Portfolio Review Request from a husband and wife

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Topic Author
AKBTX14
Posts: 73
Joined: Thu Oct 30, 2014 2:46 pm

Portfolio Review Request from a husband and wife

Post by AKBTX14 » Wed Dec 04, 2019 7:23 pm

Looking for recommendations on current portfolio. We are DIY and bargain shopper kind of couple, but kind of novice when it comes to funds and investments.

Age 52, Spouse 47.

Household present income $225K

Cash Savings $90K

Loans
Mortgage Balance $196K, (7.5 years remaining) House Market Value $600K, Mortgage $3,500/month (incl. insurance & property taxes), Property Taxes $12K/year, No state income tax. No plans to move.

Other Expenses
We will cash fund college expense of our youngest child in 2 years. One child's (graduating soon) college education was cash funded for the last 4 years. So, we will have about $30K-$35K/year cash savings for next 2 years for the current high schooler.

Social Security current estimated/month benefits (self and spouse combined)
At 67 $4,200
At 70 $5,300

Investments $703K $s 100%
VTIAX Vanguard Total Intl Stock Index Admiral $s 15.65%
VEXAX Vanguard Extended Market Index Admiral $s 13.80%
VBTLX Vanguard Total Bond Market Index Adm $s 27.88%
FUSVX Fidelity 500 Index $s 42.67%

The Fidelity 500 Index is from 403(B) at work. The company is small non-profit and the 403(b)-plan administrator’s Asset Based charges are 0.80% - $8 per $1,000.

Are these charges really high? Listed below are the current investment options in 403(b) plan.

Thanks for your review and recommendations!

Asset Allocation
Putnam Dynamic Asset Allocation Cnsrv R6 PCCEX - 0.64%
Putnam Dynamic Asset Allocation Bal R6 PAAEX - 0.62%
TIAA-CREF Lifecycle Index Ret Inc Instl TRILX - 0.70%
TIAA-CREF Lifecycle Index 2020 Instl TLWIX - 0.28%
TIAA-CREF Lifecycle Index 2025 Instl TLQIX – 0.21%
TIAA-CREF Lifecycle Index 2030 Instl TLHIX – 0.20%
TIAA-CREF Lifecycle Index 2035 Instl TLYIX – 0.19%
TIAA-CREF Lifecycle Index 2040 Instl TLZIX – 0.19%
TIAA-CREF Lifecycle Index 2045 Instl TLXIX – 0.19%
TIAA-CREF Lifecycle Index 2050 Instl TLLIX – 0.19%
TIAA-CREF Lifecycle Index 2055 Instl TTIIX – 0.22%
TIAA-CREF Lifecycle Index 2060 Instl TVIIX – 0.33%
International funds
MFS International Intrinsic Value R6 MINJX – 0.63%
Invesco Oppenheimer Developing Mkts R6 ODVIX – 0.85%
Invesco Oppenheimer Intl Sml-Mid Com R6 OSCIX – 0.94%
Specialty
DFA Global Real Estate Securities Port DFGEX – 0.35%
Vanguard Energy Index Admiral VENAX -0.10%
Small Cap Funds
Fidelity® Small Cap Index FSSNX - 0.03%
Invesco Small Cap Growth R6 GTSFX – 0.71%
Mid Cap Funds
Fidelity® Mid Cap Index FSMDX - 0.03%
Great-West T. Rowe Price Mid Cp Gr Instl MXYKX – 0.67%
Victory Sycamore Established Value R6 VEVRX – 0.57%
Large Cap Funds
Fidelity® 500 Index FXAIX – 0.02%
Franklin Growth R6 FIFRX – 0.48%
Invesco Diversified Dividend R6 LCEFX – 0.43%
Putnam Equity Income R6 PEQSX – 0.55%
Bond Funds
American Funds Mortgage R6 RMAGX - 0.29%
Lord Abbett Short Duration Income R6 LDLVX – 0.32%
PIMCO Income Instl PIMIX – 1.05%
Pioneer Bond K PBFKX – 0.35%

retired@50
Posts: 628
Joined: Tue Oct 01, 2019 2:36 pm

Re: Portfolio Review Request from a husband and wife

Post by retired@50 » Wed Dec 04, 2019 7:38 pm

AKBTX14 wrote:
Wed Dec 04, 2019 7:23 pm
Looking for recommendations on current portfolio. We are DIY and bargain shopper kind of couple, but kind of novice when it comes to funds and investments.

