Simplifying portfolio

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cajungal
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Simplifying portfolio

Post by cajungal » Mon Sep 25, 2017 11:36 am

I fired my financial adviser several months ago and am finally ready to take charge. I want to get to the 5 fund portfolio model. My adviser left me with a complex portfolio. I am invested in 24 funds with 2 taxable accounts, 2 tax deferred accounts in the brokerage account, a 401K from a prior job and a current 401K (not all money from each fund is in a single account) . All but one of these accounts is with Schwab. I am overwhelmed with trying to figure out what money is in which bucket and would like any suggestions as to how to bit by bit figure out where my money is. The second question I have is basically should I leave my money with Schwab or open a Vanguard account and transfer. If I am looking at self directed ETF investing, can I just call up and it doesn't matter who answers the phone? The accounts all together are about $3+ million dollars. And, just to add to the complexity, my husband has TIAA-CREF of about $500K and IRAs of same amount which is in 6 funds.

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CAsage
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Re: Simplifying portfolio

Post by CAsage » Mon Sep 25, 2017 12:37 pm

First, the tax-sheltered old 401k and IRAs can all be merged into one rollover IRA (note: not if you want to do back door IRA, research separately if that is an issue and see if you can instead move old 401k into new 401k). For the taxable accounts, list all of them by name, and see what the current capital gains is for each one. When you sell them, you have to pay taxes on the capital gains (likely) in excess of any capital losses (long bull market makes those less likely). That can be expensive and you might want to spread that out over more than one year.... Think about taxes.
I found Excel to be invaluable. I have a sheet where each fund/asset is one row, with columns for Account Name, Symbol, %fee, Balance, arrange the rows with stock first, then international, then bonds, and subtotal by class (you can do this easily with merged cells, I like to play). Add a column to calculate the total % of each asset type vs portfolio total, and you can get a good picture of where you are.
Note that you can easily (well, eventually) end up with one IRA, one 401k, one taxable account, and several funds in each one.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

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Taylor Larimore
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Re: Simplifying portfolio

Post by Taylor Larimore » Mon Sep 25, 2017 12:56 pm

cajungal wrote:
Mon Sep 25, 2017 11:36 am
I fired my financial adviser several months ago and am finally ready to take charge. I want to get to the 5 fund portfolio model. My adviser left me with a complex portfolio. I am invested in 24 funds with 2 taxable accounts, 2 tax deferred accounts in the brokerage account, a 401K from a prior job and a current 401K (not all money from each fund is in a single account) . All but one of these accounts is with Schwab. I am overwhelmed with trying to figure out what money is in which bucket and would like any suggestions as to how to bit by bit figure out where my money is. The second question I have is basically should I leave my money with Schwab or open a Vanguard account and transfer. If I am looking at self directed ETF investing, can I just call up and it doesn't matter who answers the phone? The accounts all together are about $3+ million dollars. And, just to add to the complexity, my husband has TIAA-CREF of about $500K and IRAs of same amount which is in 6 funds.
CAjungal:

Welcome to the Bogleheads Forum!

In my opinion, because all but one of your accounts is with Schwab, I would probably avail myself of Schwab's very low-cost (0.28%) Intelligent Advisory Service. They will handle the difficult task of selling your mish-mash of funds in the most tax-advantage manner plus their expert advice in setting up a simple, low-cost, 3 or 4-fund portfolio.

I am a strong believer in keeping all investments in one strong company (like Schwab or Vanguard) for simplicity (read my link below).

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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htdrag11
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Re: Simplifying portfolio

Post by htdrag11 » Mon Sep 25, 2017 1:27 pm

+1. The KISS principal prevails!

I had moved my last managed account to Vanguard, so everything I invested is in one bucket. Recently spoke to a Vanguard CFP who advised a 5-fund portfolio. The only reason why I did not go with him is I'm just too cheap, saving 0.3%/year.

However, I told my wife and child that they could always go with the Vanguard PAS once I kicked the bucket. I do managed our child's portfolio, keeping it very simple. However, DW's has been managed by her financial advisor since 2004 and she is OK with it. It's her money.

GL and welcome again.

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celia
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Re: Simplifying portfolio

Post by celia » Mon Sep 25, 2017 1:30 pm

CAsage wrote:
Mon Sep 25, 2017 12:37 pm
First, the tax-sheltered old 401k and IRAs can all be merged into one rollover IRA (note: not if you want to do back door IRA, research separately if that is an issue and see if you can instead move old 401k into new 401k).
Although old 401Ks and traditional IRAs can be merged, I strongly suggest keeping rollovers of employer plans separate from the IRA(s) in which you made a tax-deductible contribution directly into the IRA. If you should also have traditional IRAs with non-deductible contributions, those also should be kept in a third IRA. The reason involves the possibility of doing future rollovers to employer plans so that you can do backdoor Roths easier, should you become ineligible to make Roth contributions.

