Portfolio review / Retirement Asset Allocations

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Topic Author
vivienw
Posts: 78
Joined: Wed Jan 13, 2021 10:51 pm

Portfolio review / Retirement Asset Allocations

Post by vivienw »

Hello Bogleheads,

I have been building my portfolio through research and with the advice of a fee-only advisor. I'd love some feedback on whether my allocations could use any improvements, especially with my retirement accounts. A large chunk of my entire portfolio is in my retirement accounts because I work both freelance and for a company; 25% of my freelance income was put into a new Solo-401k this year for tax purposes.

Currently most active are my Solo-401k and company 401k.
I am both self-employed and a W2 employee.

My information:

Emergency funds: 7 months worth of living expenses in HYSA
Debt: 30-year Mortgage, $428k at 2.75%

Tax filing status: Head of household, California
Age 29 / Mother age 67 (dependent)

Tax rate: 24% federal, 9.3% state

Current stock/bond allocation: 90/10 - suggested by my fee-only advisor

Total portfolio value: 105,790

Taxable
19% in Vanguard Brokerage (21k)

Allocations:
60% Vanguard Total Stock Market Index Fund (VTSAX, expense ratio 0.04%)
30% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
10% Vanguard Total Bond Market Index Fund (VTBLX, 0.05%)


Retirements

My SEP IRA at Fidelity
35.8% ($37,900)

Allocations:
6% Fidelity Freedom Index 2050 Fund Investor Class (FIPFX, 0.12%)
35.8% Fidelity Total Market Index Fund (FSKAX, 0.015%)
18% Fidelity 500 Index Fund (FXAIX, 0.015%)

My Solo 401k at Fidelity
4.9% ($5253)

Allocations:
60% Fidelity Total Market Index Fund (FSKAX, 0.015%)
30% Fidelity Total International Index Fund (FTIHX, 0.06%)
10% Fidelity U.S. Bond Index Fund (FXNAX, 0.025%)

My Company 401k at Vanguard
Contributions maxed at 18% Traditional
27% ($28,750)

Allocations:
46% Vanguard Institutional Index Fund Institutional Shares (VINIX, 0.035%)
29% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
9.7% Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX, 0.025%)
8% Vanguard Mid-Cap Index Fund Institutional Shares (VMCIX, 0.04%)
7% Vanguard Small-Cap Index Fund Institutional Shares (VSCIX, 0.04%)


My Roth IRA at Fidelity
5.6% ($5890) Fidelity Total Market Index Fund (FSKAX, 0.015%)

My Roth IRA at Vanguard
6% ($6587)
Allocation: 50/50 between VTSAX and VTWAX --- thoughts?
Vanguard Total Stock Market Index Fund (VTSAX, 0.04%)
Vanguard Total World Stock Index Fund Admiral Shares (VTWAX, 0.1%)


Old 401k at Fidelity
$414 in BTC Lifepath 2055 - Should I leave this where it is?


New contributions
Additional $5,750 I am planning to put into my Solo-401k.

Questions:
1) I could use some feedback on my SEP-IRA allocations as I don't know what's good for this type of account. I have in my notes that generally, VBTLX or FXNAX (bonds) are to be held in IRAs, VTSAX or FSKAX in Roth IRAs, and VTSAX or FSKAX in taxable.

2) For my situation, is 60% domestic stock / 30% intl stock / 10% bonds still the best way to go for investing?


If I need to format this post differently, please let me know and I will correct it. Thanks in advance.
Last edited by vivienw on Thu Oct 14, 2021 2:45 pm, edited 3 times in total.
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David Jay
Posts: 11796
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Portfolio review / Retirement Asset Allocations

Post by David Jay »

Let me start by giving you props for a great start. I made my first 401K contribution at age 30 so you are way ahead of me!

The only thing I see is that you are basically using a 3-fund style allocation in each individual account. I would look at moving to a more tax-efficient strategy over the next few years, using 3-fund style investing in your overall portfolio but not in every individual account. In particular, I would not hold bonds in taxable because bonds are not tax efficient.

Here is some detail on tax efficient asset placement from the Wiki: https://www.bogleheads.org/wiki/Tax-eff ... _placement
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
User avatar
Watty
Posts: 23590
Joined: Wed Oct 10, 2007 3:55 pm

Re: Portfolio review / Retirement Asset Allocations

Post by Watty »

You may get better responses if you edit your post to include the fund names in addition to the ticker symbol. You can use the icon with the pencil on it to edit your post.
HomeStretch
Posts: 6988
Joined: Thu Dec 27, 2018 3:06 pm

Re: Portfolio review / Retirement Asset Allocations

Post by HomeStretch »

Good savings rate, your 90/10 asset allocation is reasonable and your portfolio holdings look to be low-ER.

