What can I do better?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

What can I do better?

Post by GrowMyMoney » Thu Nov 08, 2018 10:12 pm

Hello

I posted this thread here but after doing folks helped me realize I should start with my portfolio than work down to the 409A plan. So here goes.

Emergency funds: I'm setting aside 3 months of pretty liberal spending and total expenses for this exercise.
Debt:
credit card - None
school loans - 44k @ 4.7%
car loans - $58705 @ 1.49%
mortgage - $435222 @ 4% (2042)
LOC on Rental Properties -
$35k @ 5.75%
$33k @ 6.25% - Just doing exercise helped me realize I should move this money to the cheaper loan

Tax Filing Status: Married Filing Jointly with 2 Dependent Children
Tax Rate:
28% Federal in 2017 determined from Line 43 of my return
~5.5% State
State of Residence: NJ
Age: 40

If you want to give us a detailed breakdown within each asset class (xx% large caps, xx% mid caps, xx% bonds, xx% cash, etc.), go ahead. (Most people probably will not want to do this. If you are not sure what this means, please disregard.)

Our total net worth is something like 1.8M-2M.

Providing the split of your assets and contributions between taxable and tax-advantaged accounts is also helpful. Please include all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans. For example:

Current retirement assets

Taxable - $94k
39.4% cash (for investing – do not include emergency funds)
54.4% Morgan Stanley (MS)
14% Discover Financial (DFS)
I trade options in this account so that’s the remainder

Taxable - $20k
27.1% - ANNALY CAP MGMT INC COM (NLY)
0.5% - SCHWAB® S&P 500 INDEX (SWPPX) (0.04%)
51.5% - T. ROWE PRICE NJ TAX-FREE BOND (NJTFX) (0.57%)
20% - BLACKROCK MUNIYIELD NJ FD INC COM (MYJ)

Taxable - $10k
32.4% VOO
7.7% DBC
37.6% BLV
15.1% BIV
7.2% IAU

His 401k
~10% -- 50k 100% BlackRock Lifepath Index 2040 K Fund (LIKKX) (expense ratio: 0.19%) — this is my current plan and it’s a Roth 401k
~80% -- 500k 100% SSGA Target Retirement 2045 Index (SSCUX) (expense ratio: 0.055%) previous employer
~10% -- 60k 100% AllianceBernstein Lifetime Income Strategy (expense ration: 0.00%) previous employer
Company match: the first 5% of contribution… I believe that’s 5% of based on your base comp

His Roth IRA - these expense are high I’ve done a horrible job managing this apparently!
35k (contributing max annually via conversion)
5.6% INVESCO BALANCED-RISK COMMODITY STRAT A (BRCAX) (1.65%)
18.4% FIDELITY CONTRAFUND (FCNTX) (0.74%)
14.9% MATTHEWS KOREA INVESTOR (MAKOX) (1.15%)
11.9 NEEDHAM GROWTH RETAIL (NEEGX) (2.34%)
10.3% SPDR SERIES TRUST SPDR PORTFOLIO S&P 500 GROWTH ETF (SPYG) (0.04%)
13.3% SCHWAB® S&P 500 INDEX (SWPPX) (0.04%)
13.3% Vanguard 500 Index Fund Investor Shares (VFINX) (0.05%)
7.3% VANGUARD S&P 500 ETF (VOO) (0.05%)

Her 401k - $1200
100% T. Rowe Price Retirement I 2050 I (TRPMX) (0.61%)
Company Match: 100% for the first 3%, 50% on the next 2%


Contributions

New annual Contributions
$18.5k his 401k (also specify any employer matching contributions)
$17 her 401k (also specify any employer matching contributions)
$5500 his Roth IRA
$0 her IRA/Roth IRA
$0 taxable (for retirement, not short term goals)

Available funds

Funds available in his 401(k)
Principal Global Investors Short-Term Income Inst Fund (PSHIX) (0.43)
Vanguard Federal Money Market Investor Fund (VMFXX) (0.11)
Metropolitan West Total Return Bond Plan Fund (MWTSX) (0.37)
PIMCO Real Return Instl Fund (PRRIX) (0.88)
Principal Global Investors Government & High Quality Bond Inst Fund  (PMRIX) (0.53)
Vanguard Intermediate-Term Investment-Grade Admiral Fund (VFIDX) (0.1)
BlackRock Lifepath Index Retirement K Fund  (LIRKX) (0.17)
BlackRock Lifepath Index 2020 K Fund (LIMKX) (0.15)
BlackRock Lifepath Index 2025 K Fund (LIBKX) (0.16)
BlackRock Lifepath Index 2030 K Fund (LINKX) (0.17)
BlackRock Lifepath Index 2035 K Fund (LIJKX) (0.17)
BlackRock Lifepath Index 2040 K Fund (LIKKX) (0.19)
BlackRock Lifepath Index 2045 K Fund  (LIHKX) (0.18)
BlackRock Lifepath Index 2050 K Fund (LIPKX) (0.19)
BlackRock Lifepath Index 2055 K Fund (LIVKX) (0.21)
BlackRock Lifepath Index 2060 K Fund (LIZKX) (0.6)
Vanguard Wellington Admiral Fund (VWENX) (0.17)
Alger Capital Appreciation Inst Y Fund (ACAYX) (0.85)
T. Rowe Price U.S. Large-Cap Core I Fund (RCLIX) (0.63)
Vanguard Institutional Index Institutional Fund (VINIX) (0.03)
Virtus Ceredex Large Cap Value Equity R6 Fund (STVZX) (0.83)
Boston Partners Small Cap Value II I Fund (BPSIX) (1.19)
Neuberger Berman Genesis R6 Fund (NRGSX) (0.77)
Principal Real Estate Inv Real Estate Securities Inst Fund (PIREX) (0.87)
T. Rowe Price Mid-Cap Growth I Fund  (RPTIX) (0.62)
Vanguard Small Cap Index Institutional Fund  (VSCIX) (0.04)
Wasatch Core Growth Institutional Fund  (WIGRX) (1.1)
Wells Fargo Special Mid Cap Value R6 Fund (WFPRX) (0.75)
Franklin Mutual Global Discovery R6 Fund (FMDRX) (0.85)
Lazard Emerging Markets Equity Portfolio R6 Fund (RLEMX) (1.08)
MFS International Diversification R6 Fund (MDIZX) (0.8)
Vanguard FTSE All-World ex-US Inst Fund (VFWSX) (0.1)