Most 401Ks will accept the rollovers from previous employer plans, even if they temporarily sat in a Rollover IRA.
Some 401Ks will accept traditional IRA contributions and their growth.
No 401K is allowed to accept non-deductible IRA contributions. They may or may not accept the growth.

So to maintain future flexibility and not have to worry about separating the money later on, put the employer rollovers in Rollover IRAs, which are a form of traditional IRAs. And keep your deductible IRA contributions in another IRA and non-deductible contributions in a third IRA.

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Mon Sep 25, 2017 5:11 pm

cajungal wrote:
Mon Sep 25, 2017 11:36 am
I fired my financial adviser several months ago and am finally ready to take charge. I want to get to the 5 fund portfolio model.
Which 5 funds do you mean?

My adviser left me with a complex portfolio.
Not surprising.

I am invested in 24 funds with 2 taxable accounts, 2 tax deferred accounts in the brokerage account, a 401K from a prior job and a current 401K (not all money from each fund is in a single account) .
Not surprising.

I am overwhelmed with trying to figure out what money is in which bucket and would like any suggestions as to how to bit by bit figure out where my money is.
This is actually pretty easy although it is time consuming and requires attention to detail.

Make a list of every account you have (IRA, 401k, taxable, etc.) and in each account include what you hold in that account. Each stock or each fund will represent a percentage of your total invested assets. Best if you include hubby's accounts as well. So it appears you total invested assets are about $4 million+.


Here's an example based on a portfolio of $1,000 spread over 3 accounts.

Taxable $300. 30% of portfolio
10% World's Greatest Fund .50% (that is the fund's expense ratio) [this would be $100 - 10% of the total portfolio of $1000)
5% Apple Stock
20% Stupid stock I bought thinking I'd make a million

His Roth IRA 10%
10% target fund

Her 401k 60%
10% this fund .5% (again, that is the expense ratio of the fund)
10% that fund .09%
40% the other fund .23%


This will take time and effort and I realize you may have dozens of entries. But once you do it, you will understand your total family portfolio in a way you have never see it before. After that, decisions are pretty easy. Just ask if you don't understand what I've tried to show.

It would be best if you can do the above as part of the format we use for helping people with their portfolio questions. See the link at the bottom of this message for how to do that.

The second question I have is basically should I leave my money with Schwab or open a Vanguard account and transfer.
We have no idea because we do not now what you have. Once YOU understand what you have, this type of question is no longer overwhelming.

If I am looking at self directed ETF investing, can I just call up and it doesn't matter who answers the phone? The accounts all together are about $3+ million dollars.
I don't know the answer to this question but that can be decided later.

fouroheight68
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Re: Simplifying portfolio

Post by fouroheight68 » Mon Sep 25, 2017 6:06 pm

I am going through a similar situation, albeit less funds, but a jungle of accounts. My accounts were held mainly at Edward Jones, and Merrill Lynch. I looked into going to Vanguard, but it was a bit overwhelming and needed some hand holding/guidance. Schwab has a local brick and mortar office, and I met with an advisor there. He was extremely upfront and helpful, and has explained all the processes to my wife and I, and has completed the fund transfers.

He has our accounts in simple 4 fund portfolios, with a low ER (I think .08). He set us up with the intelligent advisor for our joint taxable account which should re-allocate and match our goals. I am beyond happy with Schwab's service. You should look into setting up an appointment with a local Schwab advisor to help you navigate.

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1210sda
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Re: Simplifying portfolio

Post by 1210sda » Mon Sep 25, 2017 6:29 pm

celia wrote:
Mon Sep 25, 2017 1:30 pm

I strongly suggest keeping rollovers of employer plans separate from the IRA(s) in which you made a tax-deductible contribution directly into the IRA. If you should also have traditional IRAs with non-deductible contributions, those also should be kept in a third IRA. The reason involves the possibility of doing future rollovers to employer plans so that you can do backdoor Roths easier, should you become ineligible to make Roth contributions.

Most 401Ks will accept the rollovers from previous employer plans, even if they temporarily sat in a Rollover IRA.
Some 401Ks will accept traditional IRA contributions and their growth.
No 401K is allowed to accept non-deductible IRA contributions. They may or may not accept the growth.

So to maintain future flexibility and not have to worry about separating the money later on, put the employer rollovers in Rollover IRAs, which are a form of traditional IRAs. And keep your deductible IRA contributions in another IRA and non-deductible contributions in a third IRA.
Question: Once you are retired and are definitely not going back to work, is it OK to combine your 401k's and traditional (deductible) IRA's? For the sake of simplicity.

