Portfolio review request - thank you!

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Topic Author
DCBogler
Posts: 32
Joined: Fri May 20, 2022 10:29 am

Portfolio review request - thank you!

Post by DCBogler »

Hi, I am fairly new to the community and wanted to post my retirement portfolio here for feedback. I have been saving for a number of years but haven't ever taken a holistic look at it, and am not really sure how to do that. Thank you for taking a look!

Specific questions I have:

1) How can I consolidate/simplify these accounts, and is this a good time to do that?
2) I would like to retire at 60 -- any thoughts on how I can make that happen?

Thanks very much!


Emergency funds: 21K, in checking/savings accounts

Debt: Mortgage: 333K, 19 years left on 20-year loan (refinanced last year), 2.5 percent interest rate; houses like mine currently selling for ~600K

Tax Filing Status: Head of Household, divorced, two teenage children (their college accounts are not included below)

Tax Rate: Federal 22%, VA 5.75%

State of Residence: VA

Age: 51

Desired Asset allocation: 50% stocks / 50% bonds
Desired International allocation: 10% of stocks

Total portfolio worth ~500K

Current retirement assets:

401k #1 (current employer, at Fidelity)
FFTHX FID FREEDOM 2035 3060.33 $42,722.21 (ER: .72)
FFTWX FID FREEDOM 2025 693.294 $9,005.89 (ER: .63)

401K #2 (old employer account, not rolled over)
VTTHX VANGUARD TARGET RET 2035 Trust ? $107,351 (ER: .45 - also has $75 annual maintenance fees)

Roth IRA (at Vanguard)
VSMAX Vanguard Small-Cap Index Fund Admiral Shares 211.592 $20,022.95 (ER: .05)

Rollover IRA (at Fidelity)
CORE** FDIC-INSURED DEPOSIT SWEEP 23049.98 $23,049.98 (ER: n/a)
FIHFX FIDELITY FREEDOM INDEX 2035 INVESTOR 1301.29 $26,520.29 (ER: .12)
FNSXX FIMM MMKT PORT INST CL 185.81 $185.81 (ER: n/a)
FXAIX FIDELITY 500 INDEX FUND 146.536 $21,202.29 (ER: .015)
VBTLX VANGUARD TOTAL BOND MARKET INDEX ADM 5243.67 $53,170.81 (ER: .05)
VTTHX VANGUARD TARGET RET 2035 FD INVESTOR CL 6197.636 $131,080.00 (ER: .08)
FDRXX** FIDELITY GOVERNMENT CASH RESERVES 379.29 $379.29 (ER: .08)
FTBFX FIDELITY TOTAL BOND 275.719 $2,759.94 (ER: .45)

SIMPLE IRA (at Vanguard)
VMFXX Vanguard Federal Money Market Fund 4272.4 $4272.40 (ER: .09)

Traditional IRA (at Ameritrade)
AKR Acadia Realty Stock Common Trust 98 $1,959.02 (ER: n/a)
VBTLX Vanguard Total Bond Market Index Fund Admiral 613.883 $6,224.77 (ER: .05)

New annual Contributions:
Current 401K - 10K, plus 5K employer match (total $15K)

Social Security estimates:
at 62 - $1827
at 65 - $2327
at 68 - $2745
at 70 - $3487

_______________________________________________________________________________________
Last edited by DCBogler on Sat May 28, 2022 9:07 pm, edited 3 times in total.
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retired@50
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Re: Portfolio review request - thank you!

Post by retired@50 »

DCBogler wrote: Sat May 28, 2022 7:42 pm Tax Rate: not sure how to calculate this

State of Residence: VA
For Federal, use this link: https://www.nerdwallet.com/article/taxe ... x-brackets
We're after the marginal tax rate. Get out your 2021 IRS Form 1040, look at line 15 and compare it to the table linked above. Possible answers are 12%, 22%, 24%, etc...

For Virginia, use this link: https://www.nerdwallet.com/article/taxe ... -state-tax
It's probably 5.75%.

Please edit your post by using the pencil icon once you've determined your state and Federal marginal tax brackets.

You may want to include the expense ratios of the different funds you're using as well. Very important. :happy

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Topic Author
DCBogler
Posts: 32
Joined: Fri May 20, 2022 10:29 am

Re: Portfolio review request - thank you!

Post by DCBogler »

retired@50 wrote: Sat May 28, 2022 7:48 pm
DCBogler wrote: Sat May 28, 2022 7:42 pm Tax Rate: not sure how to calculate this

State of Residence: VA
For Federal, use this link: https://www.nerdwallet.com/article/taxe ... x-brackets
We're after the marginal tax rate. Get out your 2021 IRS Form 1040, look at line 15 and compare it to the table linked above. Possible answers are 12%, 22%, 24%, etc...

