Mid Cap Index Fund - Class A (NTIAX)
Columbia Small Cap Index Fund Class A (NMSAX)
MFS Mid Cap Value Fund Class R3 (MVCHX)
T. Rowe Price Blue Chip Growth Adv (PABGX)
TIAA Real Estate Account (QREARX)
TIAA-CREF International Equity Index Fund (Retirement) (TRIEX)
TIAA-CREF Lifecycle 2010 Fund (Retirement) (TCLEX)
TIAA-CREF Lifecycle 2015 Fund (Retirement) (TCLIX)
TIAA-CREF Lifecycle 2020 Fund (Retirement) (TCLTX)
TIAA-CREF Lifecycle 2025 Fund (Retirement) (TCLFX)
TIAA-CREF Lifecycle 2030 Fund (Retirement) (TCLNX)
TIAA-CREF Lifecycle 2035 Fund (Retirement) (TCLRX)
TIAA-CREF Lifecycle 2040 Fund (Retirement) (TCLOX)
TIAA-CREF Lifecycle 2045 Fund (Retirement) (TTFRX)
TIAA-CREF Lifecycle 2050 Fund (Retirement) (TLFRX)
TIAA-CREF Lifecycle 2055 Fund (Retirement) (TTRLX)
TIAA-CREF Lifecycle 2060 Fund (Retirement) (TLXRX)
TIAA-CREF Lifecycle Retirement Income Fund (Retirement) (TLIRX)
TIAA-CREF S&P 500 Index Fund (Retirement) (TRSPX)
TIAA-CREF Social Choice Equity Fund (Retirement) (TRSCX)
Vanguard Explorer Fund Investor (VEXPX)
Wells Fargo Core Bond R6 (WTRIX)
Wells Fargo Small Company Value Admin (SCVIX)
Again please simply add the expense ratios for each fund to your original post using the edit button(the pencil icon near the upper right corner of your), it helps a lot if all of your information is in one place.

The expense ratios are critical in selecting funds to use. Many times the expense ratios charged in a work-based plan are different than those charged the general public for the identical funds.

The funds that look interesting, depending on their expense ratios, include:
1) TIAA-CREF S&P 500 Index Fund (Retirement) (TRSPX);
2) American Funds EuroPacific Growth Fund R4 (REREX), OR
TIAA-CREF International Equity Index Fund (Retirement) (TRIEX); and
3) Wells Fargo Core Bond R6 (WTRIX).


silentwolf444 wrote: Wed Jan 13, 2021 12:17 pmHSA OPTIONS

American Funds Fundamental Invs R6 (RFNGX)
American Funds Washington Mutual R6 (RWMGX)
BlackRock High Yield Bond K (BRHYX)
Goldman Sachs Intl Eq Insghts Instl (GCIIX)
MFS New Discovery Value R6 (NDVVX)
T. Rowe Price Diversified Mid Cap Gr (PRDMX)
TIAA-CREF Real Estate Sec Instl (TIREX)
Vanguard 500 Index Admiral (VFIAX)
Vanguard Developed Markets Index Admiral (VTMGX)
Vanguard Inflation-Protected Secs Adm (VAIPX)
Vanguard Interm-Term Bond Index Adm (VBILX)
Vanguard LifeStrategy Cnsrv Gr Inv (VSCGX)
Vanguard LifeStrategy Growth Inv (VASGX)
Vanguard LifeStrategy Moderate Gr Inv (VSMGX)
Vanguard Mid Cap Index Admiral (VIMAX)
Vanguard Selected Value Inv (VASVX)
Vanguard Small Cap Index Adm (VSMAX)
Vanguard Treasury Money Market Investor (VUSXX)
Vanguard US Growth Admiral (VWUAX)
Virtus KAR Small-Cap Growth I (PXSGX)
Please simply add the expense ratios for each fund to your original post using the edit button(the pencil icon near the upper right corner of your), it helps a lot if all of your information is in one place.

The funds which look interesting, depending on their expense ratios, include:
1) Vanguard 500 Index Admiral (VFIAX);
2) Vanguard Developed Markets Index Admiral (VTMGX); and
3) Vanguard Intermediate-Term Bond Index Admiral (VBILX).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
Katietsu
Posts: 4343
Joined: Sun Sep 22, 2013 1:48 am

Re: Starting our lives together

Post by Katietsu »

You are doing great with a take home of $65,000. Is this about what you expect to earn in the future? Are either of you expecting greater increases in income than just cost of living? Are either of you hoping for a pension? Some of these answers would let us advise you better on which of your available accounts would be the best place to direct your savings.

Also, do you have more near term goals than retirement? Saving for a house down payment? Children? If kids, will you need to save in the HSA to pay for the pregnancy and birth related expenses?

I too got a little lost in what you are able to save in total. Can you please list the amount you have to save in total dollars each year?

You can about cut the expense in half by switching it to the TIAA S and P 500 and the International Equity Fund. However, at this point, the difference would be 22 cents a day. I am not trying to discourage you. But, I would probably just leave it in the target date fund for now. Later, as you get a better understanding of all the aspects of different types of accounts, rebalancing, asset allocation and such, then you can decide what you want to do.

I know we are throwing a lot out there. Hopefully, we can help you work through it. And hopefully those of us responding people will aim their answers at a young couple with a $65k take home pay who is at the beginning of their journey.
carmonkie
Posts: 315
Joined: Fri Jun 29, 2018 4:31 pm

Re: Starting our lives together

Post by carmonkie »

Congrats on your marriage.
Let her manage her own investments or have her participate in the why, how, where
Why are you investing the way you are
How are you investing the money
Where is the money being invested.