1210

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celia
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Re: Simplifying portfolio

Post by celia » Mon Sep 25, 2017 7:35 pm

1210sda wrote:
Mon Sep 25, 2017 6:29 pm
Question: Once you are retired and are definitely not going back to work, is it OK to combine your 401k's and traditional (deductible) IRA's? For the sake of simplicity.
Yes, but simplicity shouldn't be your top goal. For example, if you are going to do multiple Roth conversions and recharacterizations in the same year, you will likely want to keep each conversion separate until you know which one(s) are the "keepers". Or if each account will have a different beneficiary, keep them separate.

But if you are no longer working and thus unable to contribute to IRAs, the reason you kept them separate (for future 401K rollovers, then backdoor Roths) no longer applies to you.

This is sort of like asking if you should have more than one custodian for your accounts. It depends on your reasons and circumstances.

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Peter Foley
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Re: Simplifying portfolio

Post by Peter Foley » Mon Sep 25, 2017 7:47 pm

Another vote for working with Schwab and their adviser with your taxable and IRA accounts. Schwab has a number of low cost broad based funds (primarily index funds) and ETFs. It would not be difficult to come up with a 5 fund portfolio that is well diversified and low cost.

My choices would be to start with Schwab's Total Stock Market and Total International funds.

You may have good bond fund options in your 401k's. That is worth exploring as well.

schachtw
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Re: Simplifying portfolio

Post by schachtw » Mon Sep 25, 2017 9:07 pm

Can I ask what 5 VG funds the advisor is recommending?

cajungal
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Re: Simplifying portfolio

Post by cajungal » Thu Oct 12, 2017 3:57 pm

Thanks so much for all the replies. I have analyzed my investments and have (about) 54 slices in all these accounts. Some of the funds have large gains and are in taxable accounts so I do not want to liquidate these yet. Are posters willing to look at this much data and make recommendations? Do I need to figure out what percent of my net assets are accounted by each fund so the total adds up to 100% or do I look at each mutual fund/ETF and figure what percent of the total worth each slice contributes? I have found some general observations, like most of the accounts are 60% stocks (almost entirely large cap) and 40% bonds (in 8 diffeent bond funds). Do I need to add the expense ratio for each? I was looking at replies to other portfolio questions - most of my accounts are with Schwab. I think I should know what I want to do before seeing what they say but wonder if going to them might have them doing some of this figuring out where stuff is now.

soccerrules
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Re: Simplifying portfolio

Post by soccerrules » Thu Oct 12, 2017 4:13 pm

cajungal wrote:
Thu Oct 12, 2017 3:57 pm
Thanks so much for all the replies. I have analyzed my investments and have (about) 54 slices in all these accounts. Some of the funds have large gains and are in taxable accounts so I do not want to liquidate these yet. Are posters willing to look at this much data and make recommendations? Do I need to figure out what percent of my net assets are accounted by each fund so the total adds up to 100% or do I look at each mutual fund/ETF and figure what percent of the total worth each slice contributes? I have found some general observations, like most of the accounts are 60% stocks (almost entirely large cap) and 40% bonds (in 8 diffeent bond funds). Do I need to add the expense ratio for each? I was looking at replies to other portfolio questions - most of my accounts are with Schwab. I think I should know what I want to do before seeing what they say but wonder if going to them might have them doing some of this figuring out where stuff is now.
to answer your question. If you want free expert advice from seasoned BHr's (not me)--than YES.

Copy and paste the example from the Portfolio Questions thread and start filling in the info. It will take a little time, but be well worth it. You will get the help and the direction you are asking for. Well worth the time.
Don't let your outflow exceed your income or your upkeep will be your downfall.

David Scubadiver
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Re: Simplifying portfolio

Post by David Scubadiver » Thu Oct 12, 2017 4:19 pm

Go over to personalcapital.com, link your schwab and tiaa-cref accounts and take a look at how it shows your asset allocation; you can review your tax advantaged accounts and your non-tax advantaged accounts separately and make notes of how their asset allocations compare to one another.

That's a start on getting a handle on the big picture. I created a nice spreadsheet based on the asset classes that PC breaks my portfolio into and I plug the numbers in to see what % of my taxable versus non-taxable accounts is invested in what.

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patrick013
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Re: Simplifying portfolio

Post by patrick013 » Thu Oct 12, 2017 4:39 pm

cajungal wrote:
Thu Oct 12, 2017 3:57 pm
Some of the funds have large gains and are in taxable accounts so I do not want to liquidate these yet.
That is always a problem. How much total LTCG is there ? You probably
want a moderate allocation - 50% stocks - or a very conservative allocation
- 25% stocks.

Taking gains over a few years into bonds can limit taxes but now is a good
time to sell some stocks and capture gains into bonds. Bogle's bond allocation
is 50% short term and 50% Intermediate term BTW.

