Portfolio Assistance

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robsteveum
Posts: 1
Joined: Fri May 22, 2020 2:40 pm

Portfolio Assistance

Post by robsteveum » Fri May 22, 2020 2:43 pm

Hi Gang,

My wife and I are starting the process of taking over all of our investments. It has been recommended that we post things in the following format to get the most complete advice. Thanks in advance to those of you who read this whole thing.

Questions:
1. We feel like we have a reasonable asset allocation goal. We have some concerns about asset location and where we should move forward with funds to invest in our taxable account. Do we move more in our 401K’s to bonds, and then have more of the taxable in a Total Stock Market Index Fund?

2. Her Funds are not great for her Simple IRA. This is a new retirement account for her work and fairly small. It will grow with addition, but figure leaving it in the American Balanced Portfolio makes sense with the expense ratio.

3. The three American Accounts were from her father, from an aunt. There is no record of the cost basis that we have access to (and thus any step up). We are holding onto those funds simply to avoid a taxable event. We have moved all the dividends to go to the settlement account rather than reinvest. We figure we will look at that quarterly and see where it makes sense to move those funds. Does that seem like a reasonable strategy?

Emergency funds:
Between Vanguard Taxable Settlement Fund, Long Term Savings, and Sinking Fund Checking we have 5 months of living expenses as an emergency fund

Debt:
$382,000 3.66% 15 fixed year loan on primary residence Refinanced May of 2020
$7,200 Student Loan currently at COVID-19 0% locked in at 2.66% after

Tax Filing Status: (Married Filing Jointly)

Tax Rate: 24% Federal, 4.25% State

State of Residence: Michigan

Age: 43

Desired Asset allocation:
40% US Stocks
20% International Stocks
10% REITS
30% Bonds

Current Asset Based on Morningstar Prospectus :
35.31% US Stocks
16.54% International Stocks
12.88% REITS
26.74% Bonds
1.64% Other
6.88% Cash for Investing


We have a portfolio of around $950,000.

Current retirement assets

His active 401K at AXA
8.76% Vanguard VIF Total Stock Market Index (VVATSMV) 0.13%
13.14% Vanguard VIF Total Bond Market Index (VVATBMV) 0.14%

His non active 403B at TIAA-CREF
0.96% TIAA-CREF Small-Cap Blend Index Fund (Institutional) (TISBX) / 0.06%
0.96% Vanguard Total International Stock Index Fund Institutional (VTSNX) /0.08%
0.99% Vanguard Total Bond Market Index Fund Institutional (VBTIX)/ 0.04%

Her non active 403b at Fidelity
15.27% Vanguard Institutional Index Instl Pl (VIIIX) /0.02%
13.56% Vanguard Total Intl Stock Index I (VTSNX) /0.08%
12.26% Vanguard Total Bond Market Idx InstlPls (VBMPX) /0.03%

His Roth IRA at Vanguard
8.85% Vanguard Real Estate Index Fund Admiral Shares (VGSLX) / 0.12%

Her Roth IRA at Vanguard
4.03% Vanguard Real Estate Index Fund Admiral Shares (VGSLX) / 0.12%

Her SIMPLE IRA at Capitol Group
0.90% American Balanced Fund (ABALX) / 0.59%

Joint Taxable at Vanguard
6.88% cash (for investing – not including emergency funds)
4.91% American Funds American Mutual F2 (AMRFX) 0.39%
6.65% American Funds Invmt Co of Amer F2 (ICAFX) 0.38%
1.87% American Funds The Growth Fund of America® Class F-2 (GFFFX) 0.41%

_______________________________________________________________
Note: Total percentage of all the above accounts together add up to 99.8% due to spreadsheet rounding.


New annual Contributions
$19,000 withheld and about $4500 in matching contributions his AXA 401K
$6,000 his Roth IRA
$13,500 her IRA about $2,000 in matching contributions
$9,100 taxable (for retirement, not short term goals)

Available funds : I have bolded the ones that I am currently in where applicable

Funds available is his 401K at AXA

Large Cap Growth
EQ/Large Cap Growth Managed Volatility (0P00003CPC) 0.61%
EQ/T.Rowe Price Growth Stock(0P00008N5E) 0.75%
EQ/ClearBridge Large Cap Growth (0P00003E3A) 1.04%
EQ/Large Cap Growth Index(0P00003CBW) 0.48%