Funds available in her 401k
Vanguard Treasury Money Market Inv
Putnam Stable Value (15)
Metropolitan West Total Return Bond Plan
Vanguard Total Bond Market Index I
Vanguard Inflation Protected Secs Adm
Templeton Global Bond R6
Putnam Equity Income R6
Vanguard Institutional Index I
T. Rowe Price New America Growth I
PGIM QMA Mid-Cap Value R6
Vanguard Mid Cap Index I
Hartford MidCap HLS IA
Nuveen Small Cap Value R6
Vanguard Small Cap Index I
Eagle Small Cap Growth R6
American Funds EuroPacific Gr R6
Vanguard Total Intl Stock Index I
T. Rowe Price Retirement I 2005 I
T. Rowe Price Retirement I 2010 I
T. Rowe Price Retirement I 2015 I
T. Rowe Price Retirement I 2020 I
T. Rowe Price Retirement I 2025 I
T. Rowe Price Retirement I 2030 I
T. Rowe Price Retirement I 2035 I
T. Rowe Price Retirement I 2040 I
T. Rowe Price Retirement I 2045 I
T. Rowe Price Retirement I 2050 I
T. Rowe Price Retirement I 2055 I
JHancock Alternative Asset Allc R6
Personal Choice


Her Age: 32
Her salary: 115k, with inflationary increases
Her 401k: I just had her start
Her Roth: N/A
Her job stability: high
Her job satisfaction: moderate; intends to work until she’s bored

His Age: 40
His salary: 250k base, 80k bonus, 30k stock, with performance based increases
His 401k: 485k in old employers plan, 60k in old employers plan, 45k in the current Roth 401k plan (he contributes max, employer contributes 75% of
His Roth:
His job stability: moderate to high
His anticipated job satisfaction: high, intends to work until 65+
His 409A NQDC: 18k (not included in above analysis)

Their taxable investment: 120k
Just pure cash in the bank: 130k
Own two rental properties outright
Own one rental property with 70k mortgage remaining
Rental income is ~50k gross
Their HSA: 0 (contributing 3k starting year, but maybe this is an area I can do better in… happy for feedback)

If I missed any info that you guys need let me know.

Thanks!

Thegame14
Posts: 445
Joined: Mon May 07, 2018 11:53 am

Re: What can I do better?

Post by Thegame14 » Thu Nov 08, 2018 10:23 pm

you can start by not buying a car that you need to take out a $60K loan for. what does that car do that a Toyota camry cant do? I don't care about 0-60 when you have to stop at the speed limit......

you earn combined about $450K per year, but have all of this various debt. That makes no sense at all. you can easily pay off the car loan, student loans, and property loans in a few months, why haven't you done this yet?

you also have $130K in the bank earning close to nothing but loans that you are paying 6.25% on??? how does that make any sense? What are your monthly expenses?

Id immediately take that cash and pay off the two rental loans ASAP. Then I would take half of excess take home each month and knock out those student loans in a couple months, then move on to that horrible car loan..... I guess it makes more logical sense to keep that car loan and get a 2% return on a money market, but then you pay taxes on that, I just cant get over $60K for a car loan when you have student loans and other debts.....

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Thu Nov 08, 2018 10:44 pm

Thegame14 wrote:
Thu Nov 08, 2018 10:23 pm
you can start by not buying a car that you need to take out a $60K loan for. what does that car do that a Toyota camry cant do? I don't care about 0-60 when you have to stop at the speed limit......

you earn combined about $450K per year, but have all of this various debt. That makes no sense at all. you can easily pay off the car loan, student loans, and property loans in a few months, why haven't you done this yet?

you also have $130K in the bank earning close to nothing but loans that you are paying 6.25% on??? how does that make any sense? What are your monthly expenses?

Id immediately take that cash and pay off the two rental loans ASAP. Then I would take half of excess take home each month and knock out those student loans in a couple months, then move on to that horrible car loan..... I guess it makes more logical sense to keep that car loan and get a 2% return on a money market, but then you pay taxes on that, I just cant get over $60K for a car loan when you have student loans and other debts.....
While I don’t disagree with you on many fronts, we only have one car loan/payment. Also the reason I don’t pay down everything is because we do flips and other real estate investments that are cash intensive. I should probably pay down the LOCs and take out the money as needed but for us paying down the student loans would make no sense at all.

Thegame14
Posts: 445
Joined: Mon May 07, 2018 11:53 am

Re: What can I do better?

Post by Thegame14 » Thu Nov 08, 2018 10:51 pm

GrowMyMoney wrote:
Thu Nov 08, 2018 10:44 pm
Thegame14 wrote:
Thu Nov 08, 2018 10:23 pm
you can start by not buying a car that you need to take out a $60K loan for. what does that car do that a Toyota camry cant do? I don't care about 0-60 when you have to stop at the speed limit......

you earn combined about $450K per year, but have all of this various debt. That makes no sense at all. you can easily pay off the car loan, student loans, and property loans in a few months, why haven't you done this yet?

you also have $130K in the bank earning close to nothing but loans that you are paying 6.25% on??? how does that make any sense? What are your monthly expenses?

Id immediately take that cash and pay off the two rental loans ASAP. Then I would take half of excess take home each month and knock out those student loans in a couple months, then move on to that horrible car loan..... I guess it makes more logical sense to keep that car loan and get a 2% return on a money market, but then you pay taxes on that, I just cant get over $60K for a car loan when you have student loans and other debts.....
While I don’t disagree with you on many fronts, we only have one car loan/payment. Also the reason I don’t pay down everything is because we do flips and other real estate investments that are cash intensive. I should probably pay down the LOCs and take out the money as needed but for us paying down the student loans would make no sense at all.
paying down the loans is a 100% sure thing 4.7% return, would improve your cash flow each month and remove debt which to most of us is a big burden. you bring home $350K in just salary, so that is like $250K after taxes, it should only take a few months to pay this off. Why have any debt when you make that much money? Make sure you have emergency fund, max out 401K, pay off all debts, after that invest as much as you can. At your income you could easily retire at 50. why are you both planning to work til 65... What would you be accumulating all this money for? besides your kids to inherit.

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 7:44 am

Thegame14 wrote:
Thu Nov 08, 2018 10:51 pm
paying down the loans is a 100% sure thing 4.7% return, would improve your cash flow each month and remove debt which to most of us is a big burden. you bring home $350K in just salary, so that is like $250K after taxes, it should only take a few months to pay this off. Why have any debt when you make that much money? Make sure you have emergency fund, max out 401K, pay off all debts, after that invest as much as you can. At your income you could easily retire at 50. why are you both planning to work til 65... What would you be accumulating all this money for? besides your kids to inherit.
Yes I totally agree it will improve cashflow. But the cost of money for flips and construction is well over 4.7% usually >10% with 1% origination at minimum. Also, childcare alone costs us half of my wife's take home on a monthly basis. While I'd love to retire in 10 years, most of my bonuses have retention clauses so I'm not going to able to walk away like you think which is why my more senior counterparts work well to ripe age as well. I'm also expecting to pay for college for both kids and we're considering another child. So while 500k in income might seem like a lot, we're also in Northern NJ.

