- Yes. Double job. 114,400 and 96,600 (base pay - no holiday,overtime, etc)
- Accumulate as much wealth as possible.
- I need to know it's 100% safe but willing to see it all plummet -90% as long as I know that it will be higher at the end (65y/o)
- As of now, my risk tolerance is very high so most of my money is in FSTVX. I plan to have a 3 bond portfolio based on my research with 85% Total market, 10% total international, and 5% US bonds. Will rebalance annually as I get closer to retirement or when certain bear markets/corrections occur. (I use FSTVX because it's the 401k my employer has and it's easier to have. But if necessary, I can make a vanguard account as well. I read somewhere that vanguard accounts are more tax efficienct if you have taxable accounts?)
- I am an only child and currently live with my parents. My parents do not mind me living there. I plan to live with my parents for the next 5-6 years or until they kick me out. As far as assets, I will most likely inherit my parents house, remaining retirement accounts, cars, etc.
- I also have a girlfriend who makes similar amount as me. We are both very immaterialistic (Not sure if that's a word?) and simply enjoy the beauty of life (Sitting in the back yard, sipping wine while listening to music and enjoying the view)
- I have an emergency fund for 3 months and will most likely not need any real money for the next 10 years.
- Only my student loan which is around 20k at 4% interest rate. I've already paid off my high interest student loan.
Any other relevant financial information will be useful to give you a proper answer.
Here is my question. My work offers me two separate 403b plans so i can contribute a total of $37,000 tax deferred- has to do with something about being federal (This is not two 403b from two different companies) I'm only using one company as the other company has no matching at all. I will try to utilize the back door IRA next year as I started working around July 2017.
Theoretically, my gross income is around 211,000. After pre tax deductions, taxable income is around 174,000. I only put around 1,000 in our FSA (I think this is like HSA? but you lose it if you don't use it). So my effective taxable income prior to standard deduction is 173,000. I think my effective tax rate is 15.9% and my marginal tax rate is 32.0% ish with the standard deduction of 12,000. leaving me with 140,000 net income.
I budget around 20,000 expenditures every year leaving me with 114,000 to invest in taxable accounts +the 37k from pre taxed accounts + 5.5k back door roth. From what I understand, you want your bonds in the 401k and total market in roth iras/taxable accounts. How would I rebalance if most of my bonds are in 401k? Are we allowed to move it from 401k to taxable accounts or will that action be considered withdrawing from your retirement account and thus would incur a penalty.
Also, if my total market out performs the bonds and international, do I sell those so that I can revert to my 85-10-5 allocation before I infuse with new cash?
- or -
Do I simply keep the accounts the way they are and infuse the account that is underperforming with new cash (In this case bonds and total market). In this case, doesn't that mean that I'm only buying low and not selling high whereas the case above would mean that I am selling high and buying low?
if we use the fidelity 3 fund portfolio, Wouldn't selling some funds to rebalance your accounts trigger a taxable event? If im in it for the long haul ans have a time horizon of 40 years, isn't going 100% fusvx, fstvx, and ftipx better than having bonds?
Am I doing something wrong? I’m not very entrepreneur savvy so I can only do index funds. I plan to buy maybe 1-3 properties to rent out and simply leverage out the loans. Is there anything else I can do?
Sorry for such a long post. I am genuinely lost as far as optimizing the accounts.
Income is around 211k. Pre tax acounts = roughly about 38k. Net take home about 140k. Budget is 20k. Plan to invest 114k in taxable accounts + 37k retirement accounts +5.5k backdoor roth I plan to use 3 fund portfolio. Rebalance annually when there is a large correction. How do I rebalance from taxable to roth? Do you rebalance with new cash or both? Am I doing something wrong
These are your retirement accounts 5,500 Backdoor roth, 37,000 tax deferred programs and Taxable accounts.
Total to invest is around 156k/year there are 26 pay checks in 1 year. You can invest roughly 6k/pay period
is it better to evenly infuse your taxable accounts/roth/tax deferred accounts through out the year or is it better to front load certain accounts first? For example.
Roth account: $211 per pay period
tax deferred: $1,384 per pay period
Taxable accounts: $4,384 per pay period
Roth account: Max first pay period
tax deferred: $500 from first pay check, plus the next 6 pay period
Taxable accounts: The rest of the year.
- keep in mind that, based on my research, roth/taxable accounts will be total market/international, tax deferred will be bonds. But this can change depending on how I actually rebalance.