Emergency funds: Yes, 6 months.
Debt: $50,675 student loan; 6.550% interest. I know we should re-finance, but we’re waiting to see what happens in November. Paying at least the $2500 for the tax deduction. Otherwise we’ll pay off more aggressively on a 5-year fixed at 3.33%.
Tax Filing Status: (Married Filing Jointly)
State of Residence: Living abroad for the next 2-5 years.
Age: Both 32
Tax Rate: Federal: These next few years, projected 12%. After ~2025, back at 24% dual income. State: N/A
Desired Asset Allocation: 60% stocks / 40% bonds
Desired International Allocation: 20%
Portfolio size: mid 200k
Her Roth IRA:
(9.3%) Fidelity Freedom Index 2055 Fund - FDEWX 0.12%
(18%) Vanguard Target Retirement 2050 Trust Fund - 0.06%
(0.5%) FID Contrafund Pool - 0.58%
(0.33%) FID 500 INDEX FXAIX - 0.85%
(0.17%) WM Blair SMMIDCP GR - 0.02%
(0.17%) FID DIVSFD INTL POOL - 0.58%
(0.47%) Omnicom Stock Fund OMC - 0.00%
(0.75%) FDIC-INSURED DEPOSIT SWEEP - CORE
(11.85%) Publicly Traded Company Stock
(2.61%) Husband FUN Stock Fund
We have around 90k outside of our emergency fund to invest. Based off all the insightful Wikis and previous threads, here’s my proposed plan of action for a revised portfolio...
- $12,000 in his+her Roth for 2019 and 2020 while we’re under the income limit (a portion of which we’ll use the sale of her small COP/OXY/XOM 2k taxable account).
- Convert his+her 401k to Roth IRA while we have access to the FEIC to cover the minimal tax burden on the additional income.
- Open up two 529s for future children. Don’t count this as part of retirement portfolio, but use a more aggressive AA (90/10/30?) and gradually adjust the allocations as they get closer to college age.
- Contribute $2000 to a Coverdell for K-12 school supplies/books/equipment.
- Put 50k in a CD for future house down payment/student loan payoff.
- We have a side LLC Partnership, so open a Solo 401k (?) to house the majority of bond investments (via any side income) to make room for the higher-yield potential within the Roths.
- Continue contributing $12k/year via backdoor Roth once our income limit surpasses the cap.
- Reassess company stock. Should we be aiming for only 5-10% of our portfolio?
- Re-balance portfolio annually based off desired asset allocation (via this link:https://www.bogleheads.org/wiki/Rebalancing).
- When we get the opportunity to contribute again to an HSA/401k/etc, follow the funding priority here:https://www.bogleheads.org/wiki/Priorit ... nvestments
- And if we get to the bottom of the list and still have additional money to invest (ha), use tax-efficient funds like Hi-Yield Bonds, Taxable Bonds, TIPS, REIT Stocks, etc. in taxable accounts. All of which I do not yet understand, but I'll keep reading.
Her Roth IRA:
(10.6%) Fidelity Total Market Index Fund FSKAX - 0.015%
(10.6%) Fidelity Total International Index Fund FTIHX - 0.060%
(20.8%) Fidelity U.S. Bond Index FXNAX - 0.025%
His [new] Roth IRA:
(7.5%) Vanguard Total Stock Market Index Fund - (VTSAX) - 0.04%
(9.5%) Vanguard Total International Stock Index Fund - (VTIAX) - 0.11%
(16.3%) Vanguard Total Bond Market Fund - (VBTLX) - 0.05%
(1.06%) Keep cash to cover any medical expenses.
(3.43%) Vanguard Inflation-Protected Sec I I VIPIX - 0.07%
(16.7%) Publicly Traded Company Stock (Domestic)
(3.69%) Husband Fun Stock Fund (Domestic)
Other funds available in his HSA: VIIIX VANG INST INDEX INSTL PLUS LARGE BLEND 0.02%
VBMPX VANG TOTAL BOND MARKET IDX INSTLPLS 0.03%
VIGIX VANG GROWTH INDEX INSTITUTIONAL 0.04%
VEMPX VANG EXTENDED MARKET INDEX INSTLPLUS 0.05%
VSMAX VANG SMALL CAP INDEX ADM 0.05%
VVIAX VANG VALUE INDEX ADM 0.05%
VTAPX VANG SHRT-TERM INFL-PROT SEC IDX ADM 0.06%
VSIAX VANG SMALL CAP VALUE INDEX ADMIRAL 0.07%
VTPSX VANG TOTAL INTL STOCK IDX INSTLPLS 0.07%
VBIRX VANG SHORT-TERM BOND INDEX ADM 0.07%
VMVAX VANG MID-CAP VALUE INDEX ADMIRAL 0.07%
VIPIX VANG INFLATION-PROTECTED SECS 0.07%
VEMIX VANG EMERGING MKTS STOCK IDX INSTL 0.10%
VMIAX VANG MATERIALS INDEX ADMIRAL 0.10%
VGSNX VANG REAL ESTATE INDEX INSTITUTIONAL 0.10%
VTABX VANG TOTAL INTL BD IDX ADMIRAL 0.11%
VTINX VANG TARGET RETIREMENT INCOME INV 0.12%
VTWNX VANG TARGET RETIREMENT 2020 INV 0.13%
VFORX VANG TARGET RETIREMENT 2040 INV 0.14%
VTHRX VANG TARGET RETIREMENT 2030 INV 0.14%
VTTSX VANG TARGET RETIREMENT 2060 INV 0.15%
VFIFX VANG TARGET RETIREMENT 2050 INV 0.15%
VWIAX VANG WELLESLEY INCOME ADMIRAL 0.16%
How did I do? And many thanks!