First my personal details:
- My wife and I are in our late 20s
- We are both maxing out our 401(k) contributions, mine is split 50-50 between a 401(k) and a Roth 401(k)
- For the past year we have been investing $4,500 a month into a taxable Wealthfront account.
- My investment goal is to simply put money away for retirement. I have no intention of withdrawing any of the money before retirement.
- Emergency funds: For both my wife and I
- Debt: Car loan 3-year, (0.024% APR)
- Tax Filing Status: Married filing jointly
- Tax Rate: 22% Federal, 7% State
- State of Residence: CA
- Age: Late 20s
- Desired Asset allocation: 90% stocks / 10% bonds
- Desired International allocation: 40%
11.3% cash (for investing – does not include emergency funds)
15.9% company stock (all vested, but I usually sell these as they become long-term)
15.60% iShares Core MSCI Emerging Markets ETF (IEMG)
18.74% Schwab U.S. Broad Market ETF (SCHB)
3.73% Schwab Dow Jones U.S. Dividend 100 Index (SCHD)
13.78% Schwab International Equity ETF (SCHF)
2.09% Vanguard Energy ETF (VDE)
8.45% Vanguard FTSE Developed Markets ETF (VEA)
1.25% Vanguard Dividend Appreciation (VIG)
5.01% VANGUARD MUN BD FD INC TAX EXEMPT BD (VTEB)
15.89% Vanguard Total Stock Market ETF (VTI)
12.55% Vanguard FTSE Emerging Markets ETF (VWO)
2.91% State Street Energy Select Sector ETF (XLE)
4.28% VANG TARGET RET 2050 (VFIFX) (0.15%)
Employer match: 4%, upto 1% of annual salarycompensation
0.61% VANG TARGET RET 2050 (VFIFX) (0.15%)
Retirement fund: 16.48%
Fixed income: 33.11%
New annual Contributions
$18,500 his 401k (employer match of $1500)
$18,500 her 401k
$54,000 taxable (for retirement)
Funds available in her/her 401(k)
BLKRK EQUITY DIV K (MKDVX) 0.6%
FID CONTRAFUND K6 (FLCNX) 0.45%
VANG 500 INDEX ADM (VFIAX) 0.04%
CRLN E MID CAP GR R6 (HRAUX) 0.69%
VANG MIDCAP IDX ADM (VIMAX) 0.05%
VICTORY S ESTB VAL I (VEVIX) 0.62%
CRLN E SM CAP GR R6 (HSRUX) 0.66%
VANG SM CAP IDX ADM (VSMAX) 0.05%
AF CAP WORLD G&I R6 (RWIGX) 0.45%
OPP DEVELOPING MKT I (ODVIX) 0.88%
VANG TOT INTL STK AD (VTIAX) 0.11%
VAN REAL EST IDX ADM (VGSLX) 0.12%
VANG TARGET RET 2055 (VFFVX) 0.15% <---- This is the fund we've invested in
VANG TARGET RET INC (VTINX) 0.13%
LOOMIS CORE PL BD N (NERNX) 0.39%
TMPL GLOBAL BOND R6 (FBNRX) 0.63%
VANG TOT BD MKT ADM (VBTLX) 0.05%
VANG VMMR-FED MMKT (VMFXX) 0.11%
Here are my questions:
(1) What brokerage account should I use?
- I have read a lot about the disadvantages of Wealthfront (high ER, unsustainable business model, move towards active investment, etc) and so I no longer feel it is the best option for the bulk of my investments.
- While I like reading about finance, I am scared of actively buying and selling ETFs even for the purposes of rebalancing.
- I do like the ability to have a simple web interface and mobile app for tracking how my investments are performing
- From everything I have read Vanguard seems like the safest/simplest option, but is there something else I should be looking at?
- Since I will be moving off Wealthfront I need some advice on what funds to invest in.
- As I mentioned I want to take a totally hands-off approach, I don't even want to have to rebalance if possible.
- Currently, my 401(k) is invested in a Vanguard Target Date fund and I am leaning towards the same for my taxable investment account
- Based on everything I have read, investing the additional $5,500 in a Roth IRA makes sense.
- However, I am confused about the AGI and income limits. The Roth IRA website seems to suggest I cannot make a contribution. I might be misreading this entirely.
(4) Any other advice for a young, newbie investor?
I know some of these points have been covered before, so I appreciate your thoughts and time on this post.