Wolfpack2463
Posts: 15
Joined: Wed Jun 27, 2018 8:20 am

Re: What can I do better?

Post by Wolfpack2463 » Fri Nov 09, 2018 8:04 am

With your income you should be maxing both His and Her 401ks at $18,500 for each ($19000 for 2019), His and Her Roth IRA, and the family HSA (which I believe is $7000). That is $55,000/year and they expire each year so you can’t go back and get those tax breaks. If you do that and add some taxable savings, then you should fine well before the age of 65(depending on your expenses).

I’ll echo some of the other posters and say that you make too much money to be carrying some of that debt. Mortgages are fine, but everything else needs to go.

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 8:13 am

Wolfpack2463 wrote:
Fri Nov 09, 2018 8:04 am
With your income you should be maxing both His and Her 401ks at $18,500 for each ($19000 for 2019), His and Her Roth IRA, and the family HSA (which I believe is $7000). That is $55,000/year and they expire each year so you can’t go back and get those tax breaks. If you do that and add some taxable savings, then you should fine well before the age of 65(depending on your expenses).

I’ll echo some of the other posters and say that you make too much money to be carrying some of that debt. Mortgages are fine, but everything else needs to go.
I just adjusted her 401k yesterday to max it out. I’ll get her a Roth IRA and start from this year. What’s the benefit of maxing out the HSA? I didn’t used to have this option so I’m not clear on the benefits.

Thegame14
Posts: 445
Joined: Mon May 07, 2018 11:53 am

Re: What can I do better?

Post by Thegame14 » Fri Nov 09, 2018 9:26 am

GrowMyMoney wrote:
Fri Nov 09, 2018 7:44 am
Thegame14 wrote:
Thu Nov 08, 2018 10:51 pm
paying down the loans is a 100% sure thing 4.7% return, would improve your cash flow each month and remove debt which to most of us is a big burden. you bring home $350K in just salary, so that is like $250K after taxes, it should only take a few months to pay this off. Why have any debt when you make that much money? Make sure you have emergency fund, max out 401K, pay off all debts, after that invest as much as you can. At your income you could easily retire at 50. why are you both planning to work til 65... What would you be accumulating all this money for? besides your kids to inherit.
Yes I totally agree it will improve cashflow. But the cost of money for flips and construction is well over 4.7% usually >10% with 1% origination at minimum. Also, childcare alone costs us half of my wife's take home on a monthly basis. While I'd love to retire in 10 years, most of my bonuses have retention clauses so I'm not going to able to walk away like you think which is why my more senior counterparts work well to ripe age as well. I'm also expecting to pay for college for both kids and we're considering another child. So while 500k in income might seem like a lot, we're also in Northern NJ.
I am in Northern NJ, have 1 child in daycare and #2 about to be born, and we make 1/3 of what you make, and our only debts are 10K car loan and our mortgage/Heloc, and we have a NW of 500K (1M if you include trust), and similar age as you. Our two kids in daycare will take almost 100% of DW paycheck.

Thegame14
Posts: 445
Joined: Mon May 07, 2018 11:53 am

Re: What can I do better?

Post by Thegame14 » Fri Nov 09, 2018 9:27 am

GrowMyMoney wrote:
Fri Nov 09, 2018 8:13 am
Wolfpack2463 wrote:
Fri Nov 09, 2018 8:04 am
With your income you should be maxing both His and Her 401ks at $18,500 for each ($19000 for 2019), His and Her Roth IRA, and the family HSA (which I believe is $7000). That is $55,000/year and they expire each year so you can’t go back and get those tax breaks. If you do that and add some taxable savings, then you should fine well before the age of 65(depending on your expenses).

I’ll echo some of the other posters and say that you make too much money to be carrying some of that debt. Mortgages are fine, but everything else needs to go.
I just adjusted her 401k yesterday to max it out. I’ll get her a Roth IRA and start from this year. What’s the benefit of maxing out the HSA? I didn’t used to have this option so I’m not clear on the benefits.
HSA assuming it isn't an FSA which is use it or lose it each year, lets you put aside money PRE-Tax to use for future medical expenses, you can also invest it like a 401K, and don't pay taxes if you use it for medical expense, and the growth isn't taxed, so they say it is triple tax free.

Jack FFR1846
Posts: 8064
Joined: Tue Dec 31, 2013 7:05 am

Re: What can I do better?

Post by Jack FFR1846 » Fri Nov 09, 2018 9:48 am

11.9 NEEDHAM GROWTH RETAIL (NEEGX) (2.34%)
10.3% SPDR SERIES TRUST SPDR PORTFOLIO S&P 500 GROWTH ETF (SPYG) (0.04%)
13.3% SCHWAB® S&P 500 INDEX (SWPPX) (0.04%)
13.3% Vanguard 500 Index Fund Investor Shares (VFINX) (0.05%)
7.3% VANGUARD S&P 500 ETF (VOO) (0.05%)
2.34%!! Holy being ripped off, Batman! Why would you choose this ever? I've included the Schwab and Vanguard funds just to show you've chosen some good, low cost funds. Why not all?

Here's how I choose funds. Sort by expense ratio, low to high. Then choose what you're looking for (US equity, US bond, International...). The end.

Edit: Why do you have 4 S&P 500 funds?
Bogle: Smart Beta is stupid

Wolfpack2463
Posts: 15
Joined: Wed Jun 27, 2018 8:20 am

Re: What can I do better?

Post by Wolfpack2463 » Fri Nov 09, 2018 10:40 am

Thegame14 wrote:
Fri Nov 09, 2018 9:27 am
GrowMyMoney wrote:
Fri Nov 09, 2018 8:13 am
Wolfpack2463 wrote:
Fri Nov 09, 2018 8:04 am
With your income you should be maxing both His and Her 401ks at $18,500 for each ($19000 for 2019), His and Her Roth IRA, and the family HSA (which I believe is $7000). That is $55,000/year and they expire each year so you can’t go back and get those tax breaks. If you do that and add some taxable savings, then you should fine well before the age of 65(depending on your expenses).

I’ll echo some of the other posters and say that you make too much money to be carrying some of that debt. Mortgages are fine, but everything else needs to go.
I just adjusted her 401k yesterday to max it out. I’ll get her a Roth IRA and start from this year. What’s the benefit of maxing out the HSA? I didn’t used to have this option so I’m not clear on the benefits.
HSA assuming it isn't an FSA which is use it or lose it each year, lets you put aside money PRE-Tax to use for future medical expenses, you can also invest it like a 401K, and don't pay taxes if you use it for medical expense, and the growth isn't taxed, so they say it is triple tax free.
+1

Make sure that you follow the backdoor Roth steps for your wife’s Roth because your income is over the limit. I assume you know how to do it since you already have a Roth yourself.