Age 52, Spouse 47.

Household present income $225K

Cash Savings $90K

Investments $701K $s 100%
VTIAX Vanguard Total Intl Stock Index Admiral $s 5.71%
VEXAX Vanguard Extended Market Index Admiral $s 13.69%
VBTLX Vanguard Total Bond Market Index Adm $s 27.96%
VTIAX Vanguard Total Intl Stock Index Admiral $s 9.84%
FUSVX Fidelity 500 Index $s 42.8%

The Fidelity 500 Index is from 403(B) at work. The company is small non-profit and the 403(b)-plan administrator’s Asset Based charges are 0.80% - $8 per $1,000.

Are these charges really high? Listed below are the current investment options in 403(b) plan.

Thanks for your review and recommendations!


Small Cap Funds
Fidelity® Small Cap Index FSSNX - 0.03%

Mid Cap Funds
Fidelity® Mid Cap Index FSMDX - 0.03%

Large Cap Funds
Fidelity® 500 Index FXAIX – 0.02%

Bond Funds
Pioneer Bond K PBFKX – 0.35%
Of the $701K, is all of it contained in the 403b plan or just the Fidelity 500 index?

The .80% fee from the 403b plan is very high. I'd speak to management or something, you're getting creamed by this fee.

I've left the only options I'd consider using in the 403b listing above. I'm not in love with the bond fund, but if you have no other choice...???

Regards,

Ferdinand2014
Posts: 836
Joined: Mon Dec 17, 2018 6:49 pm

Re: Portfolio Review Request from a husband and wife

Post by Ferdinand2014 » Wed Dec 04, 2019 7:43 pm

AKBTX14 wrote:
Wed Dec 04, 2019 7:23 pm
Looking for recommendations on current portfolio. We are DIY and bargain shopper kind of couple, but kind of novice when it comes to funds and investments.

Age 52, Spouse 47.

Household present income $225K

Cash Savings $90K

Loans
Mortgage Balance $196K, (7.5 years remaining) House Market Value $600K, Mortgage $3,500/month (incl. insurance & property taxes), Property Taxes $12K/year, No state income tax. No plans to move.

Other Expenses
We will cash fund college expense of our youngest child in 2 years. One child's (graduating soon) college education was cash funded for the last 4 years. So, we will have about $30K-$35K/year cash savings for next 2 years for the current high schooler.

Social Security current estimated/month benefits (self and spouse combined)
At 67 $4,200
At 70 $5,300

Investments $703K $s 100%
VTIAX Vanguard Total Intl Stock Index Admiral $s 15.65%
VEXAX Vanguard Extended Market Index Admiral $s 13.80%
VBTLX Vanguard Total Bond Market Index Adm $s 27.88%
FUSVX Fidelity 500 Index $s 42.67%

The Fidelity 500 Index is from 403(B) at work. The company is small non-profit and the 403(b)-plan administrator’s Asset Based charges are 0.80% - $8 per $1,000.

Are these charges really high? Listed below are the current investment options in 403(b) plan.

Thanks for your review and recommendations!