For Virginia, use this link: https://www.nerdwallet.com/article/taxe ... -state-tax
It's probably 5.75%.

Please edit your post by using the pencil icon once you've determined your state and Federal marginal tax brackets.

You may want to include the expense ratios of the different funds you're using as well. Very important. :happy

Regards,
Thank you for the information, I just updated the tax information. I'm not sure how to find the expense ratios for the funds.
Vanguard User
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Re: Portfolio review request - thank you!

Post by Vanguard User »

What will be your annual expense in retirement?
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retired@50
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Re: Portfolio review request - thank you!

Post by retired@50 »

DCBogler wrote: Sat May 28, 2022 7:52 pm ... I'm not sure how to find the expense ratios for the funds.
You can look up each one by using the ticker symbol (5 letter code). For the 401k account, you'd want to use the 401k provider website, since sometimes a 401k plan will pay a different expense ratio than the published retail expense ratio.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Topic Author
DCBogler
Posts: 32
Joined: Fri May 20, 2022 10:29 am

Re: Portfolio review request - thank you!

Post by DCBogler »

Vanguard User wrote: Sat May 28, 2022 7:55 pm What will be your annual expense in retirement?
I'm thinking that as long as I have this mortgage, maybe $48k a year? Less after that. I need to stay in this house for six more years until youngest graduates from HS.
Vanguard User
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Re: Portfolio review request - thank you!

Post by Vanguard User »

DCBogler wrote: Sat May 28, 2022 8:06 pm
Vanguard User wrote: Sat May 28, 2022 7:55 pm What will be your annual expense in retirement?
I'm thinking that as long as I have this mortgage, maybe $48k a year? Less after that. I need to stay in this house for six more years until youngest graduates from HS.
Includes health insurance and cost?
Topic Author
DCBogler
Posts: 32
Joined: Fri May 20, 2022 10:29 am

Re: Portfolio review request - thank you!

Post by DCBogler »

Vanguard User wrote: Sat May 28, 2022 8:39 pm
DCBogler wrote: Sat May 28, 2022 8:06 pm
Vanguard User wrote: Sat May 28, 2022 7:55 pm What will be your annual expense in retirement?
I'm thinking that as long as I have this mortgage, maybe $48k a year? Less after that. I need to stay in this house for six more years until youngest graduates from HS.
Includes health insurance and cost?
I think so? I'm not sure where I will get health insurance for the five years between when I hope to retire (60) and when I can start Medicare. I don't have any health issues and historically/genetically my family has had very good health. I would probably get high-deductible coverage.
Topic Author
DCBogler
Posts: 32
Joined: Fri May 20, 2022 10:29 am

Re: Portfolio review request - thank you!

Post by DCBogler »

retired@50 wrote: Sat May 28, 2022 7:55 pm
DCBogler wrote: Sat May 28, 2022 7:52 pm ... I'm not sure how to find the expense ratios for the funds.
You can look up each one by using the ticker symbol (5 letter code). For the 401k account, you'd want to use the 401k provider website, since sometimes a 401k plan will pay a different expense ratio than the published retail expense ratio.

Regards,
Thanks! I just added all the expense ratios.
DIYtrixie
Posts: 380
Joined: Sun Sep 13, 2020 12:11 pm

Re: Portfolio review request - thank you!

Post by DIYtrixie »

DCBogler wrote: Sat May 28, 2022 9:08 pm
retired@50 wrote: Sat May 28, 2022 7:55 pm
DCBogler wrote: Sat May 28, 2022 7:52 pm ... I'm not sure how to find the expense ratios for the funds.
You can look up each one by using the ticker symbol (5 letter code). For the 401k account, you'd want to use the 401k provider website, since sometimes a 401k plan will pay a different expense ratio than the published retail expense ratio.

Regards,
Thanks! I just added all the expense ratios.
In your current 401k, I suggest swapping your Fidelity Freedom funds for the corresponding Fidelity Freedom INDEX funds, which will have lower expense ratios.

I also suggest getting a more concrete feeling for your expenses. That will be essential to determine if you are on track, or not.
Topic Author
DCBogler
Posts: 32
Joined: Fri May 20, 2022 10:29 am

Re: Portfolio review request - thank you!

Post by DCBogler »

DIYtrixie wrote: Sat May 28, 2022 9:42 pm
DCBogler wrote: Sat May 28, 2022 9:08 pm
retired@50 wrote: Sat May 28, 2022 7:55 pm
DCBogler wrote: Sat May 28, 2022 7:52 pm ... I'm not sure how to find the expense ratios for the funds.
You can look up each one by using the ticker symbol (5 letter code). For the 401k account, you'd want to use the 401k provider website, since sometimes a 401k plan will pay a different expense ratio than the published retail expense ratio.