Large Cap Blend
EQ/Equity 500 Index Fund (PREIX) 0.33%
Vanguard VIF Total Stock Market Index (VVATSMV) 0.13%

Large Cap Value
1290 VT Equity Income (0P00003ETT) 0.70%
EQ/Invesco Comstock (0P00003EON) 0.75%
EQ/JP Morgan Value Opportunities (FVUSA000SF) 0.73%
EQ/Large Cap Value Managed Volatility (0P00003E2G) 0.60%

Mid Cap Growth
EQ/Janus Enterprise (FVUSA04B5R) 0.80%

Mid Cap Value
EQ/Mid Cap Value Managed Volatility (0P00003E32) 0.71%

Small Cap Growth
EQ/AB Small Cap Growth (0P00003CXL) 0.67%

Small Cap Blend
EQ/Mid Cap Index (0P00003E30) 0.47%
EQ/Small Company Index (0P00003E36) 0.39%

Small Cap Value
1290 VT GAMCO Small Company Value(0P00008N56) 0.82%

International/Global
EQ/International Core Managed Volatility (0P00003E37) 0.81%
EQ/Templeton Global Equity Managed Volatility (VLTGRRV) 0.85%
EQ/Global Equity Managed Volatility (0P0000659N) 0.85%
EQ/MFS International Growth (0P00008N5C) 0.90%

Bonds
Multimanager Core Bond (FVUSA04ACE) 0.71%
EQ Bond Index Portfolio (0P00003E33) 0.42%
Charter Multi Sector Bond Portfolio (0P00003BLM)0.85%
Vanguard VIF Total Bond Market Index (VVATBMV) 0.14%
EQ/PIMCO Global Real Return/1.29%

Funds available in his 403(b) at TIAA-CREF

Equities
TIAA-CREF Emerging Markets Equity Fund - Institutional Class /TEMLX/0.90%
TIAA-CREF Emerging Markets Equity Index Fund (TEQLX) 0.20%/
TIAA-CREF Equity Index Fund (Institutional) (TIEIX) 0.05%
TIAA-CREF Growth & Income Fund (Institutional)/TIGRX 0.41%/
TIAA-CREF International Equity Fund (Institutional)/ TIIEX/0.48%
TIAA-CREF International Equity Index Fund (Institutional)/ TCIEX/0.06%
TIAA-CREF Large-Cap Growth Fund (Institutional)/ TILGX/0.42%
TIAA-CREF Large-Cap Growth Index Fund (Institutional)/ TILIX/0.05%
TIAA-CREF Large-Cap Value Fund (Institutional)/ TRLIX/0.41%
TIAA-CREF Large-Cap Value Index Fund (Institutional) TILVX/0.05%
TIAA-CREF Mid-Cap Growth Fund (Institutional) TRPWX/0.48%
TIAA-CREF Mid-Cap Value Fund (Institutional) TIMVX/0.44%
TIAA-CREF Quant Small-Cap Equity Fund (Institutional) TISEX/0.42%
TIAA-CREF Real Estate Securities Fund (Institutional) TIREX/0.51%
TIAA-CREF S&P 500 Index Fund (Institutional) TISPX/0.05%
TIAA-CREF Small-Cap Blend Index Fund (Institutional) TISBX/ 0.06%
TIAA-CREF Social Choice Equity Fund (Institutional) TISCX/ 0.17%
Vanguard Emerging Markets Stock Index Fund Institutional VEMIX/0.10%
Vanguard European Stock Index Fund Institutional VESIX/0.08%
Vanguard Institutional Index Fund Institutional Plus VIIIX/0.02%
Vanguard Pacific Stock Index Fund Institutional VPKIX/0.08%
Vanguard Real Estate Index Institutional VGSNX/0.10%
Vanguard Total International Stock Index Fund Institutional/VTSNX/0.08%
Vanguard Total Stock Market Index Fund Institutional Plus VSMPX/0.02%

Fixed Income

CREF Bond Market Account (R3) QCBMIX/0.26%
CREF Inflation-Linked Bond Account (R3) QCILIX/0.23%
TIAA-CREF Core Bond Fund (Institutional) TIBDX/0.30%
TIAA-CREF Core Plus Bond Fund (Institutional) TIBFX/0.30%
TIAA-CREF Core Impact Bond Fund (Institutional) TSBIX/0.37%
TIAA-CREF High-Yield Fund (Institutional) TIHYX/0.36%
TIAA-CREF Inflation-Linked Bond Fund (Institutional) TIILX/0.26%
TIAA-CREF Short-Term Bond Fund (Institutional) TISIX/ 0.27%
Vanguard Inflation Protected Securities Fund Institutional VIPIX/0.07%
Vanguard Intermediate-Term Treasury Fund Admiral VFIUX/0.10%
Vanguard Long-Term Treasury Fund Admiral VUSUX/ 0.10%
Vanguard Short-Term Treasury Fund Admiral VFIRX/ 0.10%
Vanguard Total Bond Market Index Fund Institutional VBTIX/ 0.04%