Just a few ideas.
age in bonds, buy-and-hold, 10 year business cycle

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Fri Oct 13, 2017 8:05 am

cajungal wrote:
Thu Oct 12, 2017 3:57 pm
Are posters willing to look at this much data and make recommendations?
If you go to the trouble to post it, you will almost certainly get input. If you don't, bump the thread up to the top and ask again.

Do I need to figure out what percent of my net assets are accounted by each fund so the total adds up to 100% or do I look at each mutual fund/ETF and figure what percent of the total worth each slice contributes?
I'm not sure what this question means as they seem the same to me.

In general, if you want to really understand your portfolio it is helpful to know what percentage of the portfolio each position represents. If you find dozens of little slices that are .4% and .9% and 2%, you will see instantly what is clutter and what is actually contributing something.

Do I need to add the expense ratio for each?
If you want help indeciding what to keep and what to cull, the expense ratio is a critical part of that decision.

cajungal
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Re: Simplifying portfolio

Post by cajungal » Fri Oct 13, 2017 5:26 pm

This was an amazing exercise.
Debt: none
Tax Filing Status: Married Filing Jointly,
Tax Rate: 33% Federal, 4.95% State
State of Residence: IL
Age: 69
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 20% of stocks

Current retirement assets
Her Taxable 1,864,411
.79% cash (for investing – do not include emergency funds) 14,818 0.3
92.42% fund name (ticker symbol) (expense ratio)
DFA Tax Managed US Value DTMMX .37 289,524 6.7
Vang Dividend Growth VDIGX .3 247,158 5.7
Vang Global Min Volatility VMNVX .17 10,245 0.2
Vang Interm Term Tax Bonds VWIUX .09 268,927 6.2
Vang Limited Term Tax Bonds VMLUX .09 66,888 1.6
DFA Short Term Muni Bonds DFSMX .22 245,853 5.7
DFA Large Cap Growth DUSLX .2 208,619 4.9
T Rowe Cap App TRAIX .6 219,995 5.1
Vang Ultra Short Bonds VUSFX .12 165,954 3.9
6.78 % stock company name (ticker symbol).
AAPL 39,141 0.9
BRKB 55,912 1.3
GOOGL 31,373 0.7

Her Roth IRA 112,566 at Schwab
1.89% Cash 2,129 0.05
98.11% fund name (ticker symbol) (expense ratio)
DFA Emerging Markets DFCEX .53 3,918 0.1
DFA US Large Cap Value DFLVX .27 19,170 0.4
Vang Dividend Growth VDIGX .3 18,571 0.4
Vang Global Min Volatility VMNVX .17 5,681 0.1
DFA Large Cap Growth DUSLX .2 9,304 0.2
DFA Vector Equity DFVEX .32 2,188 0.05
Vang Total Bond VBTLX .05 41,468 1.0
DFA Short Real Return Bonds DFAIX .24 10,132 0.2

Joint taxable 174,581
28% cash 48,076 1.1
72%% fund name (ticker symbol) (expense ratio)
DFA Tax Mng Equity US DTMEX .22 76,322 1.7
Vang Ultra Short Bonds VUSFX .12 50,182 1.2


Her Rollover IRA at Schwab
99.08% fund name (ticker symbol) (expense ratio)
DFA Large Cap Value DFLVX .27 155,532 3.6
FIdelty Contra FCNTX .68 4,099 0.1
Vang Dividend Growth VDIGX .3 114,844 2.6
Vang Global Min Volatility VMNVX .17 69,731 1.6
Vang Intermed Bond VBILX .07 102,602 2.4
Vang Total Intl Bond VTABX .12 68,497 1.6
DFA Large Cap Growth DUSLX .2 74,776 1.7
DFA Vector Equity DFVEX .32 34,343 0.8
Vang Short term Bond VBIRX .07 71,993 1.7
DFA Short Duration Real Bond DFAIX .23 101, 404 2.3
Vang Ultra Short Bond VUSFX .12 101, 136 2.3
Cash 8,210 0.2
Her 401K former employer
JPM Large Cap Growth JPMCB .5 47,931 1.1
Schwab Inst Large Cap Value ISLCV .38 45,845 1.1
Stable Value PRM3Z .334 74,334 1.7
Her 401K current (voya)
Blackrock Russell 3000 IWV .28 24,765 0.6
Fidelity Total Bond FEPIX .5 10,276 0.2
Company match and IRS limit maxed

