Hello all.
I am just getting to grips with all this so below is the info requested except the funds I post are what I intend to move everything to this week, unless you suggest otherwise.
Emergency funds: 3 months. Planning on building to 6 months by EOY.
Debt: Mortgage at 3.85%. Credit cards that get used for spending and paid off in full every month. Car loan that will be paid off by Nov 2024.
Tax filing status: Married filing jointly.
Tax rate: 22% federal, 0% state.
State of residence: TN
Age: I'm 43 and wife is 30.
Desired asset allocation: 70% US stocks, 15% international stocks, 15% US bonds.
Size of portfolio: $200k
Other Info: I know that "life happens", but the plan at the moment is that I will retire at 65 and we live off her salary for 5 years, when she will retire at 57. The plan then (if my funds are big enough) is that we would live off my retirement funds until she reaches official retirement age.
Porfolio:
Taxable: None.
My 401k / Roth 401k
Held with: Fidelity
FXAIX: Fidelity 500 Index Fund
% of total fund: 3% 401k; 5% Roth 401k;
Net cost: 0.015%
FSPSX: Fidelity International Index Fund
% of total fund: 1% 401k; 2% Roth 401k;
Net cost: 0.035%
FXAIX: Fidelity US Bond Index Fund
% of total fund: 2% 401k; 3% Roth 401k;
Net cost: 0.025%
Wife's 401k / Roth 401k
Held with: Empower
Note that these are funds that appear to be unique to her employer and I can't find ticker symbols.
Stock Index Fund
Description: S&P 500 index tracker
% of total fund: 23% 401k; 7% Roth 401k;
Net cost: 0.040%
International Stock fund
Description: Spread across multiple international stock portfolios (?!)
% of total fund: 8% 401k; 2% Roth 401k;
Net cost: 0.650%
US Bond Fund
Description: Bloomberg Barclays aggregate bond index tracker
% of total fund: 8% 401k; 2% Roth 401k;
Net cost: 0.260%
My Traditional IRA
Held with: Fidelity
FZROX: Fidelity ZERO Total Market Index Fund
% of total fund: 19%
Net cost: 0.000%
FZILX: Fidelity ZERO International Index Fund
% of total fund: 5%
Net cost: 0.000%
My Roth IRA
Held with: Fidelity
FZROX: Fidelity ZERO Total Market Index Fund
% of total fund: 3%
Net cost: 0.000%
Wife's Roth IRA
Held with: Fidelity
FZROX: Fidelity ZERO Total Market Index Fund
% of total fund: 3%
Net cost: 0.000%
My HSA
Held with: Further
VFIAX: Vanguard 500 Index Fund
% of total fund: 2%
Net cost: 0.040%
Wife's HSA
Held with: Schwab HSBA
Note I can't find a way to see their investment options without creating the account first, but I believe they have no/low cost US Index trackers available.
No/Low cost US index tracker
% of total fund: 3%
Net cost: ?
Contributions
My 401k
Annual contributions: $6k
Company match: 3% for my 4%
My Roth 401k
Annual contributions: $17k
Wife's 401k
Annual contributions: $17k
Company match: 4.7% for her 8% plus an additional 3%
Wife's Roth 401k
Annual contributions: $6k
My Traditional IRA
Annual contributions: $0k
My Roth IRA
Annual contributions: $7k
Wife's Roth IRA
Annual contributions: $7k
My HSA
Annual contributions: $3k plus 1k company match
Wife's HSA
Annual contributions: 4k
Questions
1. Generally, does this look like a solid plan? Any suggested changes you have?
2. The international and bonds costs in my wife's 401k/Roth 401k available plans are pretty high. Should we look to move that money into the options available in my 401k/Roth 401k and/or Traditional 401k, and just put all her money into the lower costs US stocks tracker?
3. My wife apparently has the option to invest in a 401h. Is this beneficial, and should we be prioritizing this over any of the other investments?
4. If we cannot afford to invest the full $46k in the 401k/Roth 401k annual limits, do you have any guidance as to whether we should be putting more into mine or her funds? My thinking here was that it would be better in mine as we will be pulling from mine first so want that to grow quicker.
5. There are so many different thoughts about whether you should invest more in Traditional or Roth options. I kind of understand most viewpoints, however I do struggle with the idea that we may be in a higher tax bracket when we retire as I don't see how our spending (and therefore our fund withdrawals) will be higher than our salary. Plus in my mind, letting that money paid in tax grow for 20 years and then paying tax at a lower rate on the higher amount seems like it will be worth more. That said, when you consider RMD's then I see the benefit of the Roth options (as I believe they don't have RMD's?). In addition, I like certainty so the thought that I can just deal with the tax now and not have to worry about it later is a clear benefit to me. That is all making me lean more towards putting most of the money into the Roth's. Any advice here?
Thank you all!
