Asset allocation- International and REIT funds Schwab.

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Topic Author
Mikeygaro
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Joined: Tue Jun 25, 2024 10:30 pm

Asset allocation- International and REIT funds Schwab.

Post by Mikeygaro »

Hi all I’m 25 years old and have been investing for 3 years now.

I use Schwab for investing.

In my Roth I carry:
SCHF
(No REIT)

In my taxable I carry:
SWISX and SCHH

Are these going funds to hold for a long term? Are there any others?

Here is my asset allocation of both if anyone has any advice for me on this too!

Roth
Swtsx- 50% Schwab total market index
QQQ- 30% invesco QQQ trust tech index
SCHF- 20% SCHWAB international equity

Taxable Brokerage
Swppx- 50% S&P 500 index
VGT- 30% Vanguard technology index
SWISX-10% schwab international index
SCHH- 10% schwab US REIT ETF
Last edited by Mikeygaro on Tue Jul 09, 2024 2:24 pm, edited 2 times in total.
Topic Author
Mikeygaro
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Joined: Tue Jun 25, 2024 10:30 pm

Re: International and REIT funds Schwab.

Post by Mikeygaro »

My TSP through my company holds some bonds as well.
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typical.investor
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Re: International and REIT funds Schwab.

Post by typical.investor »

Personally, I would hold SCHH (3.33% yield) in the ROTH and SCHF (2.73% yield) in taxable to try and lower my taxes (becomes more of an issue after years of accumulation and growth) and also to claim the FTC on SCHF. Finally, SCHH will be taxed at ordinary rates while about 85% of SCHF dividends are at the lower qualified dividend rate (or not taxed if you are in the lower brackets).
Topic Author
Mikeygaro
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Re: International and REIT funds Schwab.

Post by Mikeygaro »

typical.investor wrote: Tue Jul 09, 2024 1:50 pm Personally, I would hold SCHH (3.33% yield) in the ROTH and SCHF (2.73% yield) in taxable to try and lower my taxes (becomes more of an issue after years of accumulation and growth) and also to claim the FTC on SCHF. Finally, SCHH will be taxed at ordinary rates while about 85% of SCHF dividends are at the lower qualified dividend rate (or not taxed if you are in the lower brackets).
Would you recommend switching out SWISX in my taxable for SCHF?

If you don’t mind what is the FTC?
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typical.investor
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Re: International and REIT funds Schwab.

Post by typical.investor »

Mikeygaro wrote: Tue Jul 09, 2024 1:59 pm
typical.investor wrote: Tue Jul 09, 2024 1:50 pm Personally, I would hold SCHH (3.33% yield) in the ROTH and SCHF (2.73% yield) in taxable to try and lower my taxes (becomes more of an issue after years of accumulation and growth) and also to claim the FTC on SCHF. Finally, SCHH will be taxed at ordinary rates while about 85% of SCHF dividends are at the lower qualified dividend rate (or not taxed if you are in the lower brackets).
Would you recommend switching out SWISX in my taxable for SCHF?

If you don’t mind what is the FTC?
SWISX is very much more tax efficient than SCHH, so I don’t see much benefit or need.

FTC is the foreign tax credit. SCHF will withhold foreign taxes. You can claim them as a credit in taxable but not in tax sheltered.

See https://www.bogleheads.org/wiki/Foreign_tax_credit

Note the tax forms section. If your credit is not more than $300, or $600 if married filing jointly then you don’t need to file form 1116.
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ruralavalon
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Re: International and REIT funds Schwab.

Post by ruralavalon »

More information is necessary.

What is your tax bracket, both federal and state? What is your tax filing status?

What is your desired asset allocation? What percentage of your overall portfolio is in each account?

How much (in dollars) do you currently contribute annually to each account?


Mikeygaro wrote: Tue Jul 09, 2024 1:27 pm Hi all I’m 25 years old and have been investing for 3 years now.

I use Schwab for investing.

In my Roth I carry:
SCHF
(No REIT)

In my taxable I carry:
SWISX and SCHH

Are these going funds to hold for a long term? Are there any others?

Here is my asset allocation of both if anyone has any advice for me on this too!

Roth
Swtsx- 50% Schwab total market index
QQQ- 30% invesco QQQ trust tech index
SCHF- 20% SCHWAB international equity

Taxable Brokerage
Swppx- 50% S&P 500 index
VGT- 30% Vanguard technology index
SWISX-10% schwab international index
SCHH- 10% schwab US REIT ETF

Schwab does not offer a total international stock index fund.