His rollover IRA Schwab
DFA Short Term Real Return DFAIX .23 12,150 0.3
Vang Short Term Bond VBIRX .07 25,185 0.6
Vang Total Bond VBTLX .05 17,146 0.4
Vang Ultra Short Bond VUSFX .12 12,138 0.3
DFA US Large Cap Growth DUSLX .2 5,519 0.1
DFA US Large Cap Value DFLVX .27 25,017 0.6
DFA US Sustainability DFSIX .25 19,336 0.5
DFA US Vector Equity DFVEX .32 3,797 0.1
Vang Global Min Volatility VMNVX .17 11,873 0.2

His TIAA 495,735 11.5
His CREF
CREF Stock R2 .43 210,025 4.9
CREF Equity Index R2 .34 166,580 3.9
CREF Growth R2 .38 135,976 3.1
CREF Global Equities .44 35,495 0.8

Cash 100,000 2.3

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Fri Oct 13, 2017 5:37 pm

cajungal wrote:
Fri Oct 13, 2017 5:26 pm
This was an amazing exercise.
What did you find amazing about it? Be specific. Please list several things that were amazing.

Age: 69
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 20% of stocks
This is an interesting choice. Tell us why this is what you desire.

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sat Oct 14, 2017 8:46 am

I see the quote symbol but am mystified how to get prior comment in quotes.

Quote:What did you find amazing about it? Be specific. Please list several things that were amazing.
I found it amazing to see all investments in one list. I found looking at the concrete numbers of .1% of portfolio (or even .05%) to reinforce but still astound me about how many slices we have in our portfolio. I am amazed at how much more comfortable I am about going forward because I have a working knowledge of where I am.

As for asset allocation, both my husband and I are in good health. I am thinking 20-30 year time frame. Bonds are not yielding much these days. We can certainly survive a hit to the stock market. We have almost no international investments so looking to up them. Does this seem an unusual allocation?

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sat Oct 14, 2017 9:40 am

I found it amazing to see all investments in one list. I found looking at the concrete numbers of .1% of portfolio (or even .05%) to reinforce but still astound me about how many slices we have in our portfolio. I am amazed at how much more comfortable I am about going forward because I have a working knowledge of where I am.
Good. That is what I was hoping to hear. :happy Nothing can replace what you can actually see for yourself.

As for asset allocation, both my husband and I are in good health. I am thinking 20-30 year time frame. Bonds are not yielding much these days. We can certainly survive a hit to the stock market. We have almost no international investments so looking to up them. Does this seem an unusual allocation?
It is unusual in some ways. Typically at your age, we'd suggest something closer to 50% to 60% bonds (or even more) simply because of your age. Bonds give the portfolio some stability in a crash and people who will need all their money may need to think more about preservation than growth.

There are many exceptions to that though. If you feel you have more money than you'll need, you might invest for growth for your later life and for your heirs or charity. If you feel you will not be tempted to sell during a crash and actually be comfortable with 70% stocks during a crash, that could be a good number for you.

You seem to have thought this out and seem to understand through prior experience what will happen when the crash(es) come, so I see no reason to try to convince you to change your choice.

I'm not clear on whether either of you is still working. That's a mighty high tax bracket for people who are retired.

I'm going to look at the portfolio more carefully and may have other comments later. And others might have thoughts as well.

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sat Oct 14, 2017 10:12 am

Going through the list more carefully, I see that you are still working and have a current 401k. Is He still working as well?

I'm confused about this:
  • His TIAA 495,735 11.5
    His CREF
    CREF Stock R2 .43 210,025 4.9
    CREF Equity Index R2 .34 166,580 3.9
    CREF Growth R2 .38 135,976 3.1
    CREF Global Equities .44 35,495 0.8

    Cash 100,000 2.3
Is this one IRA? Two IRAs? Or 401k plan(s)?

Is the $100k cash in a separate account or in His CREF account?



It appears there is some His money, some Her money and some Their money. Are you desiring to keep things separate or throw it all into one asset allocation?

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sat Oct 14, 2017 10:33 am

If I understand the question, His is TIAA/CREF - so one account. The cash is money in bank accounts that we don't need now so we could invest it. Not sure where it is going. I am working full time. He is working periodically - retired professor so can pick up teaching if he wants to. The company I work for is being bought and I should find out in the next couple of weeks what my options are. I will be going on full Social Security in January and may be working part time or may stop working all together, depending on what the offer looks like.
I guess another gee whiz if not amazing thought from doing this exercise is to think, should we combine accounts? The issue is mainly inheritance - my money to my kids, his money to his kids, our money to each other if one predeceases. Now, issues are clean for inheritance, but messier for day to day. Thanks for the thought provoking questions.

michaeljc70
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Re: Simplifying portfolio

Post by michaeljc70 » Sat Oct 14, 2017 10:41 am

Having done this a couple of years ago, the main obstacles are:

-Watching out how much in capital gains are triggered in taxable accounts when selling assets to move to the 5 funds. Depending on your income, you may want to do this in phases.