I am just getting to grips with all this so below is the info requested except the funds I post are what I intend to move everything to this week, unless you suggest otherwise.
Emergency funds: 3 months. Planning on building to 6 months by EOY.
Debt: Mortgage at 3.85%. Credit cards that get used for spending and paid off in full every month. Car loan that will be paid off by Nov 2024.
Tax filing status: Married filing jointly.
Tax rate: 22% federal, 0% state.
State of residence: TN
Age: I'm 43 and wife is 30.
Desired asset allocation: 70% US stocks, 15% international stocks, 15% US bonds.
Size of portfolio: $200k
Other Info: I know that "life happens", but the plan at the moment is that I will retire at 65 and we live off her salary for 5 years, when she will retire at 57. The plan then (if my funds are big enough) is that we would live off my retirement funds until she reaches official retirement age.
Porfolio:
Taxable: None.
My 401k / Roth 401k
Held with: Fidelity
FXAIX: Fidelity 500 Index Fund
% of total fund: 3% 401k; 5% Roth 401k;
Net cost: 0.015%
FSPSX: Fidelity International Index Fund
% of total fund: 1% 401k; 2% Roth 401k;
Net cost: 0.035%
FXAIX: Fidelity US Bond Index Fund
% of total fund: 2% 401k; 3% Roth 401k;
Net cost: 0.025%
Wife's 401k / Roth 401k
Held with: Empower
Note that these are funds that appear to be unique to her employer and I can't find ticker symbols.
Stock Index Fund
Description: S&P 500 index tracker
% of total fund: 23% 401k; 7% Roth 401k;
Net cost: 0.040%
International Stock fund
Description: Spread across multiple international stock portfolios (?!)
% of total fund: 8% 401k; 2% Roth 401k;
Net cost: 0.650%
US Bond Fund
Description: Bloomberg Barclays aggregate bond index tracker
% of total fund: 8% 401k; 2% Roth 401k;
Net cost: 0.260%
My Traditional IRA
Held with: Fidelity
FZROX: Fidelity ZERO Total Market Index Fund
% of total fund: 19%
Net cost: 0.000%
FZILX: Fidelity ZERO International Index Fund
% of total fund: 5%
Net cost: 0.000%
My Roth IRA
Held with: Fidelity
FZROX: Fidelity ZERO Total Market Index Fund
% of total fund: 3%
Net cost: 0.000%
Wife's Roth IRA
Held with: Fidelity
FZROX: Fidelity ZERO Total Market Index Fund
% of total fund: 3%
Net cost: 0.000%
My HSA
Held with: Further
VFIAX: Vanguard 500 Index Fund
% of total fund: 2%
Net cost: 0.040%
Wife's HSA
Held with: Schwab HSBA
Note I can't find a way to see their investment options without creating the account first, but I believe they have no/low cost US Index trackers available.
No/Low cost US index tracker
% of total fund: 3%
Net cost: ?
Contributions
My 401k
Annual contributions: $6k
Company match: 3% for my 4%
My Roth 401k
Annual contributions: $17k
Wife's 401k
Annual contributions: $17k
Company match: 4.7% for her 8% plus an additional 3%
Wife's Roth 401k
Annual contributions: $6k
My Traditional IRA
Annual contributions: $0k
My Roth IRA
Annual contributions: $7k
Wife's Roth IRA
Annual contributions: $7k
My HSA
Annual contributions: $3k plus 1k company match
Wife's HSA
Annual contributions: 4k
Questions
1. Generally, does this look like a solid plan? Any suggested changes you have?
2. The international and bonds costs in my wife's 401k/Roth 401k available plans are pretty high. Should we look to move that money into the options available in my 401k/Roth 401k and/or Traditional 401k, and just put all her money into the lower costs US stocks tracker?
3. My wife apparently has the option to invest in a 401h. Is this beneficial, and should we be prioritizing this over any of the other investments?
4. If we cannot afford to invest the full $46k in the 401k/Roth 401k annual limits, do you have any guidance as to whether we should be putting more into mine or her funds? My thinking here was that it would be better in mine as we will be pulling from mine first so want that to grow quicker.
5. There are so many different thoughts about whether you should invest more in Traditional or Roth options. I kind of understand most viewpoints, however I do struggle with the idea that we may be in a higher tax bracket when we retire as I don't see how our spending (and therefore our fund withdrawals) will be higher than our salary. Plus in my mind, letting that money paid in tax grow for 20 years and then paying tax at a lower rate on the higher amount seems like it will be worth more. That said, when you consider RMD's then I see the benefit of the Roth options (as I believe they don't have RMD's?). In addition, I like certainty so the thought that I can just deal with the tax now and not have to worry about it later is a clear benefit to me. That is all making me lean more towards putting most of the money into the Roth's. Any advice here?
Thank you all!
Statistics: Posted by ap901 — Sun Mar 24, 2024 10:27 am — Replies 2 — Views 109