Portfolio Review for 33 year old

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Topic Author
acejacksingh
Posts: 346
Joined: Thu Dec 04, 2014 11:15 am

Portfolio Review for 33 year old

Post by acejacksingh »

Hi BHs -

Looking to get an annual review of my portfolio and have a couple questions below. Thanks as always!

Age: 33
Salary: $141,000 + 5-10% bonus annually
Marital Status: Single
Fed Tax: 24%
CA State Tax: 9.5%

Saving/Primary EF: $54,000 (also saving for home)
Debt: None, pay CC in full, no loans
Retirement Allocation: 90/10
NW: ~$515,000

I-Bonds:
$20,000 (just purchased on 12/30/21 and 1/3/22)

Investments:
Roth IRA:
$109,000 VTTSX, Vanguard Target Date 2060 Fund (ER: 0.15%)

Old Trad 401k:
$127,000, Vanguard Target Retirement 2055 Trust Select (ER: 0.05%)

Old Roth 401k:
$15,000, Vanguard Target Retirement 2055 Trust Select (ER: 0.05%)

Current Trad 401k:
$85,000, Vanguard Target Retirement 2060 Trust Select (ER: 0.05%)

Taxable (future downpayment, secondary emergency fund):
$18,000, VWAHX, Vanguard High-Yield Tax-Exempt Fund (ER: 0.19%)
$6,000, VGT, Vanguard Technology ETF (ER: 0.10%)

Payflex HSA:
$1,000 Cash
$44,000, VFIAX, Vanguard 500 Index Fund Admiral Shares (ER: 0.04%)

Individual Stocks:
$28,000 in various individual companies (blue chips)

Questions:
1) As I continue to save cash for a home in the future, what are some other places to put the money? I recently learned about i-bonds and contributed max for 2021 and 2022 for the higher yield. My savings account is only getting about 0.50% which seems like the highest out there. Should I consider using my secondary emergency fund (VWAHX)?

2) 401k contributions. Currently contributing (and maxing) 20% pretax. I'm curious if anyone thinks I should change this to include Roth since I won't be able to contribute to Roth IRA anymore. Maybe 10% each pretax and Roth? Other suggestions?

3) Overall I'm about to turn 33 and wanted a spot check of how I'm doing? Other ways to improve?

4) How long does it take for I-Bonds earning interest to update on Treasury Direct's website?

Thanks again as always to this group! :sharebeer
Ace
Last edited by acejacksingh on Thu Jan 13, 2022 6:53 pm, edited 1 time in total.
jean.valjean
Posts: 4
Joined: Sat Jan 01, 2022 9:53 am

Re: Portfolio Review for 33 year old

Post by jean.valjean »

1. No great options out there unfortunately if you need the money in the next few years… I’d stick with I bonds and a savings account unless you could risk pushing out a home purchase in a downside scenario.
2. I’d probably keep your 401k pretax given your tax bracket. Have you looked into a back door Roth IRA? You could contribute to this no matter what your income is (unless legislation were to change that).
3. Seems like you’re generally doing a good job - good amount of savings for your age. If I were you, I would simplify/consolidate some of your investments. Why the individual stocks and why the technology ETF? Seems like you could just throw everything into a target date fund or go with the traditional three fund portfolio. Could you roll your old 401k into your current plan to simplify things?
JBTX
Posts: 8924
Joined: Wed Jul 26, 2017 12:46 pm

Re: Portfolio Review for 33 year old

Post by JBTX »

acejacksingh wrote: Fri Jan 07, 2022 5:31 pm Hi BHs -

Looking to get an annual review of my portfolio and have a couple questions below. Thanks as always!

Age: 33
Salary: $141,000 + 5-10% bonus annually
Marital Status: Single
Fed Tax: 24%
CA State Tax: 9.5%

Saving/Primary EF: $54,000 (also saving for home)
Debt: None, pay CC in full, no loans
Retirement Allocation: 90/10
NW: ~$515,000

I-Bonds:
$20,000 (just purchased on 12/30/21 and 1/3/22)

Investments:
Roth IRA:
$109,000 VTTSX, Vanguard Target Date 2060 Fund (ER: 0.15%)

Old Trad 401k:
$127,000, Vanguard Target Retirement 2055 Trust Select (ER: 0.05%)

Old Roth 401k:
$15,000, Vanguard Target Retirement 2055 Trust Select (ER: 0.05%)