-Placing the 5 funds strategically in the "right" kind of accounts for tax purposes. There's a lot of information here on that:
https://www.bogleheads.org/wiki/Tax-eff ... _placement

If most of it is at Schwab, I would probably just put everything there.

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sat Oct 14, 2017 12:04 pm

cajungal wrote:
Sat Oct 14, 2017 10:33 am
I guess another gee whiz if not amazing thought from doing this exercise is to think, should we combine accounts? The issue is mainly inheritance - my money to my kids, his money to his kids, our money to each other if one predeceases. Now, issues are clean for inheritance, but messier for day to day. Thanks for the thought provoking questions.
In that case, I would not combine all the accounts into one overall portfolio because one could end up with more stocks and the other with more bonds. When the first one dies, the survivor would have to make adjustments to get back to target. No reason to go through all that. Just set each of you up at 70% stocks and 30% bonds now.

You did say that your current accounts are at about 60/40. Is there a reason for changing to 70/30 now?



So, just looking at Her money (I'm going to leave the joint taxable account including the $100k cash out - it's small enough not to worry about at this point)....This is what I think I have come up with. Total = $3,087,295

Her Taxable $1,864,411

Her Roth IRA $112,566

Her Rollover $907,167

Her Old 401k $168,110

Her Current 401k $35,041

Do I have this right or have I made mistakes?

cajungal
Posts: 12
Joined: Mon Sep 25, 2017 11:09 am

Re: Simplifying portfolio

Post by cajungal » Sat Oct 14, 2017 1:43 pm

Maybe I misentered, I have her rollover as 897,094

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sat Oct 14, 2017 2:06 pm

I had something close to that, but added in the cash position that is right under it. I'll take it out. Probably can't work on this more today though.

Do you know if you have any losses in the taxable account?

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sat Oct 14, 2017 3:15 pm

Less than $2000

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sat Oct 14, 2017 3:34 pm

Woo hoo!

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sat Oct 14, 2017 4:22 pm

retiredjg wrote:
Sat Oct 14, 2017 2:06 pm
I had something close to that, but added in the cash position that is right under it. I'll take it out. Probably can't work on this more today though.

BTW: feel free to add the cash. Also, my husband wants his rollover IRA reinvested

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sun Oct 15, 2017 7:57 am

Just looking at Her assets alone, I get a total of $3,087,295. The percentages below represent the percent of that total.

Her Taxable 1,864,411. 60.4%
0.5% cash 14,818 0.3
9.3% DFA Tax Managed US Value DTMMX .37 289,524
8% Vang Dividend Growth VDIGX .3 247,158
0.3% Vang Global Min Volatility VMNVX .17 10,245
8.7% Vang Interm Term Tax Bonds VWIUX .09 268,927
2.2% Vang Limited Term Tax Bonds VMLUX .09 66,888
8% DFA Short Term Muni Bonds DFSMX .22 245,853
6.8% DFA Large Cap Growth DUSLX .2 208,619
7.1% T Rowe Cap App TRAIX .6 219,995
5.3% Vang Ultra Short Bonds VUSFX .12 165,954
1.3% AAPL 39,141
1.8% BRKB 55,912
1% GOOGL 31,373


Her Roth IRA 112,566 3.6% at Schwab
0.1% Cash 2,129 0.05
0.1% DFA Emerging Markets DFCEX .53 3,918
0.6% DFA US Large Cap Value DFLVX .27 19,170
0.6% Vang Dividend Growth VDIGX .3 18,571
0.2% Vang Global Min Volatility VMNVX .17 5,681
0.3% DFA Large Cap Growth DUSLX .2 9,304
0.1% DFA Vector Equity DFVEX .32 2,188
1.3% Vang Total Bond VBTLX .05 41,468
0.3% DFA Short Real Return Bonds DFAIX .24 10,132


Her Rollover IRA at Schwab 29% $907,167
5% DFA Large Cap Value DFLVX .27 155,532
0.1% FIdelty Contra FCNTX .68 4,099
3.7% Vang Dividend Growth VDIGX .3 114,844
2.3% Vang Global Min Volatility VMNVX .17 69,731
3.3% Vang Intermed Bond VBILX .07 102,602
2.2% Vang Total Intl Bond VTABX .12 68,497
2.4% DFA Large Cap Growth DUSLX .2 74,776
1.1% DFA Vector Equity DFVEX .32 34,343
2.3% Vang Short term Bond VBIRX .07 71,993
3.3% DFA Short Duration Real Bond DFAIX .23 101, 404
3.3% Vang Ultra Short Bond VUSFX .12 101, 136
0.3% Cash 8,210


