First post here as I only recently found and joined this forum! While I was a good saver for the last decade, I am new to the world of investing and know that I have a lot to learn. I am a bit stuck regarding whether or not I have set my portfolio up correctly or what I can do better. Alongside that, I am simply trying to figure out how to save more since I feel as though I am falling behind with not yet starting a 529 for my 2 year-old child or beginning to build a taxable account on the side.
I hope to gain insight/guidance into how my portfolio currently stands and what potential changes I should consider making in order to balance it better. Thank you all in advance!
Emergency Funds: Approximately 7 months of living expense coverage in a HYSA (3.75% APY).
Debt:
- Mortgage ($305k; 30 year at 5.25% interest rate)
- ~$30k remaining on my wife’s student loans; we currently have the money to pay this off in the HYSA (on top of emergency funds) and are waiting on the Supreme Court ruling on student debt relief and for loan repayments to begin again
Tax Rate: 12% Federal; 6.5% State
State of Residence: South Carolina
Age: 34; Wife: 36
Desired Asset Allocation: 90% Stocks / 10% Bonds
Desired International Allocations: I am thinking around ~20% of stock, but am unsure and open to suggestions
Please provide an approximate size of your total portfolio: ~270k (excluding emergency fund and earmarked student loan funds)
Current Retirement Assets:
Taxable: (3.9%)
Note: I am unsure if I should have listed these as they will likely not be held until I retire. My plan would be to migrate funds from these into retirement accounts if I were to close them out.
- 3.7% - I-Bond
- 0.2% - Employee Stock Purchase Plan (5% discount on average price across quarter); Negligible amount due to this program starting in Q1 2023 and only contributing 2% of salary
Note: I recently moved jobs and opted into my new company’s benefit of having Edelman Financial Engines manage my 401(k) portfolio. The account was rebalanced from a Target Date Fund to the breakdown listed below based on their management and my answering the risk assessment questions.
- 15.8% - Target Date 2050 Fund (0.28%)
- 15.5% - International Index Fund (0.04%)
- 14.3% - S&P 500 Index Fund (0.02%)
- 5.8% - Bond Market Index Fund (0.02%)
- 5.9% - Russell 2000 Index Fund (0.03%)
- Company Match: 100% match on 10% of salary
- 31.4% - Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)
Note: From what I can gather, there is a 0.03% monthly investment administration fee on top of the expense ratios listed below for the institution which my company uses for the Health Savings Accounts.
- 2.3% - Cash
- 0.7% - Vanguard Extended Market Index Institutional Plus Shares (VEMPX) (0.04%)
- 3.1% - Vanguard Institutional Index Fund Institutional Plus Shares (VIIIX) (0.02%)
- 1.3% - Vanguard Total International Stock Index Fund Institutional Plus Shares (VTPSX) (0.07%)
New annual contributions for 2023
- $~23,000 to his roth 401(k) (total from my 10% contribution and resultant employer match)
- $6500 to his roth IRA (dollar cost average across each month from Jan-Dec)
- $7750 to his Health Savings Account ($1250 from employer; dollar cost average remaining each month from Jan-Dec)
Funds available in his 401(k)
Note: None of the funds available in my 401(k) portfolio have standard ticker symbols.
