Newbie Portfolio Review and help moving fwd

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newDDS
Posts: 55
Joined: Sun Jun 25, 2017 6:52 pm

Newbie Portfolio Review and help moving fwd

Post by newDDS » Sat Feb 10, 2018 9:48 am

Hello all I have been lurking the forum for a few months now and finally been able to hunker down and work through my portfolio. Quick background I recently finished dental school May 2016, got married, started first job, etc, etc...So a lot going on and with 8 years of school btwn undergrad and dental school the only money I knew until late was courtesy of Uncle Sam. Nonetheless below is a breakdown of where we are and I would love for any insight/thoughts/suggestions on anything at all. Thanks in advance!

Emergency funds: About 4 months with credit union with 2% interest
Debt: No credit card debt, student loans apx 140k currently refinanced from 7+ to 4.25 and paying aggressively to be done in 5 years, 2 cars 20k @ 1.5%
Tax Filing Status: Married Filing Jointly
Combined PreTax income: 300k
Tax Rate: 2017 33% Fed, 4.75 State 2018 24% Federal, 4.3% State
State of Residence: OH
Age: 27
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 20% of stocks



Current retirement assets apx 70k and with everyones help here finally was able to view all accounts as a whole and rebalanced yesterday.

Taxable 3%
Wife employer offers Employee Stock purchase program @ 10% discount quarterly. We have been conservatively buying limited shares each buying period. Would love more insight on strategy with ESPP

His 401k 20%
TROWE w/3.5% match
PREIX (US 500 INDEX) ER 0.21, 13%
PBDIX (Total US Bond), ER 0.3, 7%

His Roth IRA at Vanguard 17%
VTSAX (TOTAL US), 0.04 17%

Her 401k 30%
Fidelity w/6% match
FXSIX (US 500) 0.03, 15%
FSIVX (TOTAL INT) 0.06, 12%
VBTIX (US TOTAL BOND) 0.04, 3%

HER ROTH at VANGUARD 30%
VTSAX (TOTAL US) 0.04 24%
VGTSX (TOT INTL) 0.18, 6%

STOCK 90 (72 US, 18 INT) BOND 10


Contributions

New annual Contributions
$18500 his 401k 3.5% match
$12500 her 401k 6% match (plan to rework a few things to get to the max, but this is where it stands now)
$5500 his Backdoor Roth IRA
$5500 her Backdoor Roth IRA
$1200 taxable stock program
$6500 HSA


Questions:
1. Is the 90/10 AA suitable for my wife and I as we first begin our careers

2. Any suggestions on student loan strategy? After refinancing minimum payments are about $1500, which I have been adding an additional $500/month. Planning on upping the additional payments from 500 to 1500 to make the monthly total $3000.

3. Would you rebalance any further? Noticing as I write that Her Roth could be rebalanced with her 401k to take advantage of lower ER on International.

4. Thoughts on continuing with the backdoor Roth strategy?

5. We are currently investing our HSA with a similar AA, and leaving only the minimum $1000 not invested. Our deductible isn't too high and if things happen we can afford out of pocket, but is this a worthwhile strategy?

Thanks agin for everything

Compound
Posts: 609
Joined: Mon May 26, 2014 1:32 pm

Re: Newbie Portfolio Review and help moving fwd

Post by Compound » Sat Feb 10, 2018 3:25 pm

Looks like you’re off to a good start!

I will address several of your questions:

1. Your chosen asset allocation is a bit on the aggressive side. Given a long investing horizon, that’s not a bad idea. Just note that there potential downsides. You may (likely will) have to contend with some major market downturns — be mentally prepared. Do you have a written investment policy statement to help you stay the course through thick and thin?

https://www.bogleheads.org/wiki/Investm ... _statement

2. I like the aggressive repayment plan. Get out of debt ASAP.

3. Optimizing asset location to take advantage of lower ERs makes sense. Go for it.

4. Why wouldn’t you continue with this?

Good luck. :beer

TwstdSista
Posts: 986
Joined: Thu Nov 16, 2017 4:03 am

Re: Newbie Portfolio Review and help moving fwd

Post by TwstdSista » Sat Feb 10, 2018 3:32 pm

Re: FSIVX in her 401k. This is an international fund, but it is not a total international fund. Consider holding your international coverage in her Roth using Vanguard Total International Market Index Fund Admiral Shares (VTIAX) ER 0.11% which is a total international fund (and the admiral version of VGTSX).

newDDS
Posts: 55
Joined: Sun Jun 25, 2017 6:52 pm

Re: Newbie Portfolio Review and help moving fwd

Post by newDDS » Sun Feb 11, 2018 5:28 pm

Compound wrote:
Sat Feb 10, 2018 3:25 pm
Looks like you’re off to a good start!

I will address several of your questions:

1. Your chosen asset allocation is a bit on the aggressive side. Given a long investing horizon, that’s not a bad idea. Just note that there potential downsides. You may (likely will) have to contend with some major market downturns — be mentally prepared. Do you have a written investment policy statement to help you stay the course through thick and thin?

https://www.bogleheads.org/wiki/Investm ... _statement

2. I like the aggressive repayment plan. Get out of debt ASAP.

3. Optimizing asset location to take advantage of lower ERs makes sense. Go for it.

4. Why wouldn’t you continue with this?

Good luck. :beer
Thanks so much for your help, I greatly appreciate it. Working on my written policy now! We both realize the 90:10 is a bit aggressive but are comfortable with it at this time, as life progresses we likely will begin to shift.