Admiral
Posts: 1438
Joined: Mon Oct 27, 2014 12:35 pm

Re: What can I do better?

Post by Admiral » Fri Nov 09, 2018 11:07 am

GrowMyMoney wrote:
Thu Nov 08, 2018 10:12 pm
Hello

I posted this thread here but after doing folks helped me realize I should start with my portfolio than work down to the 409A plan. So here goes.

Emergency funds: I'm setting aside 3 months of pretty liberal spending and total expenses for this exercise.
Debt:
credit card - None
school loans - 44k @ 4.7%
car loans - $58705 @ 1.49%
mortgage - $435222 @ 4% (2042)
LOC on Rental Properties -
$35k @ 5.75%
$33k @ 6.25% - Just doing exercise helped me realize I should move this money to the cheaper loan

Tax Filing Status: Married Filing Jointly with 2 Dependent Children
Tax Rate:
28% Federal in 2017 determined from Line 43 of my return
~5.5% State
State of Residence: NJ
Age: 40

If you want to give us a detailed breakdown within each asset class (xx% large caps, xx% mid caps, xx% bonds, xx% cash, etc.), go ahead. (Most people probably will not want to do this. If you are not sure what this means, please disregard.)

Our total net worth is something like 1.8M-2M.

Providing the split of your assets and contributions between taxable and tax-advantaged accounts is also helpful. Please include all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans. For example:

Current retirement assets

Taxable - $94k
39.4% cash (for investing – do not include emergency funds)
54.4% Morgan Stanley (MS)
14% Discover Financial (DFS)
I trade options in this account so that’s the remainder

Taxable - $20k
27.1% - ANNALY CAP MGMT INC COM (NLY)
0.5% - SCHWAB® S&P 500 INDEX (SWPPX) (0.04%)
51.5% - T. ROWE PRICE NJ TAX-FREE BOND (NJTFX) (0.57%)
20% - BLACKROCK MUNIYIELD NJ FD INC COM (MYJ)

Taxable - $10k
32.4% VOO
7.7% DBC
37.6% BLV
15.1% BIV
7.2% IAU

His 401k
~10% -- 50k 100% BlackRock Lifepath Index 2040 K Fund (LIKKX) (expense ratio: 0.19%) — this is my current plan and it’s a Roth 401k
~80% -- 500k 100% SSGA Target Retirement 2045 Index (SSCUX) (expense ratio: 0.055%) previous employer
~10% -- 60k 100% AllianceBernstein Lifetime Income Strategy (expense ration: 0.00%) previous employer
Company match: the first 5% of contribution… I believe that’s 5% of based on your base comp

His Roth IRA - these expense are high I’ve done a horrible job managing this apparently!
35k (contributing max annually via conversion)
5.6% INVESCO BALANCED-RISK COMMODITY STRAT A (BRCAX) (1.65%)
18.4% FIDELITY CONTRAFUND (FCNTX) (0.74%)
14.9% MATTHEWS KOREA INVESTOR (MAKOX) (1.15%)
11.9 NEEDHAM GROWTH RETAIL (NEEGX) (2.34%)
10.3% SPDR SERIES TRUST SPDR PORTFOLIO S&P 500 GROWTH ETF (SPYG) (0.04%)
13.3% SCHWAB® S&P 500 INDEX (SWPPX) (0.04%)
13.3% Vanguard 500 Index Fund Investor Shares (VFINX) (0.05%)
7.3% VANGUARD S&P 500 ETF (VOO) (0.05%)

Her 401k - $1200
100% T. Rowe Price Retirement I 2050 I (TRPMX) (0.61%)
Company Match: 100% for the first 3%, 50% on the next 2%


Contributions

New annual Contributions
$18.5k his 401k (also specify any employer matching contributions)
$17 her 401k (also specify any employer matching contributions)
$5500 his Roth IRA
$0 her IRA/Roth IRA
$0 taxable (for retirement, not short term goals)

Available funds

Funds available in his 401(k)
Principal Global Investors Short-Term Income Inst Fund (PSHIX) (0.43)
Vanguard Federal Money Market Investor Fund (VMFXX) (0.11)
Metropolitan West Total Return Bond Plan Fund (MWTSX) (0.37)
PIMCO Real Return Instl Fund (PRRIX) (0.88)
Principal Global Investors Government & High Quality Bond Inst Fund  (PMRIX) (0.53)
Vanguard Intermediate-Term Investment-Grade Admiral Fund (VFIDX) (0.1)
BlackRock Lifepath Index Retirement K Fund  (LIRKX) (0.17)
BlackRock Lifepath Index 2020 K Fund (LIMKX) (0.15)
BlackRock Lifepath Index 2025 K Fund (LIBKX) (0.16)
BlackRock Lifepath Index 2030 K Fund (LINKX) (0.17)
BlackRock Lifepath Index 2035 K Fund (LIJKX) (0.17)
BlackRock Lifepath Index 2040 K Fund (LIKKX) (0.19)
BlackRock Lifepath Index 2045 K Fund  (LIHKX) (0.18)
BlackRock Lifepath Index 2050 K Fund (LIPKX) (0.19)
BlackRock Lifepath Index 2055 K Fund (LIVKX) (0.21)
BlackRock Lifepath Index 2060 K Fund (LIZKX) (0.6)
Vanguard Wellington Admiral Fund (VWENX) (0.17)
Alger Capital Appreciation Inst Y Fund (ACAYX) (0.85)
T. Rowe Price U.S. Large-Cap Core I Fund (RCLIX) (0.63)
Vanguard Institutional Index Institutional Fund (VINIX) (0.03)
Virtus Ceredex Large Cap Value Equity R6 Fund (STVZX) (0.83)
Boston Partners Small Cap Value II I Fund (BPSIX) (1.19)
Neuberger Berman Genesis R6 Fund (NRGSX) (0.77)
Principal Real Estate Inv Real Estate Securities Inst Fund (PIREX) (0.87)
T. Rowe Price Mid-Cap Growth I Fund  (RPTIX) (0.62)
Vanguard Small Cap Index Institutional Fund  (VSCIX) (0.04)
Wasatch Core Growth Institutional Fund  (WIGRX) (1.1)
Wells Fargo Special Mid Cap Value R6 Fund (WFPRX) (0.75)
Franklin Mutual Global Discovery R6 Fund (FMDRX) (0.85)
Lazard Emerging Markets Equity Portfolio R6 Fund (RLEMX) (1.08)
MFS International Diversification R6 Fund (MDIZX) (0.8)
Vanguard FTSE All-World ex-US Inst Fund (VFWSX) (0.1)