- Target Date 2025 Fund (0.24%)
- Target Date 2030 Fund (0.26%)
- Target Date 2035 Fund (0.28%)
- Target Date 2040 Fund (0.28%)
- Target Date 2045 Fund (0.28%)
- Target Date 2050 Fund (0.28%)
- Target Date 2055 Fund (0.28%)
- Target Date 2060 Fund (0.28%)
- Target Date 2065 Fund (0.28%)
- Target Date RETIRE (0.23%)
- S&P 500 Index Fund (0.02%)
- Russell 2000 Index Fund (0.03%)
- International Index Fund (0.04%)
- Balanced Index Fund (0.03%)
- Bond Market Index Fund (0.02%)
- “My Company’s Name” Stock Fund (0.04%)
- US Large Companies Fund (0.25%)
- US Small/Mid Companies Fund (0.62%)
- Global Equity Fund (0.57%)
- International Companies Fund (0.53%)
- Diversified Real Asset Fund (0.58%)
- Stable Value Fund (0.26%)
- Global Bond Fund (0.38%)
- Vanguard Target Retirement 2020 Fund (VTWNX) (0.08%)
- Vanguard Target Retirement 2025 Fund (VTTVX) (0.08%)
- Vanguard Target Retirement 2030 Fund (VTHRX) (0.08%)
- Vanguard Target Retirement 2035 Fund (VTTHX) (0.08%)
- Vanguard Target Retirement 2040 Fund (VFORX) (0.08%)
- Vanguard Target Retirement 2045 Fund (VTIVX) (0.08%)
- Vanguard Target Retirement 2050 Fund (VFIFX) (0.08%)
- Vanguard Target Retirement 2055 Fund (VFFVX) (0.08%)
- Vanguard Target Retirement 2060 Fund (VTTSX) (0.08%)
- Vanguard Target Retirement 2065 Fund (VLXVX) (0.08%)
- Vanguard Target Retirement Income Fund (VTINX) (0.08%)
- Vanguard Materials Index Fund Admiral Shares (VMIAX) (0.10%)
- Vanguard Extended Market Index Fund Institutional Plus Shares (VEMPX) (0.04%)
- Vanguard Institutional Index Fund Institutional Plus Shares (VIIIX) (0.02%)
- Vanguard Real Estate Index Fund Institutional Shares (VGSNX) (0.10%)
- Vanguard Small-Cap Index Fund Admiral Shares (VSMAX) (0.05%)
- Vanguard Total Bond Market Index Fund Institutional Plus Shares (VBMPX) (0.03%)
- Vanguard Total International Stock Index Fund Institutional Plus Shares (VTPSX) (0.07%)
- Vanguard Wellesley Income Fund Admiral Shares (VWIAX) (0.16%)
- Vanguard Emerging Markets Stock Index Fund Institutional Shares (VEMIX) (0.10%)
- Vanguard Growth Index Fund Institutional Shares (VIGIX) (0.04%)
- Vanguard Inflation-Protected Securities Fund Institutional Shares (VIPIX) (0.07%)
- Vanguard Mid-Cap Value Index Fund Admiral Shares (VMVAX) (0.07%)
- Vanguard Short-Term Bond Index Fund Admiral Shares (VBIRX) (0.07%)
- Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares (VTAPX) (0.06%)
- Vanguard Small Cap Value Index Fund Admiral Shares (VSIAX) (0.07%)
- Vanguard Total International Bond Index Fund Admiral Shares (VTABX) (0.11%)
- Vanguard Value Index Fund Admiral Shares (VVIAX) (0.05%)
- Vanguard FTSE Social Index Fund Admiral Shares (VFTAX) (0.14%)
- I am on the fence as to whether or not I should continue using Edelman Financial Services for active management of my 401(k) portfolio. Not that they have done anything bad or had major losses, but I signed up for their services due to the low fees through my company and in hopes to gain insight into how they allocate/manage the investments; vs being 100% in a Target Date Fund as I was for ~9 years prior. What is the general thought of services such as this managing only a portion of my portfolio?
- I performed a rollover of my old 401(k) into my new 401(k) to have all the funds together. My old 401(k) was traditional/pre-tax. All my new contributions are to a roth 401(k). Should I continue contributing all of my 10% into the roth or is there a reason to split it between roth/traditional?
- For the Health Savings Account, I feel that my investments are currently too aggressive given that we generally use this account to pay medical bills as they arrive. Should I complement/change the investment mix to include a weighting of bond funds to be more conservative? Given the available funds, which would balance out the portfolio the best?
- I wish to begin a 529 or UGMA to aid in saving for my child’s college fund and then use any remaining funds to begin a building a taxable brokerage account for retirement. However, I am not yet maxing out the 401(k) contribution and my wife does not have an IRA under her name (stay at home mom). Should we be looking to fully fund my 401(k) and an IRA for her before considering funding 529/UGMA or taxable brokerage accounts?
- Thoughts on the ESPP? This is the first time I have been involved with such a plan, but I do not know if I should generally hold the stocks or sell immediately after they vest.
- Is there anything glaring I may have overlooked that needs to be addressed within my portfolio?