Seeking advice/improvements

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bwmQBAem20LvyMYbw
Posts: 6
Joined: Tue Jul 04, 2017 6:32 pm

Seeking advice/improvements

Post by bwmQBAem20LvyMYbw » Thu Sep 13, 2018 7:24 pm

Hello Bogleheads. It is the time of year again for me to look for some peer reviewed advice and possibly improve my setup. Any help is appreciated! I have always been pretty conservative but am beginning to wonder if I am TOO conservative.... Could be this prolonged bull market talking though! :-) Thanks for taking the time to read everything over.

Specific actions that I am contemplating are:
  • Changing our Target Date funds from 2035 to 2045 or maybe even move it to a 3 or 4 fund portfolio.
  • Consolidating my wife's inheritance from Target Income and Wellesley to Balanced Index.
  • Re-starting contributions to the 529 plans to help pay for private school
  • Increasing joint taxable contributions from $750 to $1,000 bi-weekly

Spending/Emergency funds:
  • $29,245 - Fidelity Brokerage Account. Paychecks deposited here and all bills paid out of this account

Debt:
  • Primary Residence: $6,396 @ 3.375% (Home valued at ~$125,000)
  • Rental Property 1: $68,624 @ 3.00% (Home valued at ~$165,000)
  • Rental Property 2: $18,363 @ 3.125% (Home valued at ~$95,000)
  • Scag ZT Lawnmower: $6,026 @ 0% (My old PUSH lawn mower broke this year. Getting older and ready for a riding one!)
  • I have no other debt and all credit cards are paid in full monthly.

Age:
  • Me - 40
  • Wife - 46

Tax Information:
  • Tax Filing Status: Married Filing Jointly
  • Tax Rate: 22% Federal, 6% State
  • State of Residence: Georgia, USA

Income:
  • Me: Net - $2,077 every/other week
  • Wife: Net - $3,189 net monthly
  • Rental Property 1: $995 gross monthly
  • Rental Property 2: $650 gross monthly

My Assets:
  • Work Fidelity 401k - $154,127 - All in BlackRock LifePath Index 2035 A (LIJAX)
  • Roth Vanguard IRA - $104,668 - All in Vanguard Target Retirement 2035 Fund Investor Shares - VTTHX
  • Trdtl Vanguard IRA - $69,865 - All in Vanguard Target Retirement 2035 Fund Investor Shares - VTTHX
  • Path2College 529 Accounts: $52,293 value. Spread among 3 kids. All invested in appropriate age based target mutual funds. No current active contributions.

My Active contributions:
  • $18,500 to 401k yearly
  • $5,500 to Roth IRA yearly

Wife's Assets:
  • Taxable Vanguard - $41,081 - Inheritance. Conservatively invested in half/half Vanguard Target Retirement Income Fund Investor Shares (VTINX) and Vanguard Wellesley Income Fund Investor Shares (VWINX)
  • Roth Vanguard IRA - $40,226 - All in Vanguard Target Retirement 2035 Fund Investor Shares - VTTHX
  • Trdtl Vanguard IRA - $29,844 - All in Vanguard Target Retirement 2035 Fund Investor Shares - VTTHX
  • GA Teacher Retirement System (TRS) - Current contributions total $57,379. From TRS website "Your retirement benefit is calculated by using the percentage of salary formula. Simply stated, two percent is multiplied by your years of creditable service, including partial years (not to exceed 40 years). This product is then multiplied by your average monthly salary for your two highest consecutive years of membership service. Your benefit calculation is based on the 2 highest consecutive years of membership service that produce the highest benefit, which may not be your last years worked. The salary used to calculate your benefit may be limited if increases in your salary are above what is allowed by Georgia law."

Wife's Active contributions:
  • $5,500 to Roth IRA yearly
  • Max allowed yearly by law to GA TRS

Joint Assets:
  • Taxable Vanguard - $62,503 - Somewhat conservatively invested in Vanguard Balanced Index Fund Admiral Shares (VBIAX)

Joint's Active contributions:
  • $750 every/other week

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Peter Foley
Posts: 4493
Joined: Fri Nov 23, 2007 10:34 am
Location: Lake Wobegon

Re: Seeking advice/improvements

Post by Peter Foley » Thu Sep 13, 2018 11:01 pm

If you could add as a detail what your current asset allocation is and what you would like it to be that would be helpful.
At your ages a 60/40 allocation would be moderate and a 50/50 a bit conservative, but not really conservative. Where do you want to end up?

bwmQBAem20LvyMYbw
Posts: 6
Joined: Tue Jul 04, 2017 6:32 pm

Re: Seeking advice/improvements

Post by bwmQBAem20LvyMYbw » Fri Sep 14, 2018 9:05 am

Currently all of my holdings excluding the 529 accounts are as follows.

Stocks 57.34%
Bonds 29.16%
Cash 13.50%

I am fairly happy with a 60/40 allocation but I sometimes wonder if I am being too conservative.

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Peter Foley
Posts: 4493
Joined: Fri Nov 23, 2007 10:34 am
Location: Lake Wobegon

Re: Seeking advice/improvements

Post by Peter Foley » Fri Sep 14, 2018 7:45 pm

I personally think you are a little too conservative but not off target by much for a couple your age. If you were to change your Roth accounts to the 2045 fund that would give you more stocks in Roth. That is a relatively minor change but it puts more stocks in Roth which is where you want them for growth potential. You are holding a little more in cash than many would recommend, but with two rental properties you need a bigger emergency fund than most couples. Perhaps invest a bit of that cash if you think you jobs are secure.

bwmQBAem20LvyMYbw
Posts: 6
Joined: Tue Jul 04, 2017 6:32 pm

Re: Seeking advice/improvements

Post by bwmQBAem20LvyMYbw » Sun Sep 16, 2018 6:48 pm

That is what I was leaning towards doing as well. Seemed like a reasonable change to make.

Also, any thoughts on my wife's inheritance? It serves no real purpose other to just grow conservatively which is why I invested it like I did. Once I started contributing more to our joint taxable with the Balanced Index fund I am tempted to just drop the Wellesley and Target Income and just do Balanced Index across the board.

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