Your portfolio could be simplified with account consolidation. Consider:
1) Rolling over the old Fidelity 401k and the Fidelity SEP-IRA (if it is not an active plan) into either your Fidelity Solo 401k or Vanguard 401k, if it accepts rollovers in.
2) Consolidate the two Roth IRAs into one at either Vanguard or Fidelity.

As David Jay posted, your portfolio could also benefit from tax efficient fund placement. It will be much easier to do so with fewer accounts after consolidation. Consider holding one US equity fund in your Taxable and Roth IRA. Hold everything else in the 401k’s.
tashnewbie
Posts: 2050
Joined: Thu Apr 23, 2020 12:44 pm

Re: Portfolio review / Retirement Asset Allocations

Post by tashnewbie »

I agree you're doing a great job to be thinking about these things at your age!

You've included some important information in this post but not all the information forum members would need to give more-informed advice. I recommend editing your post (use the pencil icon) to add all the information suggested in this portfolio review format: Asking Portfolio Questions

For example, what are your marginal tax brackets (federal and state)?

What are the fund names and expense ratios for each fund you're using?

There are a lot of accounts.

Which ones are currently active among the SEP IRA, solo 401k, and company 401k?

Are you both self-employed and a W2 employee?

No reason to have 2 Roth IRAs. Pick which provider you like better and consolidate the Roth IRAs there.
Topic Author
vivienw
Posts: 78
Joined: Wed Jan 13, 2021 10:51 pm

Re: Portfolio review / Retirement Asset Allocations

Post by vivienw »

David Jay wrote: Wed Oct 13, 2021 8:43 pm Let me start by giving you props for a great start. I made my first 401K contribution at age 30 so you are way ahead of me!

The only thing I see is that you are basically using a 3-fund style allocation in each individual account. I would look at moving to a more tax-efficient strategy over the next few years, using 3-fund style investing in your overall portfolio but not in every individual account. In particular, I would not hold bonds in taxable because bonds are not tax efficient.

Here is some detail on tax efficient asset placement from the Wiki: https://www.bogleheads.org/wiki/Tax-eff ... _placement
Thank you so much! :D
Watty wrote: Wed Oct 13, 2021 9:07 pmYou may get better responses if you edit your post to include the fund names in addition to the ticker symbol. You can use the icon with the pencil on it to edit your post.
Good point, I've edited the original post to reflect the fund names and expense ratios.
Topic Author
vivienw
Posts: 78
Joined: Wed Jan 13, 2021 10:51 pm

Re: Portfolio review / Retirement Asset Allocations

Post by vivienw »

HomeStretch wrote: Wed Oct 13, 2021 9:55 pm Good savings rate, your 90/10 asset allocation is reasonable and your portfolio holdings look to be low-ER.

Your portfolio could be simplified with account consolidation. Consider:
1) Rolling over the old Fidelity 401k and the Fidelity SEP-IRA (if it is not an active plan) into either your Fidelity Solo 401k or Vanguard 401k, if it accepts rollovers in.
2) Consolidate the two Roth IRAs into one at either Vanguard or Fidelity.

As David Jay posted, your portfolio could also benefit from tax efficient fund placement. It will be much easier to do so with fewer accounts after consolidation. Consider holding one US equity fund in your Taxable and Roth IRA. Hold everything else in the 401k’s.
tashnewbie wrote: Thu Oct 14, 2021 8:03 am I agree you're doing a great job to be thinking about these things at your age!

You've included some important information in this post but not all the information forum members would need to give more-informed advice. I recommend editing your post (use the pencil icon) to add all the information suggested in this portfolio review format: Asking Portfolio Questions

For example, what are your marginal tax brackets (federal and state)?

What are the fund names and expense ratios for each fund you're using?

There are a lot of accounts.

Which ones are currently active among the SEP IRA, solo 401k, and company 401k?

Are you both self-employed and a W2 employee?

