I'm turning 55, will likely leave BigCorp within a year to do part-time consulting, and have about 86% in equities. I've been puzzling how to reallcate to 70% while keeping my portfolio fairly simple and easy to manage. Would appreciate thoughts - specific questions below.
Emergency Fund: 4 mos.
Debt: N/A, house will be paid off next year
Tax Filing: Head of Household
Tax Rate: High, but expect 22% in '25 or '26 and beyond
State: CO
Age: 54
Desired Asset Alloction: 70/30
Desired Int'l: 10%
Approx. Porfolio: $2.3M
Retirement Assets
Taxable:
1% iBonds
25% VTSAX
2.5% CDs
401K:
8.7% VBIIX (Van intermediate bond fund - I can't find the expense ratio, but its a 401K - not many options)
Trad. IRA:
54% VTSAX
5% VTIAX (vanguard intl stock market)
1.5% SWAGX (schwab u.s. bond fund)
Roth:
2.2% DVY (divenden paying fund)
Contributions
$18K to 401K VBIIX (vanguard intermediate bond)
10K iBond purchase
Questions
1. Given my planned contributions, I will need to move 15% of my portfolio to fixed income to get to 30% fixed income. I don't want an annuity or stable value fund, so my options are treasuries, bond funds, or CDs. My goals are to have some fixed income accessible over the next 7 years, until I turn 62 and plan to begin 4% withdraws, in the event my consulting doesn't cover expenses or I have large/lumpy expenses. I'm considering selling some of my taxable VTSIX to build on my current CD ladder. That leaves me managing the CDS as they come due, but for some reason gives me comfort that I will have guaranteed returns at rates above 4% (based on what I can buy now). If I do this, what do I do when I'm 62 and ready to withdraw on a regular basis? I can manage well now but as I get older I want things simplier.
2. Then, I may sell some VTSAX in my Trad IRA to purchase more of the SWAGX bond fund. I don't love bond funds, but they seem more simple to manage than treasuries that would have to be sold. Am I missing anything not buying treasuries?
3. I'm not sure I can do much to minimze tax implications, but let me know if I'm missing something.
4. I feel like I'm far from a simple 3 fund portfolio - thoughts I can simplify things further?
Thanks!
Emergency Fund: 4 mos.
Debt: N/A, house will be paid off next year
Tax Filing: Head of Household
Tax Rate: High, but expect 22% in '25 or '26 and beyond
State: CO
Age: 54
Desired Asset Alloction: 70/30
Desired Int'l: 10%
Approx. Porfolio: $2.3M
Retirement Assets
Taxable:
1% iBonds
25% VTSAX
2.5% CDs
401K:
8.7% VBIIX (Van intermediate bond fund - I can't find the expense ratio, but its a 401K - not many options)
Trad. IRA:
54% VTSAX
5% VTIAX (vanguard intl stock market)
1.5% SWAGX (schwab u.s. bond fund)
Roth:
2.2% DVY (divenden paying fund)
Contributions
$18K to 401K VBIIX (vanguard intermediate bond)
10K iBond purchase
Questions
1. Given my planned contributions, I will need to move 15% of my portfolio to fixed income to get to 30% fixed income. I don't want an annuity or stable value fund, so my options are treasuries, bond funds, or CDs. My goals are to have some fixed income accessible over the next 7 years, until I turn 62 and plan to begin 4% withdraws, in the event my consulting doesn't cover expenses or I have large/lumpy expenses. I'm considering selling some of my taxable VTSIX to build on my current CD ladder. That leaves me managing the CDS as they come due, but for some reason gives me comfort that I will have guaranteed returns at rates above 4% (based on what I can buy now). If I do this, what do I do when I'm 62 and ready to withdraw on a regular basis? I can manage well now but as I get older I want things simplier.
2. Then, I may sell some VTSAX in my Trad IRA to purchase more of the SWAGX bond fund. I don't love bond funds, but they seem more simple to manage than treasuries that would have to be sold. Am I missing anything not buying treasuries?
3. I'm not sure I can do much to minimze tax implications, but let me know if I'm missing something.
4. I feel like I'm far from a simple 3 fund portfolio - thoughts I can simplify things further?
Thanks!
Statistics: Posted by MTNLVR — Wed Jun 12, 2024 4:29 pm — Replies 2 — Views 439