Professional couple. He's 35. She's 30. No kids yet.
Tax rate: He today=28%. She today=25%. Joint (both employed) 28%. Joint (his salary during kiddie era) 25%.
*Have emergency fund and down payment fund established. No CC debt.
*Have about $50k in private variable student loan, now at 8.25%
*Currently renting at a very favorable rate.
*Frugal style of life, paid cars, budgeting already, etc..
*His current portfolio is a mess, ready to reboot the whole thing.
*We plan on liquidating the taxable account and putting most of it against the loans. There are no net capital gains in that account.
*Holding lots of cash in retirement accounts -mainly out of paralysis.
Investement Objective
Aggressive growth with aim toward retirement at/near 60
Flexibility for her to work part time during child years.
Buying a house soon.
Maxing out 401(k) and Roth opportunities.
Saving in addition to retirement, but could probably put that into the loans.
Risk Tolerance
High. Looking at 20-25% Bond allocation. Our inclination is to eke out a higher return with a bit of risk (which is easily less riskthan we've had).
Current Setup (which we're ready to re-furbish )
His E*Trade Brokerage
Junk Stock/Funds 21%
Her ESPP Brokerage
Employer Stock 4%
His Ameriprise SEP-IRA
Cash 2%
GGOCX 8%
MEICX 5%
SADAX 5%
SPY 5%
SSTHX 5%
His E*Trade SEP-IRA
BRK.B 3%
Cash 10%
MSFT 2%
His E*Trade Roth
Cash 2%
His Current 401(k)
Cash 6%
Her Old 401(k)
VTTVX 5%
Her Current 401(k)
DODBX 14%
Her Roth IRA
Cash 3%
Our Current Thinking:
Cash out most of the brokerage account, keeping about 7% max
Applying that money toward loan/down-payment
Aiming for a setup of
- *Total Market 40%
*Small Value 5%
*International 25%
*Bond 25%
*REIT 5%
I can roll my IRAs to Vanguard, and our 401(k)s have the Fidelity Brokeragelink option, which, I understand, allow us to invest in the universe of funds.
Trying to spread that across our various accounts gives us this
Proposed portfolio:
Taxable
Her Company Stock - 1%
Total Stock Market - VTSMX 6%
Her Current 401(k)
Total Stock Market - VTSMX 5%
TIPS - VIPSX 12%
Her Old 401(k)
Int Bond - VFITX 7%
Her Roth
REIT - VGSIX 4%
His 401(k)
Int Bond - VFITX 6%
Total Stock Market - VTSMX 1%
His Roth
REIT - VGSIX 1%
Small Value - VISVX 2%
His SEP-IRA (into one account)
Small Value - VISVX 3%
Int'l Blend - VGTSX 25%
Total Stock Market - VTSMX 27%
Questions:
In general, how does this look? Is there a way to tweak it toward higher expected gain?
I don't like that we have amount assigned in such small percentages. Many of those will be below $10k. So, I could probably safely add to the 2007 Roth to put all the REIT in one acct. Good idea?
She is concerned (non-specifically) about the market risk posed by China. Is there an agreed upon hedge against some post-American economy?
Thanks a ton. Let me know if I need to explain / provide more.