No reason to have 2 Roth IRAs. Pick which provider you like better and consolidate the Roth IRAs there.
I really appreciate the feedback! I agree there are too many accounts but I wasn't sure how to best consolidate them. I've also edited my original post for clarity.
Currently the active accounts are Solo-401k and company 401k.
Thank you! :happy
GetSmarter
Posts: 173
Joined: Tue Oct 02, 2018 11:49 pm

Re: Portfolio review / Retirement Asset Allocations

Post by GetSmarter »

vivienw wrote: Wed Oct 13, 2021 7:47 pm Hello Bogleheads,

I have been building my portfolio through research and with the advice of a fee-only advisor. I'd love some feedback on whether my allocations could use any improvements, especially with my retirement accounts. A large chunk of my entire portfolio is in my retirement accounts because I work both freelance and for a company; 25% of my freelance income was put into a new Solo-401k this year for tax purposes.

Currently most active are my Solo-401k and company 401k.
I am both self-employed and a W2 employee.

My information:

Emergency funds: 7 months worth of living expenses in HYSA
Debt: 30-year Mortgage, $428k at 2.75%

Tax filing status: Head of household, California
Age 29 / Mother age 67 (dependent)

Tax rate: 24% federal, 9.3% state

Current stock/bond allocation: 90/10 - suggested by my fee-only advisor

Total portfolio value: 105,790

Taxable
19% in Vanguard Brokerage (21k)

Allocations:
60% Vanguard Total Stock Market Index Fund (VTSAX, expense ratio 0.15%)
30% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
10% Vanguard Total Bond Market Index Fund (VTBLX, 0.05%)


Retirements

My SEP IRA at Fidelity
35.8% ($37,900)

Allocations:
6% Fidelity Freedom Index 2050 Fund Investor Class (FIPFX, 0.12%)
35.8% Fidelity Total Market Index Fund (FSKAX, 0.015%)
18% Fidelity 500 Index Fund (FXAIX, 0.015%)

My Solo 401k at Fidelity
4.9% ($5253)

Allocations:
60% Fidelity Total Market Index Fund (FSKAX, 0.015%)
30% Fidelity Total International Index Fund (FTIHX, 0.06%)
10% Fidelity U.S. Bond Index Fund (FXNAX, 0.025%)

My Company 401k at Vanguard
Contributions maxed at 18% Traditional
27% ($28,750)

Allocations:
46% Vanguard Institutional Index Fund Institutional Shares (VINIX, 0.035%)
29% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
9.7% Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX, 0.025%)
8% Vanguard Mid-Cap Index Fund Institutional Shares (VMCIX, 0.04%)
7% Vanguard Small-Cap Index Fund Institutional Shares (VSCIX, 0.04%)


My Roth IRA at Fidelity
5.6% ($5890) Fidelity Total Market Index Fund (FSKAX, 0.015%)

My Roth IRA at Vanguard
6% ($6587)
Allocation: 50/50 between VTSAX and VTWAX --- thoughts?
Vanguard Total Stock Market Index Fund (VTSAX, 0.15%)
Vanguard Total World Stock Index Fund Admiral Shares (VTWAX, 0.1%)


Old 401k at Fidelity
$414 in BTC Lifepath 2055 - Should I leave this where it is?


New contributions
Additional $5,750 I am planning to put into my Solo-401k.

Questions:
1) I could use some feedback on my SEP-IRA allocations as I don't know what's good for this type of account. I have in my notes that generally, VBTLX or FXNAX (bonds) are to be held in IRAs, VTSAX or FSKAX in Roth IRAs, and VTSAX or FSKAX in taxable.

2) For my situation, is 60% domestic stock / 30% intl stock / 10% bonds still the best way to go for investing?


If I need to format this post differently, please let me know and I will correct it. Thanks in advance.
I commend you for a great portfolio at a young age, continuing to learn, and major kudos for taking care of your mother.
“The more simple we are, the more complete we become.” August Rodin | | “The less I needed, the better I felt.” Charles Bukowski
pkcrafter
Posts: 15080
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Portfolio review / Retirement Asset Allocations

Post by pkcrafter »

vivienw wrote: Wed Oct 13, 2021 7:47 pm Hello Bogleheads,

I have been building my portfolio through research and with the advice of a fee-only advisor.

Are you going to continue with the advisor? What is he charging? He has created a complicated portfolio with lots of duplication and complexity. He's also put bonds in your taxable account, which is not a good idea. Advisors tend to do this kind of stuff to give you give you the impression that they are really adding value and justifying their fee.

I'd love some feedback on whether my allocations could use any improvements, especially with my retirement accounts. A large chunk of my entire portfolio is in my retirement accounts because I work both freelance and for a company; 25% of my freelance income was put into a new Solo-401k this year for tax purposes.

