Help cleaning up 401k

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lmbebo
Posts: 31
Joined: Fri Jul 18, 2014 1:49 pm

Help cleaning up 401k

Post by lmbebo » Fri Oct 06, 2017 2:39 pm

My current allocation is as is.

VOO - Vanguard 500 Index Fund - 38%
VXF - Vanguard Ext MKT ETF - 11%
VNQ - Vanguard REIT ETF - 5.67%
VIOO - Vanguard S and P Small - 27%
VXUS - Vanguard TOTAL INTL STK - 18%

Relatively new 401k. I'm thinking I should be selling the VIOO and putting 7% into VOO and the remaining portion of the sale into a bond ETF to give me a 80/20 mix.

Rest of my assets are in my TSP account - 33% split between C/S/I funds.

Roth IRA - vanguard STAR fund. Will look at doing backdoor Roth iRA soon.

Near 40, 2 young kids, potential divorce on horizon ...

ThriftyPhD
Posts: 119
Joined: Mon Jul 31, 2017 10:43 am

Re: Help cleaning up 401k

Post by ThriftyPhD » Fri Oct 06, 2017 2:51 pm

To treat your complete portfolio, it's good to know rough amounts for the accounts (for example, equal amounts in TSP as in the 401k?). Also, what other options does your 401k have, and what are the expense ratios. How much are you contributing per year.

Please see viewtopic.php?f=1&t=6212

lmbebo
Posts: 31
Joined: Fri Jul 18, 2014 1:49 pm

Re: Help cleaning up 401k

Post by lmbebo » Fri Oct 06, 2017 3:14 pm

TSP Account:

$137,543 -- wifi at work isn't always best. Trying to get break down.

C Fund Common Stock Index 1,175.8032 $35.7366 $42,019.21 30.55%

S Fund Small Cap Stock Index 1,150.5111 $46.9140 $53,975.08 39.24%

I Fund International Stock Index 1,403.8061 $29.5978 $41,549.56 30.21%

401k:

Its a pretty open account, so I'd have a variety of choices. Part of a small physician practice.

VOO - $5609
VXF - $1630
VNQ - $837
VIOO - $3988
VXUS - $2969

I put in $750 into a pretax 401k every pay period, bimonthly. Imagine that the group will be fully maxing the 401k this year or next so total contribution of $54k?

Until I get a better handle on managing my investments, I also have a taxable brokeage account I setup with betterment, about $12k in there, doing auto contributions of $750 a pay period at moment, hope to increase it as I can. A lot depends on how things play out with wife.

Wife with bulk of our assets due to inheritance (probably have old threads complaining about spending, etc). Her assets are managed by a Financial advisor and amounts to bit over a $1 million. Not get into much else, but my savings has been poor for relationship problems - infertility, unhappy wife, job changes, etc.

ThriftyPhD
Posts: 119
Joined: Mon Jul 31, 2017 10:43 am

Re: Help cleaning up 401k

Post by ThriftyPhD » Fri Oct 06, 2017 3:53 pm

Is your desired AA 80/20 then?

If you haven't read already: https://www.bogleheads.org/wiki/Three-fund_portfolio

Also worth reading: https://www.bogleheads.org/wiki/Thrift_Savings_Plan

The expense ratios in your 401k would matter for choosing the exact portfolio. I might start by putting the full 20% bond allocation in TSP, either the G fund or a mix of G and F. The G fund is a pretty well regarded bond fund.

I believe the I fund is considered inferior for an international holding, because it misses some market components. Since your 401k has VXUS, perhaps go with the remainder in TSP in a mix of C and S based on if you want to market weight or tilt (a 4:1 C:S would replicate the Total Stock Market). Then, in your 401k, fill up VXUS until you reach your desired international amount. After that VTI or VTSMX for total stock market.

So, put that all together. You have $152,576 with $137,543 in TSP, $15,033 in 401k.

Code: Select all

TSP:
G 20% $30,515.2
C 56% $85,622.24
S 14% $21,405.56

401k:
VXUS 10% $15,033
That's only about 12.5% of your equities in international. If you want a higher international amount than that, you could convert some C and S into I, or you could just wait since your 401k contributions will be going into VXUS and raising that percentage.

As more goes into the 401k, you would rebalance by eventually buying VTI instead of VXUS to maintain your US:International desired ratio, and selling C and S in a 4:1 ratio for G, to maintain your 20% bond. At some point, 100% of your TSP would be in G, so then you would need to choose a bond fund in the 401k as well.

lmbebo
Posts: 31
Joined: Fri Jul 18, 2014 1:49 pm

Re: Help cleaning up 401k

Post by lmbebo » Fri Oct 06, 2017 4:06 pm

Thank you

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