Funds available in her 401k
Vanguard Treasury Money Market Inv
Putnam Stable Value (15)
Metropolitan West Total Return Bond Plan
Vanguard Total Bond Market Index I
Vanguard Inflation Protected Secs Adm
Templeton Global Bond R6
Putnam Equity Income R6
Vanguard Institutional Index I
T. Rowe Price New America Growth I
PGIM QMA Mid-Cap Value R6
Vanguard Mid Cap Index I
Hartford MidCap HLS IA
Nuveen Small Cap Value R6
Vanguard Small Cap Index I
Eagle Small Cap Growth R6
American Funds EuroPacific Gr R6
Vanguard Total Intl Stock Index I
T. Rowe Price Retirement I 2005 I
T. Rowe Price Retirement I 2010 I
T. Rowe Price Retirement I 2015 I
T. Rowe Price Retirement I 2020 I
T. Rowe Price Retirement I 2025 I
T. Rowe Price Retirement I 2030 I
T. Rowe Price Retirement I 2035 I
T. Rowe Price Retirement I 2040 I
T. Rowe Price Retirement I 2045 I
T. Rowe Price Retirement I 2050 I
T. Rowe Price Retirement I 2055 I
JHancock Alternative Asset Allc R6
Personal Choice


Her Age: 32
Her salary: 115k, with inflationary increases
Her 401k: I just had her start
Her Roth: N/A
Her job stability: high
Her job satisfaction: moderate; intends to work until she’s bored

His Age: 40
His salary: 250k base, 80k bonus, 30k stock, with performance based increases
His 401k: 485k in old employers plan, 60k in old employers plan, 45k in the current Roth 401k plan (he contributes max, employer contributes 75% of
His Roth:
His job stability: moderate to high
His anticipated job satisfaction: high, intends to work until 65+
His 409A NQDC: 18k (not included in above analysis)

Their taxable investment: 120k
Just pure cash in the bank: 130k
Own two rental properties outright
Own one rental property with 70k mortgage remaining
Rental income is ~50k gross
Their HSA: 0 (contributing 3k starting year, but maybe this is an area I can do better in… happy for feedback)

If I missed any info that you guys need let me know.

Thanks!
This is just mind boggling. Real-estate "flips"? 60k car loans, big mortgage, rental props with mortgages, debt, and a million funds with high ERs.

You need to simplify your financial life. First, since those funds are in retirement accounts, I would sell everything and get into the three-fund portfolio, with an AA that reflects you risk tolerance. I would not try to make a quick buck on real estate (YMMV of course, but if your schemes are keeping you in debt--which they are--they are not worth it.) I would pay off the loans. I would max all retirement space. The car loan...well at least the rate is low. That's about all that can be said. That cash is doing you no good earning, what 2% while you carry high-rate loans. Pay them off!

I

jwhitaker
Posts: 43
Joined: Thu Jun 16, 2016 12:57 pm

Re: What can I do better?

Post by jwhitaker » Fri Nov 09, 2018 11:09 am

Trying to be helpful. I think there is a big overlap with bogleheads and people who like simplicity. People who love having a million things going on will also tend to be attracted to the idea of actively managed investment portfolios. Also real estate flips and rental properties. Hence many who would tell you to quickly pay off debt, even if technically it's 5% versus elsewhere you will be borrowing at 10%. Simplicity. Those people would also tell you not to borrow, even if it means one less flip or rental property. I agree with those people. You may not, no harm done. Live life how you want, but you are the one posting your financial life asking for advice. Also no offense but a pet peeve of mine is people actually thinking a total income over 200k is somehow middle class, or not that much. 500k is an extremely large amount of money. If you cannot fulfill all your wildest dreams at that income, it is about choices, not reality.

DanEmmy
Posts: 52
Joined: Tue Jun 28, 2016 9:16 pm

Re: What can I do better?

Post by DanEmmy » Fri Nov 09, 2018 11:29 am

The beauty of creating these "reports" for the boglehead community is that it's actually an exercise in examining your financial life and putting it all down on paper. By doing so here, you've probably realized already what sticks out, what can use some streamlining, etc. I agree with these guys, start the the basics: clean up the portfolios, pay off debt, max out all tax advantaged space. Then worry about "ventures".

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 11:42 am

Jack FFR1846 wrote:
Fri Nov 09, 2018 9:48 am
11.9 NEEDHAM GROWTH RETAIL (NEEGX) (2.34%)
10.3% SPDR SERIES TRUST SPDR PORTFOLIO S&P 500 GROWTH ETF (SPYG) (0.04%)
13.3% SCHWAB® S&P 500 INDEX (SWPPX) (0.04%)
13.3% Vanguard 500 Index Fund Investor Shares (VFINX) (0.05%)
7.3% VANGUARD S&P 500 ETF (VOO) (0.05%)
2.34%!! Holy being ripped off, Batman! Why would you choose this ever? I've included the Schwab and Vanguard funds just to show you've chosen some good, low cost funds. Why not all?

Here's how I choose funds. Sort by expense ratio, low to high. Then choose what you're looking for (US equity, US bond, International...). The end.

Edit: Why do you have 4 S&P 500 funds?
Totally agree about those fund costs. What made me chose it was I picked it right out of college when I knew no better and fees weren't in the headlines? I'm definitely going to transition out of that guy and the Mathews fund. I think I mentioned in the original post that just going through this exercise has been tremendously helpful in even self identifying opportunities. This is one of them for sure. Great advice.

I have 4 S&P 500 funds because I was investing using an automatic investing program which only worked for no load no fee funds. At the time I already had VFINX but my brokerage charged fees for Vanguard Funds so I switched to SWPPX. SPYG is a slightly different instrument than standard S&P 500 so I wanted to see how it would perform in comparison. And VOO... well before I figured out that there was a free automatic investing program and that the MFs had a similar charge to the ETFs I thought it would be good decision to go with an ETF instead. Switching out of VOO will be an execution fee etc so at this point I'm going to keep it as is. And I thought about switching to VFINX now that my brokerage doesn't charge for them but SWPPX is slightly cheaper.

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 11:42 am

Wolfpack2463 wrote:
Fri Nov 09, 2018 10:40 am
Thegame14 wrote:
Fri Nov 09, 2018 9:27 am
GrowMyMoney wrote:
Fri Nov 09, 2018 8:13 am
Wolfpack2463 wrote:
Fri Nov 09, 2018 8:04 am
With your income you should be maxing both His and Her 401ks at $18,500 for each ($19000 for 2019), His and Her Roth IRA, and the family HSA (which I believe is $7000). That is $55,000/year and they expire each year so you can’t go back and get those tax breaks. If you do that and add some taxable savings, then you should fine well before the age of 65(depending on your expenses).