Yes, your portfolio needs consolidation and simplification.

Currently most active are my Solo-401k and company 401k.
I am both self-employed and a W2 employee.

My information:

Emergency funds: 7 months worth of living expenses in HYSA
Debt: 30-year Mortgage, $428k at 2.75%

Tax filing status: Head of household, California
Age 29 / Mother age 67 (dependent)

Tax rate: 24% federal, 9.3% state

Current stock/bond allocation: 90/10 - suggested by my fee-only advisor

90/10 is aggressive, but if you are OK with it, fine.

Total portfolio value: 105,790

Taxable
19% in Vanguard Brokerage (21k)

Allocations:
60% Vanguard Total Stock Market Index Fund (VTSAX, expense ratio 0.15%)
30% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
10% Vanguard Total Bond Market Index Fund (VTBLX, 0.05%) No, taxable bonds should not be in a taxable account.


Retirements

My SEP IRA at Fidelity
35.8% ($37,900)

Allocations:
6% Fidelity Freedom Index 2050 Fund Investor Class (FIPFX, 0.12%)
35.8% Fidelity Total Market Index Fund (FSKAX, 0.015%)
18% Fidelity 500 Index Fund (FXAIX, 0.015%)

You don't need a Freedom fund and individual funds in the same place. Also, you don't need both total market and S&P 500. All accounts are part of one unified portfolio.

My Solo 401k at Fidelity
4.9% ($5253)

Allocations:
60% Fidelity Total Market Index Fund (FSKAX, 0.015%)
30% Fidelity Total International Index Fund (FTIHX, 0.06%)
10% Fidelity U.S. Bond Index Fund (FXNAX, 0.025%)

This is OK, but keep in mind everything is part of one portfolio


My Company 401k at Vanguard
Contributions maxed at 18% Traditional
27% ($28,750)

Allocations:
46% Vanguard Institutional Index Fund Institutional Shares (VINIX, 0.035%)
29% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
9.7% Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX, 0.025%)
8% Vanguard Mid-Cap Index Fund Institutional Shares (VMCIX, 0.04%)
7% Vanguard Small-Cap Index Fund Institutional Shares (VSCIX, 0.04%)

OK,


My Roth IRA at Fidelity
5.6% ($5890) Fidelity Total Market Index Fund (FSKAX, 0.015%)

My Roth IRA at Vanguard
6% ($6587)
Allocation: 50/50 between VTSAX and VTWAX --- thoughts?
Vanguard Total Stock Market Index Fund (VTSAX, 0.15%)
Vanguard Total World Stock Index Fund Admiral Shares (VTWAX, 0.1%)


Old 401k at Fidelity
$414 in BTC Lifepath 2055 - Should I leave this where it is?

There are a couple of these funds, what's the ticker? Is it the indexed fund?



New contributions
Additional $5,750 I am planning to put into my Solo-401k.

Questions:
1) I could use some feedback on my SEP-IRA allocations as I don't know what's good for this type of account. I have in my notes that generally, VBTLX or FXNAX (bonds) are to be held in IRAs, VTSAX or FSKAX in Roth IRAs, and VTSAX or FSKAX in taxable.

Yes, but VTSAX is a little more tax-efficient that FSKAX.

2) For my situation, is 60% domestic stock / 30% intl stock / 10% bonds still the best way to go for investing?

It's OK, but it's very aggressive. If that's what you want and you can hold it when there is panic, OK.

Paul


When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
pingo
Posts: 2632
Joined: Sat Sep 19, 2009 8:24 pm

Re: Portfolio review / Retirement Asset Allocations

Post by pingo »

I assume your Solo 401(k) contributions are profit sharing contributions only. Is that correct?

Also, do you have any interest / ability to use your Solo 401(k) as a vehicle for Mega Backdoor Roth contributions?
pingo
Posts: 2632
Joined: Sat Sep 19, 2009 8:24 pm

Re: Portfolio review / Retirement Asset Allocations

Post by pingo »

Another option might be to see if your Company 401(k) can be used as a vehicle for Mega Backdoor Roth contributions.
Topic Author
vivienw
Posts: 78
Joined: Wed Jan 13, 2021 10:51 pm

Re: Portfolio review / Retirement Asset Allocations

Post by vivienw »

pkcrafter wrote: Thu Oct 14, 2021 3:58 pm
vivienw wrote: Wed Oct 13, 2021 7:47 pm Hello Bogleheads,

I have been building my portfolio through research and with the advice of a fee-only advisor.

