Hi folks,
Could you kindly comment on my plan to move all my fixed income to retirement accounts.
Income: 400k-500k/year (work in tech so layoffs can occur anytime)
Early 40s, single, no kids, no debt ( I currently rent)
Expense: $40k/year
State: Virginia
Emergency fund: $50k money market, included below)
Down Payment for home: $100k in Treasury bills, included below.
New contributions: yes, via workplace 401k, max allowed by IRS.
(Values below are approximations and some minor adjustments have been made to ensure anonymity)
Approximate Current asset allocation across all accounts:
Bonds: 7%
Cash to be deployed: 10%
Emergency fund: 2.5%
Treasury bills for home: 5.5%
Stocks: 74%
-Accounts broker 1
IRA:
Money market: $4k
Vbtlx, Vanguard Total Bond Market: $4k
VEA, Vanguard FTSE Developed Markets ETF : $7k
VTI, Vanguard Total Stock Market ETF: $40k
VYM, Vanguard High Dividend Yield ETF: $4k
Taxable:
Money Market: $50k
VBTLX, Vanguard Total Bond Market: $30k
BNDW, Vanguard Total World Bond ETF: $10k
VEA, Vanguard FTSE Developed Markets ETF: $120k
VGK, Vanguard FTSE Europe ETF: $10k
VIS, Vanguard Industrials ETF: $50k
VTI, Vanguard Total Stock Market ETF: $140k
VYM, Vanguard High Dividend Yield ETF: $175k
SCHD, Schwab US Dividend ETF: $20k
SPYD, S&P 500 High Dividend ETF: $6k
Three individual stock: $15k
-Accounts in Broker 2
HSA:
VTI, Vanguard Total Stock Market ETF: $8k
BND, Vanguard Total Bond Market Index Fund: $3k
VEA, Vanguard FTSE Developed Markets ETF: $2k
Money market: $2k
401k
Fidelity 500 index fund: $55k
VT, Vanguard Total International Stock ETF: $8k
Vanguard Total International Bond Index fund: $8k
Fidelity US bond: $8k
Rollover IRA
VTI, Vanguard Total Stock Market ETF: $140k
VEA, Vanguard FTSE Developed Markets ETF: $10k
BND, Vanguard Total Bond Market Index Fund: $9k
Taxable
VTI, Vanguard Total Stock Market ETF: $127k
VEA,Vanguard FTSE Developed Markets ETF: $126k
Schd, Schwab US Dividend ETF: $52k
BND, Vanguard Total Bond Market Index Fund: $59k
BNDW, Vanguard Total World Bond ETF: $14k
VGK, Vanguard FTSE Europe ETF: $32k
FDVV, Fidelity High Dividend ETF: $21k
VYM, Vanguard High Dividend Yield ETF: $14k
VT, Vanguard Total International Stock ETF: $14k
Four individual stocks: $8500
Treasury bills: $111k
Money Market: $204k
Spyd: $9k
My target is 70% stocks and 30% bonds. I wish to reduce taxes on dividends and interest while maintaining some flexibility to have income from dividends should I loose my job (I can only rely on myself, no family or friends available to help out).
The lowest long term unrealized gains on the ETFs and stocks is about 30%, selling those is not a priority.
I am currently TLHing the bond funds and have sold sold international ETFs that had low percentage if qualified dividends hence large amounts of cash.
My plan is as follows:
1- offload BND (Vanguard Total Bond Market Index Fund) and BNDW (Vanguard Total World Bond ETF) from taxable. Use those funds and buy VTI as soon as it gets ex-dividend and requires time for TLH has passed.
2- offload all VTI from HSA, rollover IRA and IRA to purchase BND in IRA, rollover IRA and HSA accounts.
3- change my 401k contributions to 100pct for bond but not offload the existing stock ETF in 401k.
4- use current money in money market and buy VTI.
5- TLH VTI if there is some kind of crash or correction during this year.
My questions:
1- What would you do differently? The goal is to reduce taxes on dividends and interests.
2- how would rebalancing work in the situation I have BND in all non taxable accounts? I would simply buy equivalent to VTI in retirement accounts and rebalance to bndw in taxable?
3- I have been contributing to an IRA although I have no benefit since my income is too high and I contribute to 401k. Should I keep doing this, how will those gains be taxed when I take the money out at the expected age?
Thank you
Could you kindly comment on my plan to move all my fixed income to retirement accounts.