I’ll echo some of the other posters and say that you make too much money to be carrying some of that debt. Mortgages are fine, but everything else needs to go.
I just adjusted her 401k yesterday to max it out. I’ll get her a Roth IRA and start from this year. What’s the benefit of maxing out the HSA? I didn’t used to have this option so I’m not clear on the benefits.
HSA assuming it isn't an FSA which is use it or lose it each year, lets you put aside money PRE-Tax to use for future medical expenses, you can also invest it like a 401K, and don't pay taxes if you use it for medical expense, and the growth isn't taxed, so they say it is triple tax free.
+1

Make sure that you follow the backdoor Roth steps for your wife’s Roth because your income is over the limit. I assume you know how to do it since you already have a Roth yourself.
Yep... I know all about conversions. Thanks for the heads up though!

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 12:00 pm

Admiral wrote:
Fri Nov 09, 2018 11:07 am
This is just mind boggling. Real-estate "flips"? 60k car loans, big mortgage, rental props with mortgages, debt, and a million funds with high ERs.

You need to simplify your financial life. First, since those funds are in retirement accounts, I would sell everything and get into the three-fund portfolio, with an AA that reflects you risk tolerance. I would not try to make a quick buck on real estate (YMMV of course, but if your schemes are keeping you in debt--which they are--they are not worth it.) I would pay off the loans. I would max all retirement space. The car loan...well at least the rate is low. That's about all that can be said. That cash is doing you no good earning, what 2% while you carry high-rate loans. Pay them off!

I
I hope I don't seem dismissive because I do appreciate the feedback but the flips are doing tremendously well. ROC is well over 20% let alone 10% so yeah real estate flips. The rental properties with the mortgages are because I have a 3rd property that I did a LOC on the other two to finance. I'm gaining equity and appreciation well above the interest rates. I think each situation is different but I'm not anti loan at all. To me the cost of money vs the return on your other investments need to be weighed. I could go through these in detail but I will just leave it as trust me I'm getting a bigger return than 5% interest.

I like the advice to simplify my financial life. There is certainly opportunity there. I would love some advice here but I looked into the 3 fund portfolio a while back using I believe this tool https://www.marketwatch.com/lazyportfol ... aritaville. Ultimately each one of the lazy portfolios in the tool underperformed the S&P 500 over the 10 yr horizon. I wish it went through a 15 year cycle but thats why I decided to just go straight S&P500 recently. If you notice above I have a $10k portfolio which is really a Ray Dalio All Weather Portfolio a la Tony Robbins' book because I anted to see how it faired. I could do the same with a 3 fund but anyway happy to listen to folks here.

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 12:01 pm

Thegame14 wrote:
Fri Nov 09, 2018 9:27 am

HSA assuming it isn't an FSA which is use it or lose it each year, lets you put aside money PRE-Tax to use for future medical expenses, you can also invest it like a 401K, and don't pay taxes if you use it for medical expense, and the growth isn't taxed, so they say it is triple tax free.
it's definitely a HSA. I just read about it and went in and turned it up to the max allowed. Seems like a great option. Thanks so much!

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 12:04 pm

jwhitaker wrote:
Fri Nov 09, 2018 11:09 am
Trying to be helpful. I think there is a big overlap with bogleheads and people who like simplicity. People who love having a million things going on will also tend to be attracted to the idea of actively managed investment portfolios. Also real estate flips and rental properties. Hence many who would tell you to quickly pay off debt, even if technically it's 5% versus elsewhere you will be borrowing at 10%. Simplicity. Those people would also tell you not to borrow, even if it means one less flip or rental property. I agree with those people. You may not, no harm done. Live life how you want, but you are the one posting your financial life asking for advice. Also no offense but a pet peeve of mine is people actually thinking a total income over 200k is somehow middle class, or not that much. 500k is an extremely large amount of money. If you cannot fulfill all your wildest dreams at that income, it is about choices, not reality.
All points noted. But I definitely don't fall into the no debt camp as I mentioned. Leverage isn't a bad thing when you can get better returns than you're paying as I am. I understand other peoples views and I'm happy to listen and consider them. As you mentioned I knew what I was getting myself into when I posted :).

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 12:05 pm

DanEmmy wrote:
Fri Nov 09, 2018 11:29 am
The beauty of creating these "reports" for the boglehead community is that it's actually an exercise in examining your financial life and putting it all down on paper. By doing so here, you've probably realized already what sticks out, what can use some streamlining, etc. I agree with these guys, start the the basics: clean up the portfolios, pay off debt, max out all tax advantaged space. Then worry about "ventures".
Yeah this exercise and the format was extremely helpful to me and I'm learning a lot just having this discussion with everyone. Totally appreciate all the feedback.

Thegame14
Posts: 445
Joined: Mon May 07, 2018 11:53 am

Re: What can I do better?

Post by Thegame14 » Fri Nov 09, 2018 12:20 pm

does your company offer a child care FSA? That would allow you to put money into it pretax to pay for dependent care, ie daycare with pretax money. I wish my company had this, it would be a big savings...

The money doesn't grow and if you don't use it you lose it, but It usually is only a few thousand dollars vs $12K plus per year in daycare costs, so that isn't a problem using it up.

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 12:28 pm

Thegame14 wrote:
Fri Nov 09, 2018 12:20 pm
does your company offer a child care FSA? That would allow you to put money into it pretax to pay for dependent care, ie daycare with pretax money. I wish my company had this, it would be a big savings...

The money doesn't grow and if you don't use it you lose it, but It usually is only a few thousand dollars vs $12K plus per year in daycare costs, so that isn't a problem using it up.
Yes I maximize my Child Care FSA already. Only covers about 6 months of school but I’ll take it.

sp0704
Posts: 28
Joined: Tue Feb 23, 2016 3:34 pm

Re: What can I do better?

Post by sp0704 » Fri Nov 09, 2018 12:34 pm

Others have chimed in already regarding the fees you're paying on the funds, which you recognize. However, I disagree with the others regarding your use of loans for the cars, as they are at a low rate. It sounds like the risks you are taking with real estate are profitable at a much higher return, so if you can keep doing that successfully, then use that money for a better return then you are borrowing. I would use the idle cash to pay off the school loans (I would say that's first priority) and rental property loans as you are able to save more cash and have more buffer once paying all of this off. It is no secret that childcare costs are a lot. I think many without kids or older kids forget this.

User avatar
Misenplace
Posts: 243
Joined: Mon Feb 01, 2016 9:46 pm

Re: What can I do better?

Post by Misenplace » Fri Nov 09, 2018 1:39 pm

I won't try to deter you from your real estate ventures, but I would caution you to perhaps be slightly more conservative with your equity/bond portfolios because the real estate market can turn on a dime- more reward you say, but also more risk. Also, you appear to have a great job with good growth prospects, you would not want your side gigs to slow your advancement in your major career.