Are you going to continue with the advisor? What is he charging? He has created a complicated portfolio with lots of duplication and complexity. He's also put bonds in your taxable account, which is not a good idea. Advisors tend to do this kind of stuff to give you give you the impression that they are really adding value and justifying their fee.

I'd love some feedback on whether my allocations could use any improvements, especially with my retirement accounts. A large chunk of my entire portfolio is in my retirement accounts because I work both freelance and for a company; 25% of my freelance income was put into a new Solo-401k this year for tax purposes.

Yes, your portfolio needs consolidation and simplification.

Currently most active are my Solo-401k and company 401k.
I am both self-employed and a W2 employee.

My information:

Emergency funds: 7 months worth of living expenses in HYSA
Debt: 30-year Mortgage, $428k at 2.75%

Tax filing status: Head of household, California
Age 29 / Mother age 67 (dependent)

Tax rate: 24% federal, 9.3% state

Current stock/bond allocation: 90/10 - suggested by my fee-only advisor

90/10 is aggressive, but if you are OK with it, fine.

Total portfolio value: 105,790

Taxable
19% in Vanguard Brokerage (21k)

Allocations:
60% Vanguard Total Stock Market Index Fund (VTSAX, expense ratio 0.15%)
30% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
10% Vanguard Total Bond Market Index Fund (VTBLX, 0.05%) No, taxable bonds should not be in a taxable account.


Retirements

My SEP IRA at Fidelity
35.8% ($37,900)

Allocations:
6% Fidelity Freedom Index 2050 Fund Investor Class (FIPFX, 0.12%)
35.8% Fidelity Total Market Index Fund (FSKAX, 0.015%)
18% Fidelity 500 Index Fund (FXAIX, 0.015%)

You don't need a Freedom fund and individual funds in the same place. Also, you don't need both total market and S&P 500. All accounts are part of one unified portfolio.

My Solo 401k at Fidelity
4.9% ($5253)

Allocations:
60% Fidelity Total Market Index Fund (FSKAX, 0.015%)
30% Fidelity Total International Index Fund (FTIHX, 0.06%)
10% Fidelity U.S. Bond Index Fund (FXNAX, 0.025%)

This is OK, but keep in mind everything is part of one portfolio


My Company 401k at Vanguard
Contributions maxed at 18% Traditional
27% ($28,750)

Allocations:
46% Vanguard Institutional Index Fund Institutional Shares (VINIX, 0.035%)
29% Vanguard Total International Stock Index Fund (VTIAX, 0.11%)
9.7% Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX, 0.025%)
8% Vanguard Mid-Cap Index Fund Institutional Shares (VMCIX, 0.04%)
7% Vanguard Small-Cap Index Fund Institutional Shares (VSCIX, 0.04%)

OK,


My Roth IRA at Fidelity
5.6% ($5890) Fidelity Total Market Index Fund (FSKAX, 0.015%)

My Roth IRA at Vanguard
6% ($6587)
Allocation: 50/50 between VTSAX and VTWAX --- thoughts?
Vanguard Total Stock Market Index Fund (VTSAX, 0.15%)
Vanguard Total World Stock Index Fund Admiral Shares (VTWAX, 0.1%)


Old 401k at Fidelity
$414 in BTC Lifepath 2055 - Should I leave this where it is?

There are a couple of these funds, what's the ticker? Is it the indexed fund?



New contributions
Additional $5,750 I am planning to put into my Solo-401k.

Questions:
1) I could use some feedback on my SEP-IRA allocations as I don't know what's good for this type of account. I have in my notes that generally, VBTLX or FXNAX (bonds) are to be held in IRAs, VTSAX or FSKAX in Roth IRAs, and VTSAX or FSKAX in taxable.

Yes, but VTSAX is a little more tax-efficient that FSKAX.

2) For my situation, is 60% domestic stock / 30% intl stock / 10% bonds still the best way to go for investing?

It's OK, but it's very aggressive. If that's what you want and you can hold it when there is panic, OK.

Paul


Thanks so much!
Topic Author
vivienw
Posts: 78
Joined: Wed Jan 13, 2021 10:51 pm

Re: Portfolio review / Retirement Asset Allocations

Post by vivienw »

pingo wrote: Thu Oct 14, 2021 4:13 pm I assume your Solo 401(k) contributions are profit sharing contributions only. Is that correct?