In a taxable account at Schwab, for better tax-efficiency I suggest Exchange Traded Funds (ETFs), like:
Vanguard Total Stock Market ETF (VTI) ER 0.03%; and
Vanguard Total International Stock ETF (VXUS) ER 0.08%.
Both are available commission fee at Schwab. ETFs are inherently more tax-efficient than regular mutual funds.

iShares total market ETFs (ITOT and IXUS) are also available commission fee at Schwab.

Do NOT use any REIT fund in your taxable brokerage account. That's very tax-INefficient.

Wiki article, Tax-efficient fund placement.

In both the taxable brokerage account and your Roth IRA I suggest using only very diversified stock index funds, such as total market index funds.

Mikeygaro wrote: Tue Jul 09, 2024 1:28 pm My TSP through my company holds some bonds as well.
Are you a federal employee using the Thrift Savings (TSP)? Or are you an employee of a company using a plan like a 401k?

In any event what funds do you currently use in your employer-based account? If employed by a company please give fund names, tickers and expense ratios.
Last edited by ruralavalon on Tue Jul 09, 2024 4:03 pm, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
Mikeygaro
Posts: 12
Joined: Tue Jun 25, 2024 10:30 pm

Re: International and REIT funds Schwab.

Post by Mikeygaro »

ruralavalon wrote: Tue Jul 09, 2024 3:55 pm More information is necessary.

What is your tax bracket, both federal and state? What is your tax filing status?

What is your desired asset allocation? What percentage of your overall portfolio is in each account?

How much (in dollars) do you currently contribute to each account?


Mikeygaro wrote: Tue Jul 09, 2024 1:27 pm Hi all I’m 25 years old and have been investing for 3 years now.

I use Schwab for investing.

In my Roth I carry:
SCHF
(No REIT)

In my taxable I carry:
SWISX and SCHH

Are these going funds to hold for a long term? Are there any others?

Here is my asset allocation of both if anyone has any advice for me on this too!

Roth
Swtsx- 50% Schwab total market index
QQQ- 30% invesco QQQ trust tech index
SCHF- 20% SCHWAB international equity

Taxable Brokerage
Swppx- 50% S&P 500 index
VGT- 30% Vanguard technology index
SWISX-10% schwab international index
SCHH- 10% schwab US REIT ETF
Mikeygaro wrote: Tue Jul 09, 2024 1:28 pm My TSP through my company holds some bonds as well.
Schwab does not offer a total international stock index fund.

In a taxable account at Schwab, for better tax-efficiency I suggest Exchange Traded Funds (ETFs), like:
Vanguard Total Stock Market ETF (VTI) ER 0.03%; and
Vanguard Total International Stock ETF (VXUS) ER 0.08%.
Both are available commission fee at Schwab. ETFs are inherently more tax-efficient than regular mutual funds.

iShares total market ETFs (ITOT and IXUS) are also available commission fee at Schwab.

Do NOT use any REIT fund in your taxable brokerage account. That's very tax-Inefficient.

Wiki article, Tax-efficient fund placement.

In both the taxable brokerage account and your Roth IRA I suggest using only very diversified stock index funds, such as total market index funds.
What is your tax bracket, both federal and state? What is your tax filing status?

No state tax, federal 22%. Filing single (will change next year)



What is your desired asset allocation? What percentage of your overall portfolio is in each account?

Roth is 37%, taxable is 28%, TSP IS 19%

How much (in dollars) do you currently contribute to each account?
I max my Roth IRA each year. I try to put 3k a month in my taxable.

I’m active duty military. 60% C funds, 25% I fund and 15% bonds
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ruralavalon
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Location: Illinois

Re: International and REIT funds Schwab.

Post by ruralavalon »

Mikeygaro wrote: Tue Jul 09, 2024 4:01 pm
ruralavalon wrote:What is your tax bracket, both federal and state? What is your tax filing status?
No state tax, federal 22%. Filing single (will change next year)


ruralavalon wrote:What is your desired asset allocation? What percentage of your overall portfolio is in each account?


Roth is 37%, taxable is 28%, TSP IS 19%
ruralavalon wrote:How much (in dollars) do you currently contribute to each account?
I max my Roth IRA each year. I try to put 3k a month in my taxable.

I’m active duty military. 60% C funds, 25% I fund and 15% bonds
Now much do you contribute annually to your TSP account?

The TSP offers excellent very diversified index funds with very low expense ratios. So it's often best to make maximum annual employee contributions to the TSP as a priority ahead of contributions to other accounts.

Wiki article, Prioritizing investments

What is your desired asset allocation? In other words, considering all accounts as a single unified portfolio, what percentage of the overall total do you want in bonds or other fixed income investments?
Last edited by ruralavalon on Tue Jul 09, 2024 4:13 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
Mikeygaro
Posts: 12
Joined: Tue Jun 25, 2024 10:30 pm

Re: International and REIT funds Schwab.

