2 questions:roccodean wrote: ↑Mon Sep 05, 2022 9:58 amretiredjg wrote: ↑Mon Sep 05, 2022 9:43 amYou do not have a "bad portfolio" but it is not very tax efficient because of the taxable bonds in the taxable account.As you can see, bulk of income going into taxable brokerage account- is this a good portfolio if goal is 60/40 stock/bond?
The first thing you need to do is see the portfolio as a whole, not as a bunch of separate accounts. It looks like this.
I believe you have set it up that way intentionally, to take advantage of the easy target funds in all the accounts except taxable. The way to make this more tax-efficient is to
- Total portfolio = $1,888,000 not including the 529 accounts.
Taxable. Total 900k 47.7%
17.2% VANGUARD INDEX FUNDS VANGUARD TOTAL STOCK MARKEt (VTI)
11.4 % ANGUARD STAR FD VANGUARD TOTAL INTL STOCK INDEX (VXUS) <---typo? Do you hold the STAR fund too?
6.7% VANGUARD MUNICIPAL BOND FUNDS VANGUARD TAX EXEmpt (VTEB)
6.7% Vanguard Total Bond Market Index Fund (BND)
5.7% Vanguard Total International Bond Index Fund (BNDX)
His 401k 472k 25%
12.5 FID FREEDOM 2030 K (FSNQX)
12.5 FID FREEDOM 2035 K (FSNUX)
His Roth IRA at Vanguard $36k 1.9%
1.9% VTTHX- 2035 target retirement
Her 403b $230k 12.2%
12.2% Fidelity 2030 fund class K ( FSNQX) 64/36 stock/bond
Her Roth IRA- vanguard $250K 13.2%
13.2% VTTHX- 2035 target retirement
1. fill His 401k and Her 403b with a taxable bond fund (whatever your best choice is)
2. Sell all the total bond and total international bond in the taxable account
3. Keep only as much of the tax-exempt bond as needed to reach your 60/40 desired allocation. Since your taxable contributions account for such a large portion of total contributions, the tax-exempt bond percentage in taxable will grow over time. If you are not comfortable with that much in VTEB, put some into a short term treasury fund (lower dividends and no state tax).
4. Put a 500 index fund (or 500 index plus extended market index) in the Roth IRAs.
It would look like this:
- Taxable. Total 900k 47.7%
24.7% VANGUARD INDEX FUNDS VANGUARD TOTAL STOCK MARKEt (VTI)
20% % ANGUARD STAR FD VANGUARD TOTAL INTL STOCK INDEX (VXUS) <---typo? Do you hold the STAR fund too?
3% % VANGUARD MUNICIPAL BOND FUNDS VANGUARD TAX EXEmpt (VTEB)
His 401k 472k 25%
25% best bond fund
His Roth IRA at Vanguard $36k 1.9%
1.9% 500 index or extended market index
Her 403b $230k 12.2%
12.2% best bond fund
Her Roth IRA- vanguard $250K 13.2%
13.2% 500 index
Contributions
New annual Contributions
$20,500 his deductible 401k + employer matches addition $30,000 <--all to bonds
His mega backdoor roth (post tax dollars convert to Roth): additonal $11,000 approx <--all to bonds
$20,500 her 403b + additional $10,000 employer match <--all to bonds
$6000 his backdoor Roth IRA <--all to stocks
$6000 her backdoor Roth IRA<--all to stocks
$300,000 taxable (for retirement, not short term goals) into chase brokerage <--split between US stocks, foreign stocks and VTEB to attain your 60/40.
A different alternative, if you don't like this idea, is to keep things much as they are but replace the 2 taxable bond funds with VTEB and maybe a short term treasury fund.
thank you very much for this. I will look into it in more detail.
Regarding the VXUS fund, it is Vanguard Total International Stock Index Fund (VXUS)
1) in the Roth IRA: why use SP500 as opposed to using vti/vxus max (as I’ve been doing to mimic the vanguard life strategy funds )
2) since there are no foreign bonds available in our 401k/403b accounts , is it worth it to hold any in taxable or Roth IRA ?