Her 401K former employer 5.4% $168,110 <---any reason not to roll this into Her Rollover IRA?
1.6% JPM Large Cap Growth JPMCB .5 47,931
1.5% Schwab Inst Large Cap Value ISLCV .38 45,845
Stable Value PRM3Z .334 74,334


Her 401K current (voya) $35,041. 1.1%
0.8% Blackrock Russell 3000 IWV .28 24,765
0.3% Fidelity Total Bond FEPIX .5 10,276

I'm going to post this before something bad happens because there is no way I can go through all that again..... :wink:

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CAsage
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Re: Simplifying portfolio

Post by CAsage » Sun Oct 15, 2017 8:34 am

Awesome to see someone taking control! With separate children, I would not combine taxable accounts, and of course you both will keep your separate IRA-type accounts. You can easily buy/sell assets in your tax-deferred accounts because there aren't any capital gains issues, so once you determine your goals, and because those accounts are smaller, you can probably shift each one to a very small number of funds (1,2). The taxable account ... will need to be sold off carefully to avoid big capital gains hits (if any). You might want to study the Wiki on tax-efficient asset placement to decide where to place bonds vs stocks... I agree that bonds are a good stabilizer at your age (and my age, too).

https://www.bogleheads.org/wiki/Tax-eff ... _placement
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sun Oct 15, 2017 8:48 am

No reason not to roll over prior 401K.

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sun Oct 15, 2017 9:15 am

Cajungal, your overall portfolio is about 45% bonds. This does not include the $100k cash position that you mentioned which I believe may be jointly owned.

I'm still wondering about why you want a portfolio at only 30% bonds after you've been holding something closer to 45% bonds. Is this a deliberate attempt to become more aggressive or were you unsure about what you had before?

I agree with CAsage about how to approach this....immediately get rid of all the clutter in the IRAs and handle the taxable account as you can. Which may mean never.

Here's a way to make some progress pretty quickly.

Her Taxable 1,864,411. 60.4%
0.5% cash 14,818 0.3
9.3% DFA Tax Managed US Value DTMMX .37 289,524
8% Vang Dividend Growth VDIGX .3 247,158
0.3% Vang Global Min Volatility VMNVX .17 10,245
8.7% Vang Interm Term Tax Bonds VWIUX .09 268,927
2.2% Vang Limited Term Tax Bonds VMLUX .09 66,888
8% DFA Short Term Muni Bonds DFSMX .22 245,853
6.8% DFA Large Cap Growth DUSLX .2 208,619
7.1% T Rowe Cap App TRAIX .6 219,995
5.3% Vang Ultra Short Bonds VUSFX .12 165,954
1.3% AAPL 39,141
1.8% BRKB 55,912
1% GOOGL 31,373


Her Roth IRA 112,566 3.6% at Schwab
3.6% SCHE Schwab Emerging Markets ETF


Her Rollover IRA at Schwab 34.4%
18.4% SCHB Schwab Total Market ETF
10% SCHF Schwab International ETF (developed markets only)
6% Vang Total Intl Bond An error. I meant Vang Total Bond Admiral Shares VBTLX


Her 401K current (voya) $35,041. 1.1%
0.8% Blackrock Russell 3000 IWV .28 24,765
0.3% Fidelity Total Bond FEPIX .5 10,276


You can turn off dividend reinvestment in the taxable account and send all the dividends to a money market fund. Then once or twice a year, buy something simple like a Total Stock Index. This will allow all the positions you currently hold in the taxable account to mature into long term gains which, if sold, will be taxed at a much lower rate than short term gains.

If you are a charitable giver, you can donate 0.3% Vang Global Min Volatility VMNVX either directly or though a donor advised fund. This would allow you to get rid of 1 little piece of clutter without paying any tax on the gains. You could get the full value of the donation as a charitable donation.

Is this idea heading in a direction you like?

Also adjusted to 30% bonds.
Last edited by retiredjg on Sun Oct 15, 2017 11:46 am, edited 2 times in total.

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sun Oct 15, 2017 10:30 am

Thanks so much. This really gives me a starting point. I will need to print out and think about next steps. The answer of why I want to change stock/bond ratio so radically is two-fold: 1.My adviser, I suspect, thought that even though I said I wanted 70/30 that she knew better so she weighted the portfolio more heavily in bonds. 2. I did not pay enough attention. My bad. We live a relatively modest live style so market losses would not change what we do. With interest rates for bonds being so low, I am concerned about having a high percentage in bonds.
My next step, I think, is to go to our local Schwab office and see what the adviser there says, given what I know now. As kind of side note, I was thinking of consolidating the bond holdings into one or two funds - is there significant advantage to holding total bond market and so many slices of the bond market at the same time?

