kicking MS managed account (401k) to the curb, do I keep any stocks?

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Topic Author
jwasilko
Posts: 8
Joined: Tue Jan 29, 2019 2:41 pm

kicking MS managed account (401k) to the curb, do I keep any stocks?

Post by jwasilko » Mon Feb 11, 2019 9:30 am

Emergency funds: all set
Debt: $90k mortgage on $750k house with less than 5 years to go
Tax Filing Status: Married Filing Jointly
Tax Rate: 33% Federal, 5.1% State (in 2017 tax year). 24% in 2018 tax year.
State of Residence: MA
Age: 50

Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: TBD

Current retirement assets $425k

Code: Select all

morgan stanley  		$210k
mass mutual			$113k
fidelity   			$55k
tiaa-cref  			$31k
Fidelity HSA 			$6k
Current Employer 401k  		$10k
His 401k 5% company match
Maxed out in 2018, contributing $25k in 2019

Current Employer 401k portfolio:

Code: Select all

24.00% 	Vanguard Total Intl Stock Index Admiral 	VTIAX	(0.11% ER)
56.00% 	Fifth Third Bank Equity Index Fund A 		none	(0.00% ER)
20.00% 	Vanguard Total Bond Market Index Admiral 	VBTLX	(0.05% ER)
***

Thanks to the Bogleheads community, I've decided to kick my expensive Morgan Stanley managed account to the curb.

I was working to consolidate my previous employer's 401ks, and the forum here has been quite helpful to see how I've chosen badly in the past. The Mass Mutual and Fidelity accounts were in mutual funds (retirement date at Fido or a group of funds that auto-rebalanced at Mass Mutual.) My Morgan Stanley account was split between stocks, ETFs and Mutual funds. I can provide more detail on that breakdown if it helps.

Over the past two days I started the process to move all 3 accounts to Etrade, where I already have a taxable account with ESPP shares and non-ESPP ETFs. I've got some questions about diversifying away from ESPP shares (without incurring lots of extra tax)that I have held from a previous employer, but that's for another post.

The Mass Mutual and Fidelity 401k accounts are coming as a check, but the Morgan Stanley account will likely get transfered as-is.

My intention is to invest it all in VTTHX VANGUARD TARGET RETIREMENT 2035 INV (0.14% ER) as I want to not have to worry about rebalancing as time goes on.

FYI Etrade (via phone) was able to offer a better spiff for the transfer than on their website at https://us.etrade.com/what-we-offer/how ... /brokerage:

Congratulations! You are now enrolled in the TF60D_2500CFC_IRA promotion. Here is how it works:

Deposit or Transfer Receive
$1MM $2,500 60 Days of commission free trades
$500K - $999,999 $1,500 60 Days of commission free trades
$250K - $499,999 $1,000 60 Days of commission free trades
$100K - $249,999 $500 60 Days of commission free trades
$25K - $99,999 $200 60 Days of commission free trades
$10K - $24,999 60 Days of commission free trades

I have a nagging feeling I should look at hanging on to some of the stocks in the MS account, but then the Boglehead voice in the back of my head tells me to simplyfy--sell it all and put it in the target fund. I should listen to that voice, right? :-)

Thanks to all in the community here for the collected wisdom.

-j

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ruralavalon
Posts: 14708
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: kicking MS managed account (401k) to the curb, do I keep any stocks?

Post by ruralavalon » Mon Feb 11, 2019 12:33 pm

Instead of rollovers of the three old 401ks (Morgan Stanley, Mass Mutual, Fidelity) to an IRA at E*Trade at least consider rollovers to your current employer's 401k plan. Your current employer's 401k plan offers some very good, broadly diversified, index funds (total U.S. stock market, total international stocks, and total bond market) with very low expense ratios.

Doing rollovers to your current employer's 401k plan would preserve the ability to do a backdoor Roth IRA in the future if necessary.

I suggest not keeping the individual stocks from the Morgan Stanley account, instead using a broadly diversified stock index fund. The Morgan Stanley account is 49% of your total retirement savings, so it looks like you may have a very large percentage in individual stocks. That not well diversified.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
jwasilko
Posts: 8
Joined: Tue Jan 29, 2019 2:41 pm

Re: kicking MS managed account (401k) to the curb, do I keep any stocks?

Post by jwasilko » Mon Feb 11, 2019 10:55 pm

Thanks for the tips and guidance!

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