Funds available in her simple Capital Group simple IRA

Growth

AMCAP Fund ® AMCPX/0.69%
American Funds Global Insight Fund SM AGVFX/ 0.99%
American Funds International Vantage Fund SM AIVBX/ 1.08%
EuroPacific Growth Fund ® AEPGX/ 0.83%
The Growth Fund of America ® AGTHX/ 0.65%
The New Economy Fund ® ANEFX/ 0.80%
New Perspective Fund ® ANWPX/ 0.76%
New World Fund ® NEWFX/ 1.03%
SMALLCAP World Fund ® SMCWX/ 1.08%

Growth and Income
American Funds Developing World Growth and Income Fund SM DWGAX/ 1.30%
American Mutual Fund ® AMRMX/ 0.61%
Capital World Growth and Income Fund ® CWGIX/ 0.78%
Fundamental Investors ® ANCFX /0.62%
International Growth and Income Fund SM IGAAX /0.93%
The Investment Company of America AIVSX / 0.59%
Washington Mutual Investors Fund AWSHX /0.59%

Equity-Income
Capital Income Builder ® CAIBX/ 0.61%
The Income Fund of America ® AMECX/ 0.58%

Balanced
American Balanced Fund ® ABALX/ 0.59%
American Funds Global Balanced Fund SM GBLAX/ 0.84%

Bond Fund
American Funds Corporate Bond Fund ® BFCAX/ 0.86%
American Funds Emerging Markets Bond Fund ® EBNAX / 1.01%
American Funds Inflation Linked Bond Fund ® BFIAX / 0.73%
American Funds Mortgage Fund ® MFAAX / 0.71%
American Funds Multi-Sector Income Fund SM / 0.91%
American Funds Strategic Bond Fund SM ANBAX / 0.92%
American High-Income Trust ® AHITX / 0.73%
The Bond Fund of America ® ABNDX / 0.61%
Capital World Bond Fund ® CWBFX / 0.95%
Intermediate Bond Fund of America ® AIBAX / 0.64%
Short-Term Bond Fund of America ® ASBAX / 0.71%
U.S. Government Securities Fund ® AMUSX / 0.67%

Tax Exempt Bond Fund
American Funds Short-Term Tax-Exempt Bond Fund ® ASTEX / 0.59%
American Funds Tax-Exempt Fund of New York ® NYAAX / 0.64%
American High-Income Municipal Bond Fund ® AMHIX / 0.70%
Limited Term Tax-Exempt Bond Fund of America ® LTEBX / 0.62%
The Tax-Exempt Bond Fund of America ® AFTEX / 0.54%
The Tax-Exempt Fund of California ® TAFTX /0.61%

Funds available in her 403(b) at Fidelity

Large Cap
Vanguard FTSE Social Index I/VFTNX/ 0.12%
Vanguard Institutional Index Instl Pl/VIIIX/0.02%
Loomis Sayles Growth A/LGRRX/0.91%
Diamond Hill Large Cap A/DHLAX/0.96%

Mid Cap
Vanguard Mid Cap Index InstitutionalPlus/VMCPX/0.03%

Small Cap
Vanguard Small Cap Index InstlPlus/VSCPX/0.03%
Columbia Small Cap Value II Inst/NSVAX/1.04%
Franklin Small Cap Growth R6/FSMLX/0.65%

International
Vanguard Total Intl Stock Index I/VTSNX/0.08%
American Funds Europacific Growth R6/RERHX/0.62%

Bond Stable Value
Lincoln Stable Value/0.10%

Bond Income
BNY Mellon Global Fixed Income/SDGIX/0.51%
Vanguard Total Bond Market Idx InstlPls/VBMPX/0.03%
Metropolitan West Total Return Bd Admin
MWTNX/0.78%

Short Term Investments
Vanguard Treasury Money Market/VUSXX/0.09%

retired@50
Posts: 2591
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Portfolio Assistance

Post by retired@50 » Fri May 22, 2020 3:19 pm

robsteveum wrote:
Fri May 22, 2020 2:43 pm
Hi Gang,

My wife and I are starting the process of taking over all of our investments. It has been recommended that we post things in the following format to get the most complete advice. Thanks in advance to those of you who read this whole thing.