Asset Allocation
Putnam Dynamic Asset Allocation Cnsrv R6 PCCEX - 0.64%
Putnam Dynamic Asset Allocation Bal R6 PAAEX - 0.62%
TIAA-CREF Lifecycle Index Ret Inc Instl TRILX - 0.70%
TIAA-CREF Lifecycle Index 2020 Instl TLWIX - 0.28%
TIAA-CREF Lifecycle Index 2025 Instl TLQIX – 0.21%
TIAA-CREF Lifecycle Index 2030 Instl TLHIX – 0.20%
TIAA-CREF Lifecycle Index 2035 Instl TLYIX – 0.19%
TIAA-CREF Lifecycle Index 2040 Instl TLZIX – 0.19%
TIAA-CREF Lifecycle Index 2045 Instl TLXIX – 0.19%
TIAA-CREF Lifecycle Index 2050 Instl TLLIX – 0.19%
TIAA-CREF Lifecycle Index 2055 Instl TTIIX – 0.22%
TIAA-CREF Lifecycle Index 2060 Instl TVIIX – 0.33%
International funds
MFS International Intrinsic Value R6 MINJX – 0.63%
Invesco Oppenheimer Developing Mkts R6 ODVIX – 0.85%
Invesco Oppenheimer Intl Sml-Mid Com R6 OSCIX – 0.94%
Specialty
DFA Global Real Estate Securities Port DFGEX – 0.35%
Vanguard Energy Index Admiral VENAX -0.10%
Small Cap Funds
Fidelity® Small Cap Index FSSNX - 0.03%
Invesco Small Cap Growth R6 GTSFX – 0.71%
Mid Cap Funds
Fidelity® Mid Cap Index FSMDX - 0.03%
Great-West T. Rowe Price Mid Cp Gr Instl MXYKX – 0.67%
Victory Sycamore Established Value R6 VEVRX – 0.57%
Large Cap Funds
Fidelity® 500 Index FXAIX – 0.02%
Franklin Growth R6 FIFRX – 0.48%
Invesco Diversified Dividend R6 LCEFX – 0.43%
Putnam Equity Income R6 PEQSX – 0.55%
Bond Funds
American Funds Mortgage R6 RMAGX - 0.29%
Lord Abbett Short Duration Income R6 LDLVX – 0.32%
PIMCO Income Instl PIMIX – 1.05%
Pioneer Bond K PBFKX – 0.35%
FUSVX is an old sub-class fund of Fidelity 500 index. All classes have been consolidated into FXAIX Er 0.015 which You list in your 403b plan. Excellent low cost S&P 500 index fund. It can be used as a core holding or the total of a 2 or 3 fund U.S. market holding. I assume when you say FUSVX you mean FXAIX?
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

Topic Author
AKBTX14
Posts: 73
Joined: Thu Oct 30, 2014 2:46 pm

Re: Portfolio Review Request from a husband and wife

Post by AKBTX14 » Wed Dec 04, 2019 7:58 pm

retired@50 wrote:
Wed Dec 04, 2019 7:38 pm
AKBTX14 wrote:
Wed Dec 04, 2019 7:23 pm
Of the $701K, is all of it contained in the 403b plan or just the Fidelity 500 index?

The .80% fee from the 403b plan is very high. I'd speak to management or something, you're getting creamed by this fee.

I've left the only options I'd consider using in the 403b listing above. I'm not in love with the bond fund, but if you have no other choice...???

Regards,
$701K is into Rollover and Traditional IRAs at Vanguard and 403(b) combined. I have listed the percentages. About $300K is in 403(b).

I can select different funds at Vanguard.

I will let spouse know about high 403(b) fees, but I doubt if the small company management will do anything.

How much the fee should be?
Last edited by AKBTX14 on Wed Dec 04, 2019 8:05 pm, edited 1 time in total.

Topic Author
AKBTX14
Posts: 73
Joined: Thu Oct 30, 2014 2:46 pm

Re: Portfolio Review Request from a husband and wife

Post by AKBTX14 » Wed Dec 04, 2019 7:59 pm

Ferdinand2014 wrote:
Wed Dec 04, 2019 7:43 pm
AKBTX14 wrote:
Wed Dec 04, 2019 7:23 pm
FUSVX is an old sub-class fund of Fidelity 500 index. All classes have been consolidated into FXAIX Er 0.015 which You list in your 403b plan. Excellent low cost S&P 500 index fund. It can be used as a core holding or the total of a 2 or 3 fund U.S. market holding. I assume when you say FUSVX you mean FXAIX?
Yes It should be FXAIX, my error.

