Quick portfolio checkup!

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
jbuenoo
Posts: 16
Joined: Wed Jul 06, 2016 2:49 pm

Quick portfolio checkup!

Post by jbuenoo » Fri Sep 29, 2017 8:41 am

Hey all, just want to do a quick check in and see if I'm on the right track.

Here is my current portfolio in all it's glory:
------
Age: 28
Single
No debt
Federal Tax Bracket: 25%
State Tax: 5.1%

Emergency Fund - Savings Account
1.20% APY
$20,487 -- This could sustain me ~7 months with my current lifestyle.

Short Term Savings - Savings Account
0.75% APY
Contribution: $450 per paycheck, semi-monthly
$2,851

Vanguard Roth IRA - ROR 19.8%
Contribution: $5,500 per year
100% VTIAX
$19,793

Vanguard Brokerage Account
100% VTSAX
$21,976

Roth 401K - 2017 ROR: 8.83%
Contribution: 20% per paycheck, semi-monthly
49% Bond Index (see below for more info)
51% Equity Index (see below for more info)
$32,372.36

Other 401k options:
Aggressive
10-yr Performance: 6.15%
ER: .043%

Small Company
10-yr Performance: 7.74%
ER: 0.008%

International Equity
10-year Performance: 1.06%
1-year Performance: 17.98%
ER: 0.070%

Emerging Markets
10-year Performance: 2.03%
1-year Performance: 27.26%
ER: 0.140%

Bond Index
10-year Performance: 4.41%
1-year Performance: 0.49%
ER: 0.040%

Equity Index
10-year Performance: 7.89%
1-year Performance: 16.05%
ER: 0.011%

--

The only goals I have for my short term savings / emergency fund are:

1) Buy a new, but conservatively priced, car within the next 12 months
2) MAYBE move to a new state, with or without a job
3) A few upcoming planned vacations

The goal for my retirement accounts, so far, is to just retire early.

--

So, how does it look? I feel pretty good about everything so far, except I have been questioning my 401k funds recently. The expense ratio for the funds offered are SO low and I feel like I'm not fully taking advantage of them. The ROR in my 401k is laughable compared to my Vanguard accounts.

Thanks in advance!
Last edited by jbuenoo on Mon Oct 02, 2017 9:19 am, edited 1 time in total.

User avatar
BolderBoy
Posts: 3294
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Quick portfolio checkup!

Post by BolderBoy » Fri Sep 29, 2017 11:21 am

jbuenoo wrote:
Fri Sep 29, 2017 8:41 am
So, how does it look? I feel pretty good about everything so far, except I have been questioning my 401k funds recently. The expense ratio for the funds offered are SO low and I feel like I'm not fully taking advantage of them. The ROR in my 401k is laughable compared to my Vanguard accounts.
How many months of expenses does your emergency fund cover (add to that enough to cover moving to another state without a job)? What is your chosen asset allocation? What are your marginal federal and state tax brackets?

You can add this info to your original post by using the edit button on the upper right of the post.
“Where you stand, depends on where you sit” - Rufus Miles | "Never underestimate one's capacity to overestimate one's abilities"

fouroheight68
Posts: 31
Joined: Wed Aug 02, 2017 1:23 pm

Re: Quick portfolio checkup!

Post by fouroheight68 » Fri Sep 29, 2017 5:35 pm

Why are you 28 years old with 49% bonds? You should be 10-15% bonds, especially if your intention is to retire early. You need all the growth you can now.

Also, why have two separate savings accounts? I understand that you have two different goals, but it just seems an unnecessary (and lower yield) layer. Anything over your 6 months of expenses can go towards your short term goals.

aristotelian
Posts: 2824
Joined: Wed Jan 11, 2017 8:05 pm

Re: Quick portfolio checkup!

Post by aristotelian » Fri Sep 29, 2017 5:42 pm

Get rid of the "short term savings" and combine with your ER. You have one portfolio. Simplify. There is no added value to having two identical accounts.

+1, 50% bonds seems conservative for a young investor with plenty of time to stay invested through a bear market.

jbuenoo
Posts: 16
Joined: Wed Jul 06, 2016 2:49 pm

Re: Quick portfolio checkup!

Post by jbuenoo » Mon Oct 02, 2017 9:09 am

It's not actually 49% bonds, right? It's more like 12%

In my Vanguard account I have 100% of my money invested in stocks, and 50% of my 401k is also invested in stocks.

jbuenoo
Posts: 16
Joined: Wed Jul 06, 2016 2:49 pm

Re: Quick portfolio checkup!

Post by jbuenoo » Wed Oct 04, 2017 9:06 am

Bump :)

mega317
Posts: 911
Joined: Tue Apr 19, 2016 10:55 am

Re: Quick portfolio checkup!

Post by mega317 » Wed Oct 04, 2017 11:36 pm

Of course your returns are better in your Vanguard accounts. They are 100% stock while your 401k has bonds.

You're going to buy a car, take multiple vacations, and move without a job?
Roth 401K - 2017 ROR: 8.83%
Contribution: 20% per paycheck
This is the heart of things. Does 20% of your paycheck get you to early retirement? Don't forget taxes and healthcare when estimating retirement expenses.

Also, traditional 401k is better than Roth 401k for most people. You should examine that decision carefully.

jbuenoo
Posts: 16
Joined: Wed Jul 06, 2016 2:49 pm

Re: Quick portfolio checkup!

Post by jbuenoo » Thu Oct 05, 2017 7:51 am

This is the rules for my contributions to my 401(k):

With the Thrift Plan, you have an opportunity to:
- Save money on a consistent basis through voluntary payroll deductions;
- Elect a contribution rate (either in percent or dollar amounts) to be contributed via
payroll deduction;
- Choose to save on a pre-tax or after-tax basis, or a combination of both;
- Contribute on an after-tax basis to a Roth 401(k) Contribution Account;
- Receive matching contributions – $1 for every $1 of salary you contribute, up to
the maximum described in the “Employer Matching Contributions” section below;
- Receive an automatic non-elective Employer contribution of 1 percent of your
salary per pay period regardless of whether or not you choose to contribute;
- Select from several investment options; and
- Defer taxes on earnings.

So I don' think I can contribute to a traditional 401(k). When I rolled over money into this 401(k) from a previous job, I believe that was in a traditional bucket, but I was able to convert it to Roth.

Also, do you know of a calculator that can help with determining if 20% is a reasonable amount to contribute with the expenses you mentioned considered? Because I'm saving $450 cash per paycheck, I could afford to contribute a bit more to my 401(k).

mega317
Posts: 911
Joined: Tue Apr 19, 2016 10:55 am

Re: Quick portfolio checkup!

Post by mega317 » Thu Oct 05, 2017 12:24 pm

There are a million calculators. Because I'm far out from retirement with a lot of variables and assumptions, I don't care to spend the time to be artificially precise. I use excel.

=fv(rate, nper, pmt, pv)

I use 3% real returns, which may be conservative or not, years until retirement, annual contribution, current balance.
Let's say you want to retire in 25 years, you're adding about $16,000 a year to Roth IRA and 401k?, and you have $74k now in retirement accounts. (I am ignoring EF and short term savings.)

=fv(0.03, 25, -16000, -74000) = $428,408. You might want to plan on something like 3.5% initial withdrawal to be sustainable for a long retirement.

This of course includes a lot of guesses, but will ballpark $15,000 a year cover you in retirement? If not you need to save more and/or work longer.

Post Reply