By the way, although you say you have a Roth 401k, the matching funds that your employer puts in are almost certainly going into a regular pretax 401k. So your current 401k is probably a mix of Roth and pretax. At first I thought it seemed a no-brainer to roll your old 401k accounts into your current account- you have excellent choices there- but now I am not so sure. If your calculations lead you to switch from Roth 401k contributions to regular 401k contributions, then that is a good time to roll over into your current 401k. I am surprised doing Roth 401k makes sense for you given your income, but you seem pretty sure. Can you do in-service roll outs to separate the Roth 401k from the pretax 401k? The reason I ask is because you want your bonds to be in pretax accounts, but you want the Roth 401k in equities.

You didn't say what your desired asset allocation was, so I would suggest around 70 stocks:30 bonds. You didn't give any opinions on what percent of the stocks would be in International. Vanguard says 40%, Bogle says 10%, so I would suggest split the difference. I seem to recall a Vanguard white paper that says you get most of the diversification benefit with 25-30%. Pay off the loans that make sense to you (I would pay off all but the mortgage and car loan). Then you know the size of your investable pot. You would want the bond allocation in something like VG Intermediate Term Investment Grade Admiral fund in pretax 401k (yours) or VG Total Bond Index (in your wife's). Fill up the rest of your 401k's with your desired allocation to Total US (use 80% Vanguard Instit Index and 20% Vanguard Small Cap Index to approximate total US in your current 401k- see Wiki article https://www.bogleheads.org/wiki/Approxi ... ock_market) and then put whatever is leftover in Total International (Vanguard FTSE All-World ex-US Inst Fund). Put the remainder of Total International in your after tax account (use Vanguard Total International Stock Index in your after tax account, and read up about tax loss harvesting).

And I read your previous post about your DCP. Don't put anything more your company's DCP, at least not until you are close to retiring. Private DCP tend to be too restrictive in how you pull the money out, has the company credit risk, if your company is acquired that is yet another unquantifiable risk (with the acquirer change the plan?), and you are too far from retirement to know how you will want to use it. Does your wife's job have a governmental 457 plan? Those are far more flexible in withdrawals (although limited in how much you can put into them).

You are already on board with the HSA. Good, it's like free money.

As for 529 accounts for your children, it would be great to start those for them asap. You can front load them with 5 years of contributions at once, and then forget about it. 5 years of contributions from both of you is $150K. That is enough for in-state tuition at a state U, and is the most I would want to put in. https://www.investopedia.com/articles/m ... 9-plan.asp

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 6:04 pm

Misenplace wrote:
Fri Nov 09, 2018 1:39 pm
I won't try to deter you from your real estate ventures, but I would caution you to perhaps be slightly more conservative with your equity/bond portfolios because the real estate market can turn on a dime- more reward you say, but also more risk. Also, you appear to have a great job with good growth prospects, you would not want your side gigs to slow your advancement in your major career.

By the way, although you say you have a Roth 401k, the matching funds that your employer puts in are almost certainly going into a regular pretax 401k. So your current 401k is probably a mix of Roth and pretax. At first I thought it seemed a no-brainer to roll your old 401k accounts into your current account- you have excellent choices there- but now I am not so sure. If your calculations lead you to switch from Roth 401k contributions to regular 401k contributions, then that is a good time to roll over into your current 401k. I am surprised doing Roth 401k makes sense for you given your income, but you seem pretty sure. Can you do in-service roll outs to separate the Roth 401k from the pretax 401k? The reason I ask is because you want your bonds to be in pretax accounts, but you want the Roth 401k in equities.

You didn't say what your desired asset allocation was, so I would suggest around 70 stocks:30 bonds. You didn't give any opinions on what percent of the stocks would be in International. Vanguard says 40%, Bogle says 10%, so I would suggest split the difference. I seem to recall a Vanguard white paper that says you get most of the diversification benefit with 25-30%. Pay off the loans that make sense to you (I would pay off all but the mortgage and car loan). Then you know the size of your investable pot. You would want the bond allocation in something like VG Intermediate Term Investment Grade Admiral fund in pretax 401k (yours) or VG Total Bond Index (in your wife's). Fill up the rest of your 401k's with your desired allocation to Total US (use 80% Vanguard Instit Index and 20% Vanguard Small Cap Index to approximate total US in your current 401k- see Wiki article https://www.bogleheads.org/wiki/Approxi ... ock_market) and then put whatever is leftover in Total International (Vanguard FTSE All-World ex-US Inst Fund). Put the remainder of Total International in your after tax account (use Vanguard Total International Stock Index in your after tax account, and read up about tax loss harvesting).

And I read your previous post about your DCP. Don't put anything more your company's DCP, at least not until you are close to retiring. Private DCP tend to be too restrictive in how you pull the money out, has the company credit risk, if your company is acquired that is yet another unquantifiable risk (with the acquirer change the plan?), and you are too far from retirement to know how you will want to use it. Does your wife's job have a governmental 457 plan? Those are far more flexible in withdrawals (although limited in how much you can put into them).

You are already on board with the HSA. Good, it's like free money.

As for 529 accounts for your children, it would be great to start those for them asap. You can front load them with 5 years of contributions at once, and then forget about it. 5 years of contributions from both of you is $150K. That is enough for in-state tuition at a state U, and is the most I would want to put in. https://www.investopedia.com/articles/m ... 9-plan.asp
I'm only as sure about the Roth 401k as the calculators I've run which mostly don't seem highly sophisticated. If you have a reference to a better calculator I'm happy to try it. I'm not even sure what in service rollouts are to be honest but I can add this to my todo list from this thread.

As you point out I don't have a desired asset allocation but generally I wind up in the moderate aggressive camp if I run a typical Risk Tolerance Questionnaire. I have plenty of risk on the real estate side as you point out so I sway a little more moderate than aggressive on the securities portion. I've had terrible luck in international exposure but clearly thats why it should be a minority of your portfolio. I'm guessing 25% international doesn't feel that bad given the info you provided. Do the allocations you provided apply to both retirement and non-retirement accounts?

I'll stop the 409A plan for the time being to get the debt off our balance sheet and resume at a later time. My wife does not have a deferred comp plan.

I spoke to College Coach about the 529s and they said don't put a dime into them until your wife's student loans are paid off. Do you disagree?

Grt2bOutdoors
Posts: 19474
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: What can I do better?

Post by Grt2bOutdoors » Fri Nov 09, 2018 6:10 pm

Sell MS - pay off student loans. Take your monthly student loan payments and open a 529 plan with Utah plan - my529.org or NYS529Direct - nysaves.org.

Why are you holding nearly $50k in one equity? How much in gains do you have in Morgan? Are you paying for a college coach? Don’t. Ask your questions here.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 6:39 pm

Grt2bOutdoors wrote:
Fri Nov 09, 2018 6:10 pm
Sell MS - pay off student loans. Take your monthly student loan payments and open a 529 plan with Utah plan - my529.org or NYS529Direct - nysaves.org.