Post by Mikeygaro »

ruralavalon wrote: Tue Jul 09, 2024 4:11 pm
Mikeygaro wrote: Tue Jul 09, 2024 4:01 pm
ruralavalon wrote:What is your tax bracket, both federal and state? What is your tax filing status?
No state tax, federal 22%. Filing single (will change next year)


ruralavalon wrote:What is your desired asset allocation? What percentage of your overall portfolio is in each account?


Roth is 37%, taxable is 28%, TSP IS 19%
ruralavalon wrote:How much (in dollars) do you currently contribute to each account?
I max my Roth IRA each year. I try to put 3k a month in my taxable.

I’m active duty military. 60% C funds, 25% I fund and 15% bonds
Now much do you contribute annually to your TSP account?

The TSP offers excellent very diversified index funds with very low expense ratios. So it's often best to make maximum annual employee contributions to the TSP as a priority ahead of contributions to other accounts.

Wiki article, Prioritizing investments

I currently put 10% so with the match it’s roughly 10k a year
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ruralavalon
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Location: Illinois

Re: International and REIT funds Schwab.

Post by ruralavalon »

Mikeygaro wrote: Tue Jul 09, 2024 4:13 pm
ruralavalon wrote: Tue Jul 09, 2024 4:11 pm
Mikeygaro wrote: Tue Jul 09, 2024 4:01 pm
ruralavalon wrote:What is your tax bracket, both federal and state? What is your tax filing status?
No state tax, federal 22%. Filing single (will change next year)


ruralavalon wrote:What is your desired asset allocation? What percentage of your overall portfolio is in each account?


Roth is 37%, taxable is 28%, TSP IS 19%
ruralavalon wrote:How much (in dollars) do you currently contribute to each account?
I max my Roth IRA each year. I try to put 3k a month in my taxable.

I’m active duty military. 60% C funds, 25% I fund and 15% bonds
Now much do you contribute annually to your TSP account?

The TSP offers excellent very diversified index funds with very low expense ratios. So it's often best to make maximum annual employee contributions to the TSP as a priority ahead of contributions to other accounts.

Wiki article, Prioritizing investments

I currently put 10% so with the match it’s roughly 10k a year
Is your taxable account intended for long-term investing, such as for retirement?

If so then I suggest making maximum annual employee contributions to the TSP ($23k) instead of so much to the taxable account.

What is your desired asset allocation? In other words, considering all accounts as a single unified portfolio, what percentage of the overall total do you want in bonds or other fixed income investments?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
Mikeygaro
Posts: 12
Joined: Tue Jun 25, 2024 10:30 pm

Re: International and REIT funds Schwab.

Post by Mikeygaro »

ruralavalon wrote: Tue Jul 09, 2024 4:17 pm
Mikeygaro wrote: Tue Jul 09, 2024 4:13 pm
ruralavalon wrote: Tue Jul 09, 2024 4:11 pm
Mikeygaro wrote: Tue Jul 09, 2024 4:01 pm
ruralavalon wrote:What is your tax bracket, both federal and state? What is your tax filing status?
No state tax, federal 22%. Filing single (will change next year)


ruralavalon wrote:What is your desired asset allocation? What percentage of your overall portfolio is in each account?


Roth is 37%, taxable is 28%, TSP IS 19%
ruralavalon wrote:How much (in dollars) do you currently contribute to each account?
I max my Roth IRA each year. I try to put 3k a month in my taxable.

I’m active duty military. 60% C funds, 25% I fund and 15% bonds
Now much do you contribute annually to your TSP account?

The TSP offers excellent very diversified index funds with very low expense ratios. So it's often best to make maximum annual employee contributions to the TSP as a priority ahead of contributions to other accounts.

Wiki article, Prioritizing investments

I currently put 10% so with the match it’s roughly 10k a year
Is your taxable account intended for long-term investing, such as for retirement?

If so then I suggest making maximum annual employee contributions to the TSP ($23k) instead of so much to the taxable account.

What is your desired asset allocation? In other words, considering all accounts as a single unified portfolio, what percentage of the overall total do you want in bonds or other fixed income investments?
Yes it is but, my goal there is to use it well before 59.5. I’d like to use that from ~50 to 60 then be able to use my retirement accounts to get me the rest of the way there.

Now, I feel like minimal bonds is the way to go at 25 years old. So I’m looking at like 95% stocks. And I’d like to be around 10% bonds when I’m 30.
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