Questions:
1. We feel like we have a reasonable asset allocation goal. We have some concerns about asset location and where we should move forward with funds to invest in our taxable account. Do we move more in our 401K’s to bonds, and then have more of the taxable in a Total Stock Market Index Fund?

2. Her Funds are not great for her Simple IRA. This is a new retirement account for her work and fairly small. It will grow with addition, but figure leaving it in the American Balanced Portfolio makes sense with the expense ratio.

3. The three American Accounts were from her father, from an aunt. There is no record of the cost basis that we have access to (and thus any step up). We are holding onto those funds simply to avoid a taxable event. We have moved all the dividends to go to the settlement account rather than reinvest. We figure we will look at that quarterly and see where it makes sense to move those funds. Does that seem like a reasonable strategy?
1. For asset location, you should read the wiki page, Tax Efficient Fund Placement. See link.
https://www.bogleheads.org/wiki/Tax-eff ... _placement

2. I agree, not great choices, and you've found the best one.

3. With regard to cost basis on inherited account(s). The date of death is typically the price you can assume to be your new cost basis (often called a stepped up basis). Look up historical price data at the website of the fund(s) in question, or you can use Yahoo Finance. There is sometimes an exception to the date of death rule where the estate executor can choose a date 6 months after the date of death. This may not be all that common, but you could check with the executor. Knowing the basis will allow you to compute your tax liability when you decide to sell.

Regards,
This is one person's opinion. Nothing more.

User avatar
patrick013
Posts: 2889
Joined: Mon Jul 13, 2015 7:49 pm

Re: Portfolio Assistance

Post by patrick013 » Fri May 22, 2020 3:57 pm

age in bonds, buy-and-hold, 10 year business cycle

HomeStretch
Posts: 4358
Joined: Thu Dec 27, 2018 3:06 pm

Re: Portfolio Assistance

Post by HomeStretch » Fri May 22, 2020 4:27 pm

Welcome to the forum!
robsteveum wrote:
Fri May 22, 2020 2:43 pm
...
Joint Taxable at Vanguard
...
4.91% American Funds American Mutual F2 (AMRFX) 0.39%
6.65% American Funds Invmt Co of Amer F2 (ICAFX) 0.38%
1.87% American Funds The Growth Fund of America® Class F-2 (GFFFX) 0.41
...
Agree with retired@50’s suggestion to try to figure out the cost basis for these 3 funds. In the meantime, turn off dividend reinvestment (if it’s on) to avoid buying more.

bryansmile
Posts: 262
Joined: Wed Feb 12, 2014 10:14 am

Re: Portfolio Assistance

Post by bryansmile » Fri May 22, 2020 11:07 pm

For simplicity and lower cost, I would just get all bond allocation in her Fido 403b, VG Total Bond Market, 30% of total portfolio, with the rest in international stock; and just VG Total Stock market in his AXA 401k, 22% of total. The rest of your portfolio has excellent choices and is pretty easy to figure out.

krow36
Posts: 2283
Joined: Fri Jan 30, 2015 6:05 pm
Location: WA

Re: Portfolio Assistance

Post by krow36 » Sat May 23, 2020 12:21 am

The AF Balanced Portfolio ABALX has a front-end load of 5.75% as do most AF funds. That as well as the higher ER makes it worthwhile to SERIOSLY consider a workaround that IRS allows.
If her SIMPLE IRA a Form 5305, she can contribute to an AF no-load MM and transfer the balance periodically (monthly?) to a transfer SIMPLE IRA account at Vanguard. The Vanguard "frozen" account cannot receive contributions directly from the employer, only from the AF SIMPLE IRA account. Here’s the form that AF uses to set up that transfer. https://www.capitalgroup.com/advisor/li ... ?lit=56001

If her plan is a Form 5304 SIMPLE IRA, then she is able to select the financial institution (FI). In other words if she chooses Vanguard, then the employer will send the contributions directly to her SIMPLE IRA Vanguard account. The FI selection is done in the month prior to the Election Period, Nov 2 to Dec 31 each year, and would be in effect for the following year(s). Here’s a relevant thread: viewtopic.php?f=1&t=262892

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