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Taylor Larimore
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retiredjg

Post by Taylor Larimore » Sun Oct 15, 2017 11:02 am

cajungal:

It is a rare advisor who will completely analyze your overly-complex portfolio and give you so much sound advice!

retiredjg makes the Bogleheads proud!

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sun Oct 15, 2017 11:12 am

Amen - I am beyond grateful to retiredjg.

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sun Oct 15, 2017 11:39 am

Your question about the bonds is a good one. You have more than enough cash on hand so you really don't "need" all these different short term bonds. I'd consolidate to one or two funds in this account. You should be able to do that with little tax due because the capital gains should be minimal. You could also throw that cash in there if you want.

  • Her Taxable 1,864,411. 60.4%
    0.5% cash 14,818 0.3
    9.3% DFA Tax Managed US Value DTMMX .37 289,524
    8% Vang Dividend Growth VDIGX .3 247,158
    0.3% Vang Global Min Volatility VMNVX .17 10,245
    8.7% Vang Interm Term Tax Bonds VWIUX .09 268,927
    2.2% Vang Limited Term Tax Bonds VMLUX .09 66,888
    8% DFA Short Term Muni Bonds DFSMX .22 245,853

    6.8% DFA Large Cap Growth DUSLX .2 208,619
    7.1% T Rowe Cap App TRAIX .6 219,995
    5.3% Vang Ultra Short Bonds VUSFX .12 165,954
    1.3% AAPL 39,141
    1.8% BRKB 55,912
    1% GOOGL 31,373
I'd put it all into the Vanguard Intermediate Term Tax Exempt Bond or split it with a tax-exempt bond for your state, particularly if you are in a high tax state like CA.

The other possibility (what I think you may have in mind) is to put much of or your entire Rollover IRA into Total Bond Market. This would eliminate several holdings in taxable. This will make the accounts with higher stock percentages gyrate more, but it seems you might be comfortable with that.



Her Rollover IRA at Schwab 34.4%
9.4% SCHB Schwab Total Market ETF
10% SCHF Schwab International ETF (developed markets only)
15% Vang Total Intl Bond VTABX .12 68,497 This is an error - I meant Total Bond Index (not international)

cajungal
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Re: Simplifying portfolio

Post by cajungal » Sun Oct 15, 2017 3:10 pm

Thanks again. I wish I could more eloquently express how grateful I am to retiredjg. What I can (and have done) for now is to use some of the knowledge I have gotten from this forum to pass along in a Facebook group that I am member of. And to keep following other posts. Thanks.

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Re: Simplifying portfolio

Post by abuss368 » Sun Oct 15, 2017 3:22 pm

cajungal wrote:
Sun Oct 15, 2017 10:30 am
As kind of side note, I was thinking of consolidating the bond holdings into one or two funds - is there significant advantage to holding total bond market and so many slices of the bond market at the same time?
Hi cajungal -

Yes, I would strongly recommend consolidating your bond investments. Vanguard Total Bond Index is the largest bond fund in the world for good measure. With this fund an investor has a very low cost and diversified investment that provides both safety and income to an investment portfolio.

In my opinion any good low cost and diversified short or intermediate term bond fund will provide safety and income to an investment portfolio.

Keep investing simple.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

retiredjg
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Re: Simplifying portfolio

Post by retiredjg » Sun Oct 15, 2017 4:02 pm

cajungal wrote:
Sun Oct 15, 2017 3:10 pm
Thanks again. I wish I could more eloquently express how grateful I am... Thanks.
You have been more eloquent than you know. You no longer seem "overwhelmed". In fact you seem a little "empowered". That's what makes this fun. :D

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Peter Foley
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Re: Simplifying portfolio

Post by Peter Foley » Sun Oct 15, 2017 8:38 pm

In addition to the good financial advice you have received from retirejg, you need some estate planning advice. Your assets are at a level where a good attorney could offer advice about beneficiaries, trusts, etc. This is especially important when there is a blended household and there are children from prior marriages.

This does not imply that you should not move forward with the recommended simplification and modification to your AA to achieve your desired level of risk. An attorney may have an easier time dealing with a simplified portfolio. As noted, be cognizant of the tax implications of simplification in your taxable account.

spammagnet
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Re: Simplifying portfolio

Post by spammagnet » Sun Oct 15, 2017 10:36 pm

cajungal wrote:
Sat Oct 14, 2017 8:46 am
I see the quote symbol but am mystified how to get prior comment in quotes.
If you click the quote symbol in the upper right corner of the message you're replying to, it puts the entire message in a quote block. The includes everything that was quoted in it, as sub-quotes.

Breaking it up into separate blocks makes it more readable. You can address individual questions or statements more clearly. You can accomplish that by highlighting a block of text while editing your reply, then clicking the quote character next to the underline button at the top of the edit window.

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