Current Trad 401k:
$85,000, Vanguard Target Retirement 2060 Trust Select (ER: 0.05%)

Taxable (future downpayment, secondary emergency fund):
$18,000, VWAHX, Vanguard High-Yield Tax-Exempt Fund (ER: 0.19%)
$6,000, VGT, Vanguard Technology ETF (ER: 0.10%)

Payflex HSA:
$1,000 Cash
$44,000, VFIAX, Vanguard 500 Index Fund Admiral Shares (ER: 0.04%)

Individual Stocks:
$28,000 in various individual companies (blue chips)

Questions:
1) As I continue to save cash for a home in the future, what are some other places to put the money? I recently learned about i-bonds and contributed max for 2021 and 2022 for the higher yield. My savings account is only getting about 0.50% which seems like the highest out there. Should I consider using my secondary emergency fund (VWAHX)?

Not a ton of other great choices. You could purchase more ibonds by:
- overpaying federal taxes, and getting your first $5000 back as paper ibonds. You could still do this for 2021 taxes
- you can also buy ibonds through entity accounts, such as through a revocable living trust or a business/sole proprietorship. If you already have one of those, it is easy to do. If you don't I'm not sure it is worth it to jump through hoops to set them up just for ibond purchase.

- for a more active approach you can pursue new bank account bonuses or high yield bank accounts that require you to jump through some hoops

https://www.doctorofcredit.com/best-ban ... nuses/amp/

https://www.doctorofcredit.com/high-int ... o-get/amp/
2) 401k contributions. Currently contributing (and maxing) 20% pretax. I'm curious if anyone thinks I should change this to include Roth since I won't be able to contribute to Roth IRA anymore. Maybe 10% each pretax and Roth? Other suggestions?
It's a hotly debated topic and depends on a lot of assumptions based upon where you will be in the future and what your future retirement tax rates would be. Most are going to tell you, and I'd tend to agree, at 24%+9% state =31% that is a pretty big deduction to pass up, thus stick with traditional.
3) Overall I'm about to turn 33 and wanted a spot check of how I'm doing? Other ways to improve?

Thanks again as always to this group! :sharebeer
Ace
Overall seems like you are doing all the right things, so good job. Personally I wouldn't fool with individual stocks, but it isn't a huge amount and if it is more of a hobby that is fine, as long as you understand the risks.
Topic Author
acejacksingh
Posts: 346
Joined: Thu Dec 04, 2014 11:15 am

Re: Portfolio Review for 33 year old

Post by acejacksingh »

jean.valjean wrote: Fri Jan 07, 2022 10:31 pm 1. No great options out there unfortunately if you need the money in the next few years… I’d stick with I bonds and a savings account unless you could risk pushing out a home purchase in a downside scenario.
2. I’d probably keep your 401k pretax given your tax bracket. Have you looked into a back door Roth IRA? You could contribute to this no matter what your income is (unless legislation were to change that).
3. Seems like you’re generally doing a good job - good amount of savings for your age. If I were you, I would simplify/consolidate some of your investments. Why the individual stocks and why the technology ETF? Seems like you could just throw everything into a target date fund or go with the traditional three fund portfolio. Could you roll your old 401k into your current plan to simplify things?

2) That's what I'm leaning towards, just need some validation. The backdoor Roth IRA is certainly something I've looked into and will pursue for 2021 IRA contribution before April this year. My question was more around should I just take the easy way out and add Roth assets via 401k.

3) The stock investments were more or less a gift from my dad and slowly reducing this every year.
VGT was just a "fun" investment this past year. I wanted to go crypto but wasn't sure at the time so went with tech instead. Most likely will sell this soon to fund my 2021 IRA contribution.
All the "old 401k" are all with vanguard along with my other accounts so no real difference to rollover. Plus those accounts have a better expense ratio :)
Topic Author
acejacksingh
Posts: 346
Joined: Thu Dec 04, 2014 11:15 am

Re: Portfolio Review for 33 year old

Post by acejacksingh »

Additional Question Added.
Markr867
Posts: 73
Joined: Sat Mar 29, 2014 6:12 am

Re: Portfolio Review for 33 year old

Post by Markr867 »

acejacksingh wrote: Thu Jan 13, 2022 6:51 pm Additional Question Added.
There is a three month lag in interest starting to post to account for the 3 month interest "penalty" if you withdraw before 5 years. You'll see interest start posting at the end of the fourth month.
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