Also, do you have any interest / ability to use your Solo 401(k) as a vehicle for Mega Backdoor Roth contributions?
I'm not really sure; I am able to make both employer and employee contributions to my solo-401k. I am a sole proprietorship right now (and will be for the foreseeable future)!
I don't think I make enough to consider the mega backdoor roth but I need to read up more about this. Thanks!
Topic Author
vivienw
Posts: 78
Joined: Wed Jan 13, 2021 10:51 pm

Re: Portfolio review / Retirement Asset Allocations

Post by vivienw »

GetSmarter wrote: Thu Oct 14, 2021 2:46 pm I commend you for a great portfolio at a young age, continuing to learn, and major kudos for taking care of your mother.
Thank you so much ^_^
pingo
Posts: 2632
Joined: Sat Sep 19, 2009 8:24 pm

Re: Portfolio review / Retirement Asset Allocations

Post by pingo »

pingo wrote: Thu Oct 14, 2021 4:13 pmI assume your Solo 401(k) contributions are profit sharing contributions only. Is that correct?

Also, do you have any interest / ability to use your Solo 401(k) as a vehicle for Mega Backdoor Roth contributions?
vivienw wrote: Fri Oct 15, 2021 2:33 pmI'm not really sure; I am able to make both employer and employee contributions to my solo-401k. I am a sole proprietorship right now (and will be for the foreseeable future)!
I don't think I make enough to consider the mega backdoor roth but I need to read up more about this. Thanks!
For clarity: you may make personal contributions (a.k.a., "elective deferrals") to both 401ks, but they may not exceed $19,500 in the aggregate.

The Company and your freelance business are permitted to contribute additional amounts in the form of a match and profit sharing, which do not count toward the $19,500 elective deferral limit, but all contributions to all 401k accounts (whether by the employee or the company) cannot exceed $58,000.
pingo
Posts: 2632
Joined: Sat Sep 19, 2009 8:24 pm

Re: Portfolio review / Retirement Asset Allocations

Post by pingo »

vivienw wrote: Fri Oct 15, 2021 2:33 pmI don't think I make enough to consider the mega backdoor roth but I need to read up more about this.
I don't know if you are phased out (or might phase out) of qualifying for standard Roth IRA contributions, but rolling the SEP and Old 401k into one of your current 401ks would make possible regular-style Backdoor Roth IRA contributions, if necessary.

Also, if / when you do not have enough money to max out your Roth IRA contributions, consider pulling money out of the taxable account to fund Roth IRA contributions.

Also, you should only have one Roth IRA account. Pick which one you prefer and roll the other one into it. (Your contributions must also comply with the IRA contribution limit of $6,000 in the aggregate, regardless of the number of IRA accounts.)
Topic Author
vivienw
Posts: 78
Joined: Wed Jan 13, 2021 10:51 pm

Re: Portfolio review / Retirement Asset Allocations

Post by vivienw »

pingo wrote: Fri Oct 15, 2021 4:03 pm
vivienw wrote: Fri Oct 15, 2021 2:33 pmI don't think I make enough to consider the mega backdoor roth but I need to read up more about this.
I don't know if you are phased out (or might phase out) of qualifying for standard Roth IRA contributions, but rolling the SEP and Old 401k into one of your current 401ks would make possible regular-style Backdoor Roth IRA contributions, if necessary.

Also, if / when you do not have enough money to max out your Roth IRA contributions, consider pulling money out of the taxable account to fund Roth IRA contributions.

Also, you should only have one Roth IRA account. Pick which one you prefer and roll the other one into it. (Your contributions must also comply with the IRA contribution limit of $6,000 in the aggregate, regardless of the number of IRA accounts.)
For clarity: you may make personal contributions (a.k.a., "elective deferrals") to both 401ks, but they may not exceed $19,500 in the aggregate.

The Company and your freelance business are permitted to contribute additional amounts in the form of a match and profit sharing, which do not count toward the $19,500 elective deferral limit, but all contributions to all 401k accounts (whether by the employee or the company) cannot exceed $58,000.
This is very helpful!
I hope I am doing this correctly, but I currently make Employer contributions toward my Solo-401k, since I am already maxing out my company 401k at 19,500. These contributions will not exceed 25% of my 50k freelance income, so it will be below the $58k limit.

I will be consolidating the roth IRAs into one and hold one US equity fund there, as suggested in the previous posts!
Last year I was phased out of qualifying for standard Roth IRA but not this year. I will keep the above in mind though should I be phased out again. Thanks a lot!
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