Why are you holding nearly $50k in one equity? How much in gains do you have in Morgan? Are you paying for a college coach? Don’t. Ask your questions here.
MS/DFS = part of a very old ESPP that's why I have so much of it... I'm selling calls against them until I get exercised and then good riddance.

College Coach = It was a company benefit.

User avatar
Misenplace
Posts: 243
Joined: Mon Feb 01, 2016 9:46 pm

Re: What can I do better?

Post by Misenplace » Fri Nov 09, 2018 6:41 pm

GrowMyMoney wrote:
Fri Nov 09, 2018 6:04 pm
I'm only as sure about the Roth 401k as the calculators I've run which mostly don't seem highly sophisticated. If you have a reference to a better calculator I'm happy to try it. I'm not even sure what in service rollouts are to be honest but I can add this to my todo list from this thread.
Check out the Bogleheads Wiki on this. Here is a good place to start. https://www.bogleheads.org/wiki/Traditional_versus_Roth
GrowMyMoney wrote:
Fri Nov 09, 2018 6:04 pm
As you point out I don't have a desired asset allocation but generally I wind up in the moderate aggressive camp if I run a typical Risk Tolerance Questionnaire. I have plenty of risk on the real estate side as you point out so I sway a little more moderate than aggressive on the securities portion. I've had terrible luck in international exposure but clearly thats why it should be a minority of your portfolio. I'm guessing 25% international doesn't feel that bad given the info you provided. Do the allocations you provided apply to both retirement and non-retirement accounts?
Yes, you have to view your entire account as one. Let's say by the end of this year you have about 600K in 401(k) and Roths, your wife has 23K in 401(k) and Roths, and after paying off your student loans (at least) you have 80K in taxable accounts. Your investable pot is about 700K. Start with the bond allocation, which is 210K (assuming you pick 70 equities:30 bond). You already have about 15K in muni bonds in your taxable. Unless they are at a loss, you might as well keep them. Then find 401(k) room to put the other 195K of bonds. Regular bond funds are usually best held in a pretax account because they only kick off interest that increases your tax bracket. There is a Wiki article on tax efficient fund placement.
https://www.bogleheads.org/wiki/Tax-eff ... _placement
GrowMyMoney wrote:
Fri Nov 09, 2018 6:04 pm
I spoke to College Coach about the 529s and they said don't put a dime into them until your wife's student loans are paid off. Do you disagree?
I agree that you need to pay off your student loans first. I took that as a given.

GrowMyMoney
Posts: 28
Joined: Wed Oct 31, 2018 11:39 am

Re: What can I do better?

Post by GrowMyMoney » Fri Nov 09, 2018 6:53 pm

Misenplace wrote:
Fri Nov 09, 2018 6:41 pm
GrowMyMoney wrote:
Fri Nov 09, 2018 6:04 pm
I'm only as sure about the Roth 401k as the calculators I've run which mostly don't seem highly sophisticated. If you have a reference to a better calculator I'm happy to try it. I'm not even sure what in service rollouts are to be honest but I can add this to my todo list from this thread.
Check out the Bogleheads Wiki on this. Here is a good place to start. https://www.bogleheads.org/wiki/Traditional_versus_Roth
GrowMyMoney wrote:
Fri Nov 09, 2018 6:04 pm
As you point out I don't have a desired asset allocation but generally I wind up in the moderate aggressive camp if I run a typical Risk Tolerance Questionnaire. I have plenty of risk on the real estate side as you point out so I sway a little more moderate than aggressive on the securities portion. I've had terrible luck in international exposure but clearly thats why it should be a minority of your portfolio. I'm guessing 25% international doesn't feel that bad given the info you provided. Do the allocations you provided apply to both retirement and non-retirement accounts?
Yes, you have to view your entire account as one. Let's say by the end of this year you have about 600K in 401(k) and Roths, your wife has 23K in 401(k) and Roths, and after paying off your student loans (at least) you have 80K in taxable accounts. Your investable pot is about 700K. Start with the bond allocation, which is 210K (assuming you pick 70 equities:30 bond). You already have about 15K in muni bonds in your taxable. Unless they are at a loss, you might as well keep them. Then find 401(k) room to put the other 195K of bonds. Regular bond funds are usually best held in a pretax account because they only kick off interest that increases your tax bracket. There is a Wiki article on tax efficient fund placement.
https://www.bogleheads.org/wiki/Tax-eff ... _placement
GrowMyMoney wrote:
Fri Nov 09, 2018 6:04 pm
I spoke to College Coach about the 529s and they said don't put a dime into them until your wife's student loans are paid off. Do you disagree?
I agree that you need to pay off your student loans first. I took that as a given.
I guess my question is given my expense ratios for the TDFs are pretty reasonable ie >.20% and some less than .05% or less. Is there a good reason to manage this on my own in the 401ks?

User avatar
Misenplace
Posts: 243
Joined: Mon Feb 01, 2016 9:46 pm

Re: What can I do better?

Post by Misenplace » Fri Nov 09, 2018 8:34 pm

GrowMyMoney wrote:
Fri Nov 09, 2018 6:53 pm
I guess my question is given my expense ratios for the TDFs are pretty reasonable ie >.20% and some less than .05% or less. Is there a good reason to manage this on my own in the 401ks?
You could do that, and they seem to be decent funds. Perhaps that is a good plan for the immediate future- use all your taxable to pay off the student loans and front load the 529s, and just use target date retirement funds in your 401k for now.

Eventually, as you are able to add to your after tax investment account (after addressing the other spending priorities pointed out above), you may want to switch out of target date funds. The problem that I would have is monitoring the glide path from equities to bonds, which tends to get steep at around age 40. I did a quick search, and I could not find your State Street fund with that ticker symbol (it may be a proprietary fund to your old 401k). But if it is like the Vanguard Target Date funds, they stay at 90% equities until the client is around age 40, and then they go heavier in bond every year. So it will be a moving target for you to keep your overall portfolio (adding up taxable, Roth, Roth 401k, and yours and your wife's 401k) at the appropriate asset allocation.

Ah, I found your fund by searching the name (it had a different ticker symbol). It's 90:10, just as I suspected. Since you have about 500K in it, that means you have 50K in bonds there. Add that to your munis, and you have 65K in bonds (maybe 70K including your other 401k's). 10% bonds is pretty aggressive considering your real estate flipping could go south, but reasonable minds could disagree. Also, that will start to change shortly (see the chart at the bottom of the first page of this PDF) so then you have the moving target on exactly what is your actual bond allocation:
https://www.ssgafunds.com/library-conte ... -guide.pdf

Post Reply