Income: 400k-500k/year (work in tech so layoffs can occur anytime)
Early 40s, single, no kids, no debt ( I currently rent)
Expense: $40k/year
State: Virginia
Emergency fund: $50k money market, included below)
Down Payment for home: $100k in Treasury bills, included below.
New contributions: yes, via workplace 401k, max allowed by IRS.
(Values below are approximations and some minor adjustments have been made to ensure anonymity)
Approximate Current asset allocation across all accounts:
Bonds: 7%
Cash to be deployed: 10%
Emergency fund: 2.5%
Treasury bills for home: 5.5%
Stocks: 74%
-Accounts broker 1
IRA:
Money market: $4k
Vbtlx, Vanguard Total Bond Market: $4k
VEA, Vanguard FTSE Developed Markets ETF : $7k
VTI, Vanguard Total Stock Market ETF: $40k
VYM, Vanguard High Dividend Yield ETF: $4k
Taxable:
Money Market: $50k
VBTLX, Vanguard Total Bond Market: $30k
BNDW, Vanguard Total World Bond ETF: $10k
VEA, Vanguard FTSE Developed Markets ETF: $120k
VGK, Vanguard FTSE Europe ETF: $10k
VIS, Vanguard Industrials ETF: $50k
VTI, Vanguard Total Stock Market ETF: $140k
VYM, Vanguard High Dividend Yield ETF: $175k
SCHD, Schwab US Dividend ETF: $20k
SPYD, S&P 500 High Dividend ETF: $6k
Three individual stock: $15k
-Accounts in Broker 2
HSA:
VTI, Vanguard Total Stock Market ETF: $8k
BND, Vanguard Total Bond Market Index Fund: $3k
VEA, Vanguard FTSE Developed Markets ETF: $2k
Money market: $2k
401k
Fidelity 500 index fund: $55k
VT, Vanguard Total International Stock ETF: $8k
Vanguard Total International Bond Index fund: $8k
Fidelity US bond: $8k
Rollover IRA
VTI, Vanguard Total Stock Market ETF: $140k
VEA, Vanguard FTSE Developed Markets ETF: $10k
BND, Vanguard Total Bond Market Index Fund: $9k
Taxable
VTI, Vanguard Total Stock Market ETF: $127k
VEA,Vanguard FTSE Developed Markets ETF: $126k
Schd, Schwab US Dividend ETF: $52k
BND, Vanguard Total Bond Market Index Fund: $59k
BNDW, Vanguard Total World Bond ETF: $14k
VGK, Vanguard FTSE Europe ETF: $32k
FDVV, Fidelity High Dividend ETF: $21k
VYM, Vanguard High Dividend Yield ETF: $14k
VT, Vanguard Total International Stock ETF: $14k
Four individual stocks: $8500
Treasury bills: $111k
Money Market: $204k
Spyd: $9k
My target is 70% stocks and 30% bonds. I wish to reduce taxes on dividends and interest while maintaining some flexibility to have income from dividends should I loose my job (I can only rely on myself, no family or friends available to help out).
The lowest long term unrealized gains on the ETFs and stocks is about 30%, selling those is not a priority.
I am currently TLHing the bond funds and have sold sold international ETFs that had low percentage if qualified dividends hence large amounts of cash.
My plan is as follows:
1- offload BND (Vanguard Total Bond Market Index Fund) and BNDW (Vanguard Total World Bond ETF) from taxable. Use those funds and buy VTI as soon as it gets ex-dividend and requires time for TLH has passed.
2- offload all VTI from HSA, rollover IRA and IRA to purchase BND in IRA, rollover IRA and HSA accounts.
3- change my 401k contributions to 100pct for bond but not offload the existing stock ETF in 401k.
4- use current money in money market and buy VTI.
5- TLH VTI if there is some kind of crash or correction during this year.
My questions:
1- What would you do differently? The goal is to reduce taxes on dividends and interests.
2- how would rebalancing work in the situation I have BND in all non taxable accounts? I would simply buy equivalent to VTI in retirement accounts and rebalance to bndw in taxable?
3- I have been contributing to an IRA although I have no benefit since my income is too high and I contribute to 401k. Should I keep doing this, how will those gains be taxed when I take the money out at the expected age?
Thank you
Statistics: Posted by Joli — Wed Mar 20, 2024 8:42 am — Replies 5 — Views 231