For the aggressive repayment plan I did forget to add in our mortgage on the house, which as it stands is at the same rate as my student loans. Would attacking one over the other make more sense to you? Where it stands as far as taxes, I get no breaks from student loan interest due to income limits but with the mortgage we do (and will continue to do so under the new tax law).

The backdoor Roth makes sense to me but I have read some posts where people have been saying when at a higher tax bracket it is not always best to pay the taxes now. Obviously no one knows where tax brackets will be in 30 years from now, so my thoughts are to prepare for the worst, but open to other's thought processes.

thanks again for all of your help!

newDDS
Posts: 55
Joined: Sun Jun 25, 2017 6:52 pm

Re: Newbie Portfolio Review and help moving fwd

Post by newDDS » Sun Feb 11, 2018 5:33 pm

TwstdSista wrote:
Sat Feb 10, 2018 3:32 pm
Re: FSIVX in her 401k. This is an international fund, but it is not a total international fund. Consider holding your international coverage in her Roth using Vanguard Total International Market Index Fund Admiral Shares (VTIAX) ER 0.11% which is a total international fund (and the admiral version of VGTSX).
Thank you for looking further into that, Im glad I asked the question. We are should have enough in her Vanguard acct to get into the admiral class with her next contribution which will help with costs and diversification.

Thanks again!

TwstdSista
Posts: 986
Joined: Thu Nov 16, 2017 4:03 am

Re: Newbie Portfolio Review and help moving fwd

Post by TwstdSista » Sun Feb 11, 2018 5:37 pm

Mortgage vs. student loans -- definitely pay the student loans down first.

Backdoor Roth -- you don't qualify for a deduction to a traditional IRA (your income is too high). The alternative is Roth space, and this is a very good alternative. You don't list any traditional-type IRAs, so this is a "no brainer". Plus you can still contribute for 2017 up through tax day this year. The process is to make a non-deductible contribution to a traditional IRA, then immediately convert it to a Roth IRA. See: https://www.bogleheads.org/wiki/Backdoor_Roth_IRA

newDDS
Posts: 55
Joined: Sun Jun 25, 2017 6:52 pm

Re: Newbie Portfolio Review and help moving fwd

Post by newDDS » Sun Feb 11, 2018 8:22 pm

TwstdSista wrote:
Sun Feb 11, 2018 5:37 pm
Mortgage vs. student loans -- definitely pay the student loans down first.

Backdoor Roth -- you don't qualify for a deduction to a traditional IRA (your income is too high). The alternative is Roth space, and this is a very good alternative. You don't list any traditional-type IRAs, so this is a "no brainer". Plus you can still contribute for 2017 up through tax day this year. The process is to make a non-deductible contribution to a traditional IRA, then immediately convert it to a Roth IRA. See: https://www.bogleheads.org/wiki/Backdoor_Roth_IRA

Thanks so much for your help and I am glad it seems I am on the same page as the rest of you all. Thanks to the help of the blog I just completed my 2017 contribution and about to complete my wife's as well

gostars
Posts: 439
Joined: Mon Oct 09, 2017 7:53 pm

Re: Newbie Portfolio Review and help moving fwd

Post by gostars » Sun Feb 11, 2018 9:07 pm

newDDS wrote:
Sun Feb 11, 2018 5:33 pm
TwstdSista wrote:
Sat Feb 10, 2018 3:32 pm
Re: FSIVX in her 401k. This is an international fund, but it is not a total international fund. Consider holding your international coverage in her Roth using Vanguard Total International Market Index Fund Admiral Shares (VTIAX) ER 0.11% which is a total international fund (and the admiral version of VGTSX).
Thank you for looking further into that, Im glad I asked the question. We are should have enough in her Vanguard acct to get into the admiral class with her next contribution which will help with costs and diversification.

Thanks again!
Or check the Fidelity 401k to see if Fidelity's total international index fund (FTIPX or FTIUX) is available. I'd also look for total stock market (FSTVX or FSKTX) instead of FXSIX, and/or adding an extended market fund (VEXAX or FSEVX) to complement the S&P 500 to get to total market (80% S&P 500, 20% extended market).

newDDS
Posts: 55
Joined: Sun Jun 25, 2017 6:52 pm

Re: Newbie Portfolio Review and help moving fwd

Post by newDDS » Tue Feb 13, 2018 4:50 pm

gostars wrote:
Sun Feb 11, 2018 9:07 pm
newDDS wrote:
Sun Feb 11, 2018 5:33 pm
TwstdSista wrote:
Sat Feb 10, 2018 3:32 pm
Re: FSIVX in her 401k. This is an international fund, but it is not a total international fund. Consider holding your international coverage in her Roth using Vanguard Total International Market Index Fund Admiral Shares (VTIAX) ER 0.11% which is a total international fund (and the admiral version of VGTSX).
Thank you for looking further into that, Im glad I asked the question. We are should have enough in her Vanguard acct to get into the admiral class with her next contribution which will help with costs and diversification.

Thanks again!
Or check the Fidelity 401k to see if Fidelity's total international index fund (FTIPX or FTIUX) is available. I'd also look for total stock market (FSTVX or FSKTX) instead of FXSIX, and/or adding an extended market fund (VEXAX or FSEVX) to complement the S&P 500 to get to total market (80% S&P 500, 20% extended market).
Unfortunately the international funds are limited in both of our 401ks. Her account doesn't offer a total market, but doe shave an extended market. I will reallocate some of that account to further diversify our holdings. Thanks again for all of your help!

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