She might leave all the investment to you, but she needs to, at a minimum know where and how is the money invested. If you read this forum many spouses have 0 interest in the investment and when things happen, they don't know what to do. Write down your IPS (Investment Policy Statement) and sit down with her once or twice a year and go over the accounts, asset allocation, balances, etc. Transparent finances = happy marriage*10

WIKI to IPS.
https://www.bogleheads.org/wiki/Investm ... _statement
deltaneutral83
Posts: 1780
Joined: Tue Mar 07, 2017 4:25 pm

Re: Starting our lives together

Post by deltaneutral83 »

Student loans, especially at 5-6% IMO should be taken care of the next time you login. Build your emergency fund back up, don't know if you need 6 months just yet with no dependents? In fact, many here may consider debt at 5-6% as an emergency. Match/HSA/Roth/Back to 401k/Taxable is what I would do afterward and into the future.
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Wiggums
Posts: 3165
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Re: Starting our lives together

Post by Wiggums »

Congrats on your marriage And welcome to the form.

Paying off the student loans would be my first priority Because of the high interest rate.

I agree with the previous response that these funds look good.
1) Vanguard 500 Index Admiral (VFIAX);
2) Vanguard Developed Markets Index Admiral (VTMGX); and
3) Vanguard Intermediate-Term Bond Index Admiral (VBILX).
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ruralavalon
Posts: 20223
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Starting our lives together

Post by ruralavalon »

silentwolf444 wrote: Wed Jan 13, 2021 12:17 pmabout $60k in cash (We saved mostly because of employment uncertainty which has stabilized, but we also didn’t know a lot about investing. This includes a one-year emergency fund of expenses - $36k, about $6k general savings, $4k from wedding gifts, and about $14k we are saving to pay down our only debt - $32k in student loans -- her student loan is about $12k with an interest rate of about 5.2% and mine is about $20k with an interest rate of 6.3%),
I suggest that you use $32k of your cash to pay off the student debt, as your first priority. Wiki article "Prioritizing Investments", link.

If you wish you could use some of the cash to complete her Roth IRA contribution (another $2k) for tax year 2020, anytime before tax day in April 2021.

That totals $34k, leaving $26k for the emergency fund.


silentwolf444 wrote: Wed Jan 13, 2021 12:17 pmabout $19K in my 403b with TIAA CREF in a TLFRX Target Date Fund (I recently read The Simple Path to Wealth and realized that my expense ratio is too high at .870%),
- about $4k in my wife’s ROTH IRA with American Funds,
- about $6k in my ROTH IRA that I just opened with Vanguard,
- and about $1200 in an HSA.
That high expense ratio for the target date fund in your 403b account won't make much difference while the account balance is in that range.

For simplicity you could use the target date fund in the 403b for now, and simply use target date funds in the taxable other accounts as well. Use of target date funds seems to protect investors against behavioral mistakes, and so give higher investor returns. Morningstar (8/15/2019) "Mind the Gap 2019", link.

Then after the portfolio has grown a bit (to the point that the 0.87% expense ratio makes a difference, and you have the time and experience to DIY), you could switch to this fund line-up in your accounts. (Current total = $30.2k.)

His 403b (currently $19k; 63% of current total)
TIAA-CREF S&P 500 Index Fund (over 80% of U.S. stock market, low expense ratio) (TRSPX) ER 0.30%
TIAA-CREF International Equity Index Fund (developed markets only, low expense ratio) (TRIEX) ER 0.31%
Wells Fargo Core Bond R6 (Intermediate-term, investment-grade bonds, average expense ratio) (WTRIX) ER 0.44%
(Those expense ratios are a bit "high" by Boglehead standards, but low or average compared to other similar type funds, and certainly reasonable enough to use those funds.)

Her Roth IRA @ Vanguard (currently $4k; 13% of current total)
Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%

His Roth IRA @ Vanguard (currently $6k; 20% of current total)
Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%

HSA (currently $1.2k; 4% of current total)
Vanguard Intermediate-Term Bond Index Admiral (VBILX) ER 0.07%

silentwolf444 wrote: Wed Jan 13, 2021 12:17 pmAfter taxes, our take-home is about $65k. After expenses, we save about $3k a month. Our goal is to pay off our student loans this year to be debt free. Looking for advice and direction. From reading The Simple Path to Wealth and skimming through Bogleheads material, I am under the impression that I should put all of my ROTH IRA in VTSAX and maybe some in BND or VBLTX, given my age and risk tolerance. I am working on my PhD and my wife is finishing her MA - so we expect that both of our incomes will increase down the road.
Does your employer's 403b plan permit Roth contributions? Is there an employer match, and if so how much?

About how much (in dollars) do you believe that you might be able to contribute annually to investing (total, all accounts) in future years after the student debt is paid off? In other words are you likely to be able to contribute the full employee contribution of $19.5k annually to his 403b, and the full $6k annually to each of the Roth IRAs, and any more?

What is your desired asset allocation (the stock/bond mix, and the domestic/international stock mix) that you want to aim for?

. . . . .

A quick education for a beginning investor is Dr. Bernstein's free short on-line book, "If You Can". Also take a look at the Boglehead’s wiki, the "getting started" link I give below.

To go beyond the most basic I suggest that you also read one or two books on investing. Wiki article, "Books: recommendations and reviews".When I first stated managing my own investments, I found this tutorial very helpful in learning investing terminology/jargon and some of the investing basics.Morningstar, "Investing Classroom".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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