Regards,
Thanks! I just added all the expense ratios.
In your current 401k, I suggest swapping your Fidelity Freedom funds for the corresponding Fidelity Freedom INDEX funds, which will have lower expense ratios.

I also suggest getting a more concrete feeling for your expenses. That will be essential to determine if you are on track, or not.
Thanks for your response. Unfortunately my current 401K doesn't offer the index option for the FF funds.

I think 4K would be a good monthly estimate. The kids should be out of the house and I won't have retirement saving, work expenses, kid expenses, etc. The one big expense is my mortgage/PP taxes. I would probably get a high-deductible health insurance policy from the marketplace.
Vanguard User
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Location: Sugar Land, Texas

Re: Portfolio review request - thank you!

Post by Vanguard User »

DCBogler wrote: Sat May 28, 2022 8:48 pm
Vanguard User wrote: Sat May 28, 2022 8:39 pm
DCBogler wrote: Sat May 28, 2022 8:06 pm
Vanguard User wrote: Sat May 28, 2022 7:55 pm What will be your annual expense in retirement?
I'm thinking that as long as I have this mortgage, maybe $48k a year? Less after that. I need to stay in this house for six more years until youngest graduates from HS.
Includes health insurance and cost?
I think so? I'm not sure where I will get health insurance for the five years between when I hope to retire (60) and when I can start Medicare. I don't have any health issues and historically/genetically my family has had very good health. I would probably get high-deductible coverage.
ACA unless state has better option?
Topic Author
DCBogler
Posts: 32
Joined: Fri May 20, 2022 10:29 am

Re: Portfolio review request - thank you!

Post by DCBogler »

Vanguard User wrote: Sat May 28, 2022 10:36 pm
DCBogler wrote: Sat May 28, 2022 8:48 pm
Vanguard User wrote: Sat May 28, 2022 8:39 pm
DCBogler wrote: Sat May 28, 2022 8:06 pm
Vanguard User wrote: Sat May 28, 2022 7:55 pm What will be your annual expense in retirement?
I'm thinking that as long as I have this mortgage, maybe $48k a year? Less after that. I need to stay in this house for six more years until youngest graduates from HS.
Includes health insurance and cost?
I think so? I'm not sure where I will get health insurance for the five years between when I hope to retire (60) and when I can start Medicare. I don't have any health issues and historically/genetically my family has had very good health. I would probably get high-deductible coverage.
ACA unless state has better option?
Yes, I think I would choose something from the ACA. Not sure what a minimal policy will cost in ten years.
Vanguard User
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Re: Portfolio review request - thank you!

Post by Vanguard User »

DCBogler wrote: Sun May 29, 2022 11:01 am
Vanguard User wrote: Sat May 28, 2022 10:36 pm
DCBogler wrote: Sat May 28, 2022 8:48 pm
Vanguard User wrote: Sat May 28, 2022 8:39 pm
DCBogler wrote: Sat May 28, 2022 8:06 pm

I'm thinking that as long as I have this mortgage, maybe $48k a year? Less after that. I need to stay in this house for six more years until youngest graduates from HS.
Includes health insurance and cost?
I think so? I'm not sure where I will get health insurance for the five years between when I hope to retire (60) and when I can start Medicare. I don't have any health issues and historically/genetically my family has had very good health. I would probably get high-deductible coverage.
ACA unless state has better option?
Yes, I think I would choose something from the ACA. Not sure what a minimal policy will cost in ten years.
You can get a quote now at their site.
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retired@50
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Re: Portfolio review request - thank you!

Post by retired@50 »

DCBogler wrote: Sun May 29, 2022 11:01 am ... Not sure what a minimal policy will cost in ten years.
Of course, it's way too soon to know (or even estimate) but if your income is within the ACA subsidy range (400% of Federal poverty line) then you may qualify for the advanced premium tax credit. This assumes the law stays as is, from now until then.

If you want to do some advanced reconnaissance, start your journey here: https://www.healthcare.gov/ to learn about whether your state has it's own website, or if you'll use the Federal website to sign up for a plan, and to learn about subsidy eligibility.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Duckie
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Re: Portfolio review request - thank you!

