Portfolio Review -early 70's Couple -No Kids

[dettom]

We have been with PAS at Vanguard for the last 6 years. We would like to leave PAS at the end of year 23, and go forward on our own. My wife will need PAS when I leave the planet, but she
is well versed in how this service operates and this will work perfectly for her needs. I would like a critical critique of our present portfolio, good and bad, so I can review your thoughts and suggestions and implement them if needed, so we can move forward advisor less with our 2024 portfolio plan. Thank you for your time and consideration!

Emergency funds; 6 months of expenses in MM.( not included)
Debt; 0%
House equity; $850k
2 cars worth $135k free & clear. Will be selling soon one for $85-
$90k once wife agrees which car to sell.
Tax filing status; Married filing jointly
Tax rate; Fed 12%. State 0%
Me 70 wife 71 no kids
Income; pension/SS $61K, portfolio draw 2.25%,-$36k=$97k

Portfolio value; $1.6 mil

Present Allocation; 55% stocks 45% bonds including 8% Intl. stk/bonds
Total expenses minus PAS 0.7%
Rate of return since performance inception (6 years) 6.6%
Year to Date: 6.1%

Her Revocable Trust

8%-DFEOX- DFA Core Equity 1. $130k
11%- BND-Total Bond ETF. $182k
3%-VXUS- Intl Stk ETF. $53k
5%-VMFXX- MM. $11k
Total: $376k

My Revocable Trust

17%- DFEOX-DFA Core Equity 1. $280k
6%-VXF - Extended Market. $104k
16%-VOO-SP500 ETF. $260k
.2%-VFMXX-MM $200.00
3%-BND ETF Total Bond. $61k
4%-VXUS- INTL STK ETF. $65k

Total. $770k

Her IRA

7%- BND-ETF. $119k

My IRA

12% BND ETF. $198
3%+BNDX- ETF Intl Bond. $53k

Total. .. $370k

Her Roth

3%-:BNDX-ETF -Intl Bond. $50k

My Roth

2%-BNDX-ETF- Intl Bond. $ 34k

Total $84k

Percentage of stocks/bonds 100% (rounded)
Total Portfolio Value; $1.6 mil ( not including emergency funds)

I'm trying to get our portfolio on autopilot as much as possible. Looking for guidance on tax bomb when RMD's hit in 2 years. Trying to maximize our tax efficiency from location, not allocation. Looking for guidance on how to "gift" (?) nieces and nephews why we are both still alive! Again, we greatly appreciate ANY/All input. Thank you!!!

[HomeStretch]

… Total expenses minus PAS 0.7% …

Your portfolio holdings look to have ERs of much less than 0.7%. Did you mean 0.07%?

… Her IRA
7%- BND-ETF. $119k

My IRA
12% BND ETF. $198
3%+BNDX- ETF Intl Bond. $53k

Total. .. $370k …

… Looking for guidance on tax bomb when RMD's hit in 2 years…

I am not seeing a tax bomb. RMDs will be about $13.5k in the first year for a deferred balance of $370k.

It will not help to reduce RMDs a lot, but convert what you can @ 12% in the next couple years before RMDs begin.

[Sandwich]

IRA owners over the age of 70-1/2 can make Qualified Charitable Distributions. (Limit - $ 100,000 per owner per year)

If you are charitably minded, making QCDs in 2023 and / or 2024 can reduce the amount of RMDs you would otherwise be subject to in 2025.

How much do you plan on gifting to nieces and nephews ?

[dettom]

Yes Sir! 0.07% is correct for expense ratio of whole portfolio. I was misinformed about my tax situation regarding my RMD's.Thank you for pointing that out! We will use QCD's. for 2023/2024 as much as the CPA recommends to lower future taxes due in 2025. How much money/ stocks can we gift to niece's & nephews in one year without increasing they're tax liability? Sounds like more computations for CPA! Thank you for your efforts on our behalf!

[delamer]

Your nieces/nephews won’t owe any tax on gifts from you. If you gift them stocks, they assume your cost basis for the shares. So they could owe taxes if they sell the stock for more than the cost basis. But the gift itself doesn’t trigger taxes.

You and your wife can each gift $17,000/year to anyone without having to report the gift to the IRS. Even if you gift more and have to report it, you won’t owe any current taxes on the gift. (The excess counts against your estate exclusion.)

[dettom]

Thank you! Very informative for us. I was thinking closer to.$10k than $17k to gift. They will appreciate your knowledge too!

[chassis]

We have been with PAS at Vanguard for the last 6 years. We would like to leave PAS at the end of year 23, and go forward on our own. My wife will need PAS when I leave the planet, but she
is well versed in how this service operates and this will work perfectly for her needs. I would like a critical critique of our present portfolio, good and bad, so I can review your thoughts and suggestions and implement them if needed, so we can move forward advisor less with our 2024 portfolio plan. Thank you for your time and consideration!

