Please critique my portfolio

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KStef
Posts: 8
Joined: Fri Sep 01, 2017 6:34 am

Please critique my portfolio

Post by KStef » Wed Oct 04, 2017 3:44 pm

Hello. I had posted few weeks back requesting some help with structuring my portfolio and received very useful feedback that I’ve implemented. My company, however, is changing our benefits package starting 2018, and I would like some advice regarding my new selections.

Emergency funds: about 3 months of expenses available
Debt: None
Tax Filing Status: Single
Tax Rate: 39.6% Federal, 3.07% State
Income: 400K
State of Residence: PA
Age: 30
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 30% of stocks
Detailed Desired Asset Allocation: 56% US stocks/ 24% International stock/ 20% bonds

Estimated size of current total portfolio at end of 2017: 77,400

Current (2017) retirement assets:
403b -- $18K – 24%
24% (FUSVX) Fidelity 500 Index Fund Premium Class (0.04%)

457b -- $18K – 24%
20% (PDBZX) Prudential Total Return Bond Z (0.55)
4% (FUSVX) Fidelity 500 Index Fund Premium Class (0.04%)

Roth IRA at Vanguard (after rolling over SEP IRA)-- $38K – 52%
28% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.04%)
24% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)

HSA -- $3400
(pending investment)

Contributions

New annual Contributions for 2018
$18000 403b (employer matching contributions + pension plan = 14850)
$0 457b (no longer offered by employer so unable to contribute to)
$5500 (backdoor) Roth IRA
$3400 HSA
$50700 taxable


Expected total account balances for 2018
$50850 403b
$18000 457b
$43500 (backdoor) Roth IRA
$6800 HSA
$50700 taxable

Funds available in 403b with ERs
Vanguard Short Term US Treasury (VFISX) 0.20
Vanguard Total Bond Market Index (VBMFX) 0.15
Metropolitan West Total Return Bond Fund (MWTRX) 0.67
Vanguard Wellington Fund (VWELX) 0.25
Vanguard Institutional Index (VINIX) 0.04
Vanguard Windsor II Fund (VWNFX) 0.33
Vanguard Extended Market Index Fund (VEXMX) 0.21
Vanguard Total Intl Stock Index Fund (VGTSX) 0.18

Proposed Fund Allocation in 2018
403b -- $50850 – 30%
21% (VINIX) Vanguard Institutional Index (0.04%)
9% ( ) ? Vanguard Bond

457b -- $18000 – 10.6% (no longer able to contribute to)
10.6% (PDBZX) Prudential Total Return Bond Z (0.55)

Roth IRA at Vanguard -- $43500 – 25.6%
15.6% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.04%)
10% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)

HSA -- $6800 – 4%
4% (VFINX) Vanguard 500 Index Fund (0.04%)

Taxable -- $50400 – 29.8%
15.8% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.04%)
14% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)


Questions:
1. Which is the better Vanguard Stock Index fund? Extended market or Institutional?
2. Which Vanguard bonds should I use in my 403b? Is there any benefit of putting bonds in a taxable account instead, to allow for a possibly better selection?
3. What do I do with my 457b? Just let it be?
4. I worry about placing solely the VTIAX (international Stock) in my Roth IRA since it seems to be more volatile than the VTSAX (Total stock). Is there any sense in my doing this?

Thanks in advance

livesoft
Posts: 56385
Joined: Thu Mar 01, 2007 8:00 pm

Re: Please critique my portfolio

Post by livesoft » Wed Oct 04, 2017 4:00 pm

KStef wrote:
Wed Oct 04, 2017 3:44 pm
Questions:
1. Which is the better Vanguard Stock Index fund? Extended market or Institutional?
None of them are "better." See https://www.bogleheads.org/wiki/Approxi ... ock_market I think you will want to have some of both of them.

2. Which Vanguard bonds should I use in my 403b? Is there any benefit of putting bonds in a taxable account instead, to allow for a possibly better selection?
Vanguard total bond is fine. You might experiment with a tax-exempt muni PA bond fund in taxable, but that is not necessary if all your bond allocation can fit in your 403(b).

3. What do I do with my 457b? Just let it be?
I'd probably go with the lowest expense ratio fund there which is probably the S&P500 index fund.


4. I worry about placing solely the VTIAX (international Stock) in my Roth IRA since it seems to be more volatile than the VTSAX (Total stock). Is there any sense in my doing this?
I don't have a problem with Roths having only International stock fund. You will have some international elsewhere, too, for rebalancing.
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retiredjg
Posts: 30374
Joined: Thu Jan 10, 2008 12:56 pm

Re: Please critique my portfolio

Post by retiredjg » Wed Oct 04, 2017 4:03 pm

1. Which is the better Vanguard Stock Index fund? Extended market or Institutional?
This is not a question of which is better. The two together at about 80% 500 index (institutional) and 20% extended market give you total stock market. Definitely use the institutional index. Add extended market if you want.

2. Which Vanguard bonds should I use in my 403b? Is there any benefit of putting bonds in a taxable account instead, to allow for a possibly better selection?
The Total Bond market in your 403b is perfect.

3. What do I do with my 457b? Just let it be?
For now, just let it be unless there are cheaper funds to be had in that account and you can adjust your asset allocation in the other accounts.

4. I worry about placing solely the VTIAX (international Stock) in my Roth IRA since it seems to be more volatile than the VTSAX (Total stock). Is there any sense in my doing this?
It's fine. There is no sense in worrying about that.

KStef
Posts: 8
Joined: Fri Sep 01, 2017 6:34 am

Re: Please critique my portfolio

Post by KStef » Wed Oct 04, 2017 11:40 pm

Thanks to you both! I'll probably select the lower cost Fidelity 500 Index for the 457b as you suggested, and put more of the cheaper Vanguard Total Bond Market in the 403b. Many thanks again.

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