After reviewing a lot of the guidance and information provided to other folks in similar and dissimilar situations, I have swiftly realized that my portfolio is not only all over the place, but has also missed out on many years of potentially better growth because of the lack of focus and thought put into the overall asset allocation.
As I have gone from job to job and moved through various phases of life, I have accumulated different collections of funds and stocks at different places and have never really thought of it collectively as the retirement portfolio. Due to the organic accumulation, the overall picture is a mess and I am working actively to clean this up, simplify and move towards a three/four fund portfolio.
You might be able to tell from the current retirements asset picture below, as to which allocations were done before/after I became aware of the Bogleheads forum and the guidance provided here.
Thanks a lot in advance for your review and insight.
Emergency funds: Yes, eight months of expenses
Debt: Yes, remaining mortgage of $280K at 4% (I have been putting in ~$1K extra as additional principal each month to pay it off faster).
Tax Filing Status: MFJ (with one child)
Tax Rate: 24% Federal
State of Residence: WA
Desired Asset allocation: 55% domestic stocks / 25% international stocks / 20% bonds
Current size of portfolio is low six-figures
Proposed Desired Asset Allocation (using existing funds in retirement portfolio)
- Traditional IRA - 7% of overall portfolio - VTSAX - Vanguard Total Stock Market Index (.08)
- Roth IRA - 4% - VTSAX - Vanguard Total Stock Market Index (.08)
- HSA - 10% - FFOPX - Fidelity Freedom Index 2050 Inst Prem (.08)
- 401k (Employer 1) - 16% - FFOPX - Fidelity Freedom Index 2050 Inst Prem (.08)
- 401k (Employer 2) - 49% - VTSAX (40%) | VTIAX (35%) | VBTLX (25%)
- Taxable Brokerage - 11% - VTSAX - Vanguard Total Stock Market Index (.08)
- Taxable Brokerage - 3% - Collection of Individual Stocks (since this is only 3%, I'll just let it be for now)
Current retirement assets
- 11% Vanguard Total Stock Market Index (VTSAX) (0.08)
- Individual stocks - not listing these out individually since they comprise only 3% of the overall portfolio
- 7% Vanguard Institutional 500 Index Trust (VFFSX) (.01)
- 6% Vanguard Mid Cap Index Fund (VMCPX) (.03)
- 3% Vanguard Inst Total International Stk Mkt Index Trust (.08)
- 0.1% PIMCO Total Return Fund (PTTRX) (.71)
- 12% FIAM Index Target Date 2045 Commingled Pool (.07)
- 10% DFA US Small Cap I (DFSTX) (.35)
- 9% AllianzGI Technology Institutional (DRGTX) (1.21)
- 7% FIAM Index Target Date 2050 Commingled Pool (.07)
- 2% FIAM Index Target Date 2065 Commingled Pool (.07)
- 2% FIAM Index Target Date 2060 Commingled Pool (.07)
- 2% FIAM Index Target Date 2055 Commingled Pool (.07)
- 2% FIAM Index Target Date 2030 Commingled Pool (.07)
- 2% Fidelity Total Bond Fund (FTFBX) (.45)
- 2% Vanguard Total Intl Stock Index I (VTSNX) (0.08)
- 0.9% FIAM Index Target Date 2015 Commingled Pool (.07)
- 4% Vanguard Total Stock Market Index (VTSAX) (0.08)
- 6% American Century Strategic Allocation Aggressive Class A (ACVAX) (1.13)
- 1% American Funds Fundamental Invs F1 (AFIFX) (.65)
- 1% American Funds Capital Income Builder F1 (CIBFX) (.65)
- 10% Fidelity Freedom Index 2050 Inst Prem (FFOPX) (.08)
New annual Contributions
- $19.5K to 401k (employer matches up to 3%), at the very least, will look to put in more into the 401k Roth if possible
- Up to $6K to Roth IRA (will depend on AGI for the year) / or $12K (depending on answer to question below)
- $40K taxable (to be dedicated towards retirement accounts, not short term goals)
1. I am requesting some guidance and insight on whether the cleaned-up proposed reallocation makes sound sense from your perspective and/or changes/tweaks I should consider. I am looking to get this revised reallocation in place step-by-step by account over the next several months.
2. If I am MFJ, and my income for the year does not allow me to fund a Roth IRA this year, does the same restriction apply to my non-working spouse as well? In other words, which of the below scenarios hold true?
(a) Neither of us can contribute anything to the Roth IRA this year, or
(b) I can fund $0 out of a possible $6000 for my Roth IRA, but spouse can put $6000 in for the spousal Roth IRA?