Post by Duckie »

DCBogler wrote: Sat May 28, 2022 7:42 pm How can I consolidate/simplify these accounts, and is this a good time to do that?
Now is a good time and since everything is in tax-sheltered accounts there will be no tax consequences. To consolidate pick ONE custodian for your IRAs. Let's say you pick Fidelity. Liquidate and roll your Roth IRA assets to a Fidelity Roth IRA. Liquidate and roll your TIRA assets to your Fidelity Rollover IRA. If your SIMPLE IRA is a former plan, roll its assets (already liquid) to your Fidelity Rollover IRA. Liquidate and roll your old 401k assets to your Fidelity Rollover IRA. Roll them one at a time. Wait until the first one is completely rolled over and everything is correct before starting the next one.
I would like to retire at 60 -- any thoughts on how I can make that happen?
Earn more and/or save more. Will you have a pension?
Age: 51

Desired Asset allocation: 50% stocks / 50% bonds
That is reasonable for your age. Conservative, but reasonable.
Desired International allocation: 10% of stocks
10% of 50% is only 5%. That's almost not worth it.
401k #1 (current employer, at Fidelity)
What are all the options in this plan? We need the fund names, ticker symbols, and plan expense ratios.
SIMPLE IRA (at Vanguard)
Is this plan for some current employment or can it be rolled into your Rollover IRA?

I can't give you a portfolio example until I know what options you have in your current 401k. But right now you roughly have:
  • Current 401k at Fidelity -- $52K -- 12%
    Old 401k -- $107K -- 24%
    SIMPLE IRA at Vanguard -- $4K -- 1%
    Rollover IRA at Fidelity -- $258K -- 57%
    Traditional IRA at Ameritrade -- $8K -- 2%
    Roth IRA at Vanguard -- $20K -- 4%
Shortly you could have:
  • Current 401k at Fidelity -- $52K -- 12%
    Rollover IRA at Fidelity -- $377K -- 84%
    Roth IRA at Fidelity -- $20K -- 4%
That is definitely simplified.
Topic Author
DCBogler
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Re: Portfolio review request - thank you!

Post by DCBogler »

These are great ideas, thank you for taking a look!

Is there any risk in having all your investments in one brokerage house?

I don’t have a pension coming so my retirement will all need to come from my investments, cash, and SS. I have some home equity too, could easily move to a cheaper area or get a smaller home.

My loose plan for this year is:
1. Make extra payments to pay down mortgage sooner than 19 years.
2. Consolidate investments and make sure I’m picking investments that are diversified and have low expense ratios
3. Increase savings to at least 20 percent by adding maximum $ to Roth IRA as well as the 15 percent to my 401k
DIYtrixie
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Re: Portfolio review request - thank you!

Post by DIYtrixie »

DCBogler wrote: Mon May 30, 2022 3:34 pm My loose plan for this year is:
1. Make extra payments to pay down mortgage sooner than 19 years.
You’ll hear lots of feelings here about whether it’s worth it to pay down early a mortgage with 19 years left at 2.5%. When I was younger (and our mortgage was bigger, with a longer time frame and a rate >3%), I was in the extra-payment-towards-principal camp. Then we refinanced to a smaller, 2.1%, 10 year note. We have higher salaries now, and my philosophy shifted: I’d rather save the extra payment in taxable and see if the growth in equities will enable me to pay off the mortgage even earlier than the extra payments would. A calculated risk, one that we can make because it’s not a big difference in our lifestyle either way. YMMV.
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Duckie
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Re: Portfolio review request - thank you!

Post by Duckie »

DCBogler wrote: Mon May 30, 2022 3:34 pm Is there any risk in having all your investments in one brokerage house?
There is a slight risk that there will be a website malfunction and you won't be able to access your accounts or your money for a few days.
Make extra payments to pay down mortgage sooner than 19 years.
If you can afford it, it MIGHT be worth it to get it paid off by the time you retire in nine years. But that is only if you plan to stay there. By then your kids will be out of the house and you may want to move. Saving in your retirement accounts beats paying extra on the 2.5% mortgage.
Consolidate investments and make sure I’m picking investments that are diversified and have low expense ratios
What are the options/expense ratios in your current Fidelity 401k?
SheReadsHere719
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Re: Portfolio review request - thank you!

Post by SheReadsHere719 »

1. You have many options for consolidating accounts, but if it were me, I would put like with like: put the old 401k into your current 401k, and SIMPLE IRA plus traditional IRA into the Rollover IRA. If 401k #2 is at Vanguard, then at a minimum, I would consolidate the traditional IRA to get out of Ameritrade so you’re only at two brokerages (Vanguard and Fidelity) instead of three. If you need further motivation to do this, look at it this way: It’s part of your estate planning to ensure that your executor knows where everything is!

2. Instead of paying down the mortgage sooner, I echo Duckie’s sentiments that it would be better to save in your retirement accounts. Since you are > 50, you can contribute up to $27,000 to your 401k and up to $7,000 to your IRA. Since you’re in the 22% tax bracket, if you can make enough 401k contributions to lower your AGI, you could even contribute to a traditional IRA and take a deduction on your taxes (IRS website).
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