Emergency funds; 6 months of expenses in MM.( not included)
Debt; 0%
House equity; $850k
2 cars worth $135k free & clear. Will be selling soon one for $85-
$90k once wife agrees which car to sell.
Tax filing status; Married filing jointly
Tax rate; Fed 12%. State 0%
Me 70 wife 71 no kids
Income; pension/SS $61K, portfolio draw 2.25%,-$36k=$97k

Portfolio value; $1.6 mil

Present Allocation; 55% stocks 45% bonds including 8% Intl. stk/bonds
Total expenses minus PAS 0.7%
Rate of return since performance inception (6 years) 6.6%
Year to Date: 6.1%

Her Revocable Trust

8%-DFEOX- DFA Core Equity 1. $130k
11%- BND-Total Bond ETF. $182k
3%-VXUS- Intl Stk ETF. $53k
5%-VMFXX- MM. $11k
Total: $376k

My Revocable Trust

17%- DFEOX-DFA Core Equity 1. $280k
6%-VXF - Extended Market. $104k
16%-VOO-SP500 ETF. $260k
.2%-VFMXX-MM $200.00
3%-BND ETF Total Bond. $61k
4%-VXUS- INTL STK ETF. $65k

Total. $770k

Her IRA

7%- BND-ETF. $119k

My IRA

12% BND ETF. $198
3%+BNDX- ETF Intl Bond. $53k

Total. .. $370k

Her Roth

3%-:BNDX-ETF -Intl Bond. $50k

My Roth

2%-BNDX-ETF- Intl Bond. $ 34k

Total $84k

Percentage of stocks/bonds 100% (rounded)
Total Portfolio Value; $1.6 mil ( not including emergency funds)

I'm trying to get our portfolio on autopilot as much as possible. Looking for guidance on tax bomb when RMD's hit in 2 years. Trying to maximize our tax efficiency from location, not allocation. Looking for guidance on how to "gift" (?) nieces and nephews why we are both still alive! Again, we greatly appreciate ANY/All input. Thank you!!!

Consider simplifying. You have too many accounts and buckets for my liking.

[delamer]

We have been with PAS at Vanguard for the last 6 years. We would like to leave PAS at the end of year 23, and go forward on our own. My wife will need PAS when I leave the planet, but she
is well versed in how this service operates and this will work perfectly for her needs. I would like a critical critique of our present portfolio, good and bad, so I can review your thoughts and suggestions and implement them if needed, so we can move forward advisor less with our 2024 portfolio plan. Thank you for your time and consideration!

Emergency funds; 6 months of expenses in MM.( not included)
Debt; 0%
House equity; $850k
2 cars worth $135k free & clear. Will be selling soon one for $85-
$90k once wife agrees which car to sell.
Tax filing status; Married filing jointly
Tax rate; Fed 12%. State 0%
Me 70 wife 71 no kids
Income; pension/SS $61K, portfolio draw 2.25%,-$36k=$97k

Portfolio value; $1.6 mil

Present Allocation; 55% stocks 45% bonds including 8% Intl. stk/bonds
Total expenses minus PAS 0.7%
Rate of return since performance inception (6 years) 6.6%
Year to Date: 6.1%

Her Revocable Trust

8%-DFEOX- DFA Core Equity 1. $130k
11%- BND-Total Bond ETF. $182k
3%-VXUS- Intl Stk ETF. $53k
5%-VMFXX- MM. $11k
Total: $376k

My Revocable Trust

17%- DFEOX-DFA Core Equity 1. $280k
6%-VXF - Extended Market. $104k
16%-VOO-SP500 ETF. $260k
.2%-VFMXX-MM $200.00
3%-BND ETF Total Bond. $61k
4%-VXUS- INTL STK ETF. $65k

Total. $770k

Her IRA

7%- BND-ETF. $119k

My IRA

12% BND ETF. $198
3%+BNDX- ETF Intl Bond. $53k

Total. .. $370k

Her Roth

3%-:BNDX-ETF -Intl Bond. $50k

My Roth

2%-BNDX-ETF- Intl Bond. $ 34k

Total $84k

Percentage of stocks/bonds 100% (rounded)
Total Portfolio Value; $1.6 mil ( not including emergency funds)

I'm trying to get our portfolio on autopilot as much as possible. Looking for guidance on tax bomb when RMD's hit in 2 years. Trying to maximize our tax efficiency from location, not allocation. Looking for guidance on how to "gift" (?) nieces and nephews why we are both still alive! Again, we greatly appreciate ANY/All input. Thank you!!!

Consider simplifying. You have too many accounts and buckets for my liking.

While they could reduce the number of funds within their trusts, their number of accounts and funds is very streamlined.

[tibbitts]

2 cars worth $135k free & clear. Will be selling soon one for $85-
$90k once wife agrees which car to sell.

If the combined value is $135k, how can you sell either one for $85-90k?

[retiredjg]

Her IRA

7%- BND-ETF. $119k

My IRA

12% BND ETF. $198
3%+BNDX- ETF Intl Bond. $53k

Total. .. $370k

With a total of $370k in tax-deferral, I agree that there is no tax bomb to worry about. You are already drawing $36k from the IRA so an RMD of $13kish is less than that so RMDs should be a non-event for you.

Using QCDs to lower future taxes in 2025 does not make sense if I understand your situation correctly.

[dettom]

Thank you for all the input! In response to selling one car soon,
I am 99.9% sure it will be my car which is a 21 Corvette There is a miniscule chance, say 0.01% she will sell her car..that's why I used a value of $85k-$90k. To streamline our Trust accounts, I have been contemplating liquidating INTL Stock ETF into VOO
S&P500 but "something" (?) keeps holding me back! Time will tell.