retired@50
Posts: 628
Joined: Tue Oct 01, 2019 2:36 pm

Re: Portfolio Review Request from a husband and wife

Post by retired@50 » Wed Dec 04, 2019 8:21 pm

AKBTX14 wrote:
Wed Dec 04, 2019 7:58 pm
retired@50 wrote:
Wed Dec 04, 2019 7:38 pm
AKBTX14 wrote:
Wed Dec 04, 2019 7:23 pm
Of the $701K, is all of it contained in the 403b plan or just the Fidelity 500 index?

The .80% fee from the 403b plan is very high. I'd speak to management or something, you're getting creamed by this fee.

I've left the only options I'd consider using in the 403b listing above. I'm not in love with the bond fund, but if you have no other choice...???

Regards,
$701K is into Rollover and Traditional IRAs at Vanguard and 403(b) combined. I have listed the percentages. About $300K is in 403(b).

I can select different funds at Vanguard.

I will let spouse know about high 403(b) fees, but I doubt if the small company management will do anything.

How much the fee should be?
I'm not certain what a competitive fee would be for a small 403b plan, but it probably wouldn't take too much research to find out. I consider the workload of the plan administrator. What do they do, they keep records, they mail statements, they run a web site... That's not nothing, but is it worth 40 times what you're paying to Fidelity to manage your S&P 500 fund...??? .02% x 40 = .80%

It's too bad to read that you don't think management will do anything about it. :( They are hurting their employees, making a secure retirement a more difficult goal to reach, and enriching the plan custodian (whoever that is) by paying a high fee. Someone needs to put on their thinking cap and find out what's fair, then put on their negotiating hat and DO something about it. My 2 cents. Sorry for the rant.

Edit: lacking any better ideas, I'd check with Vanguard to see if they would handle the custodial duties of the 403b plan.

Regards,

HomeStretch
Posts: 2894
Joined: Thu Dec 27, 2018 3:06 pm

Re: Portfolio Review Request from a husband and wife

Post by HomeStretch » Wed Dec 04, 2019 8:35 pm

Your 403b fund is the best choice under the circumstances. The 0.8% administrative fee is high. It’s too bad your company chose to pass it on to the employees rather than pay some or all of it. Try lobbying for a better plan if possible. For small companies with low plan assets, that fee is not unheard of. My spouse’s 401k plan has a 0.75% administrative fee.

Your asset allocation and fund choices in your 403b and IRAs are reasonable.

Consider contributing to a Roth IRA if you and/or spouse can. If your income is too high for a direct contribution, use a backdoor Roth (as long as you or spouse do not have a Traditional IRA which would make the conversion subject to the pro rata rule).

Topic Author
AKBTX14
Posts: 73
Joined: Thu Oct 30, 2014 2:46 pm

Re: Portfolio Review Request from a husband and wife

Post by AKBTX14 » Wed Dec 04, 2019 8:56 pm

HomeStretch wrote:
Wed Dec 04, 2019 8:35 pm
Your 403b fund is the best choice under the circumstances. The 0.8% administrative fee is high. It’s too bad your company chose to pass it on to the employees rather than pay some or all of it. Try lobbying for a better plan if possible. For small companies with low plan assets, that fee is not unheard of. My spouse’s 401k plan has a 0.75% administrative fee.

Your asset allocation and fund choices in your 403b and IRAs are reasonable.

Consider contributing to a Roth IRA if you and/or spouse can. If your income is too high for a direct contribution, use a backdoor Roth (as long as you or spouse do not have a Traditional IRA which would make the conversion subject to the pro rata rule).
The earlier plan administrator had no decent funds to invest. Health insurance through spouse work is expensive too (about $11.5/yr for family of 4). They are going to contribute in 403(b) at end of 2019 ( but don't know how much). The company puts $2.5K/yr in HSA. However considering all other things incl. hours/traffic etc., wife has been with them for last 10 years.

Yes we have traditional IRA at Vanguard.

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