Aloha,
I've just recently discovered this community and the idea of simplifying our portfolio really resonates with me (and lit a fire in me to reassess our investments). I am very grateful for the experience and the wisdom shared by the folks here. I only wish that I'd discovered it sooner.
I am embarrassed to admit that my husband and I have neglected our portfolio for a very long time, in large part, because we didn't want to tinker with it without a clear plan of what we were doing and why. I've realized that our convoluted portfolio needs very much to be cleaned up and simplified. I'd appreciate any advice or thoughts before I actually start to sell/transfer/roll over anything. Thank you for taking the time to read my post and to review our portfolio. Mahalo.
Emergency funds: Yes
Debt: Mortgage $431k @3.875% to 2046. Current guestimate for the house would be about $1.6 M, which is less than Zillow's and Redfin's estimated values (I've heard that they can be quite inflated). Credit cards are paid off each month w/o interest. Our cars are from 2012 and 2016 with no loans, but DH might need to trade in the 2016 for something more practical for work within a year or so.
Tax Filing Status: Married Filing Jointly, 0 children
Tax Rate: 22% Federal, 8.25% State
State of Residence: Hawaii
Age: 52/52
His income: around $120,000 (+ some rental income)
Desired Asset allocation: 75% stocks/25% bonds (I'm not sure if monthly rental income would have any impact on AA? If not, would this be too aggressive?)
Desired International allocation: 10% of stocks (Is this too low?)
Size of total portfolio: $2 M (without 2 rental properties owned with no mortgages)
Current Retirement Assets:
-Taxable:
--Cash and Cash Equivalents (Total 33.061%)
4.372% T Bills, short-term (<17 weeks) at Treasury Direct (His)
4.372% T Bills, short-term (<17 weeks) at Treasury Direct (Hers)
6.085% Vanguard Federal Money Market Fund (VMFXX) (0.11%) (Hers)
5.187% Cash Savings @4.3% APY at Citi (Hers)
0.77% Cash Savings @0.01% APY at local bank (Joint)
4.124% Ally Money Market @4.2% APY (Joint)
2.529% Ally CD @5% matures 12.22.24 (Joint)
3.099% Ally CD @5% matures 01.06.25 (Joint)
2.523% Ally CD @5% matures 07.02.25 (Joint)
--Equity/Stocks:
2.581% Schwab U.S. Dividend Equity ETF (SCHD) (0.06%) (Joint)
2.404% Schwab U.S. Large Cap Growth ETF (SCHG) (0.04%) (Joint)
1.253% Janus Global Life Sciences Fund (JNGLX) (0.80%) at Janus Henderson (Hers)
0.806% Janus Global Technology Fund (JNGTX) (0.81%) at Janus Henderson (Hers)
0.894% very few shares of individual stocks (Amazon, Ford, Shopify, Palantir, Nu Holdings, Upstart, Redfin) at Charles Schwab (Joint)
-His 401k from previous job#1 at Empower:
14.502% Vanguard 500 Index Admiral Fund (VFIAX) (0.04%)
--Other available funds with low ER's (<0.50%):
Vanguard Life Strategy Funds: Income (VASIX)/Conservative (VSCGX)/Moderate (VSMGX)/Growth (VASGX) (0.11-0.14%)
Vanguard Intermediate-Term Bond Index (VBILX)(0.07%)
T Rowe Price Retirement Funds: 2010, 2020, 2030, 2040, 2050 (0.34-0.45%)
-His 401k from previous job#2 at Empower:
2.758% Legal & General S&P 500 DC CIT (?) (0.0125%)
-His 401k from previous job#3 at Net Benefits Fidelity:
1.159% S&P 500 Equity Index Fund (FXAIX) (0.015%)
-His Rollover IRA + Traditional IRA at Vanguard:
6.492% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
0.549% Vanguard European Stock Index Fund (VEUSX) (0.13%)
0.426% Vanguard Emerging Markets Index Fund (VEMAX) (0.14%)
-His Roth IRA at Vanguard (for 2024):
0.393% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
-Her 401k from previous job: (Fund selections made at beginning of job in 1999, funds replaced only by custodian a few times)
11.551% Vanguard Institutional Index Fund (VINIX ) (0.02%) (to be changed on 08.01.2024 by custodian to Vanguard S&P 500 Index Fund (VFIAX) (0.015%))
9.637% JP Morgan Large Cap Growth Fund (JLGMX) (0.36%)
1.763% Capital Growth (American Funds?) EuroPacific Growth Fund (RERGX?) (0.41%)
--Other available funds with low ER's:
Vanguard Target Retirement Trusts: (?) (0.075%)
Vanguard FTSE Ex-U.S. All World Index Fund (VFWSX)(0.08%)
Vanguard Wellington Fund (VWENX)(0.18%)
Vanguard Short-Term Federal Fund (VSGDX)(0.10%)
Vanguard Total Bond Market Index (VBTIX)(0.035%)
-Her Traditional IRA at Vanguard:
4.050% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
-Her Traditional IRA at Ally: (Ally will charge $75 to transfer out the funds at maturity and close the account.)
0.372% CD @4.0% matures 04.2027
-Her Roth IRA at Vanguard:
3.493% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
0.371% Schwab U. S. Large Cap Growth Fund (SCHG) (0.04%)
-Her Roth IRA at Janus Henderson:
0.565% Janus Global Life Sciences Fund (JNGLX)(0.80%)
Contributions:
-His State Pension:
Unfortunately, I have no info other than that deductions are taken from every paycheck and employer match doesn't even begin to partially (50%) vest until past his desired/hopeful retirement age of 60 in about 8 years. (He's been promising to get more details from HR/union)
-His 457(b) pre-tax at Empower: (He just signed up to contribute as of 08.01.24. His paycheck varies depending on available overtime, so we're trying to figure out how much we can afford to contribute per month.)
BlackRock Large Cap Index Fund (?) (0.011%) This is what we've selected.
--Other available funds with low ER's:
Vanguard Wellington Fund (VWENX)(0.18%)
Vanguard Target Retirement Trust II: 2020 to 2070 (?) (0.075%)
BlackRock Non-U.S. Equity Index (?) (0.11%)
BlackRock U.S. Bond Index F Cl (?) (0.04%)
BlackRock Total Return Bond Fund (MAHQX?)(0.20%)
-His 457(b) Roth at Empower: (starting 08.01.2024)
BlackRock Large Cap Index Fund (BRG*X?) (0.011%)
-$8000 His Roth IRA (already contributed above for 2024)
-$8000 Her Roth IRA (same)
Questions:
1. For AA, do we need more bonds even if we have monthly rental income from long-term tenants? Can we allocate more bonds if/when we sell the rental properties or should we be more conservative starting now? DW is hoping to retire in about 8 years.
2. Is it worth rolling over all of our 401k's from previous jobs to IRA's now for the sake of consolidation even if we plan to start converting them to Roth IRA's as soon as we hit 59.5 y.o.? For the most part, we've tried to pick and hold the funds with the cheapest ER's for the old 401k accounts. (One issue that we need to resolve w.r.t. our respective Traditional IRA accounts is that a small fraction of the contributions were made with post-tax funds. We were completely oblivious about pro-rata treatment for taxes if/when converting funds in the IRA to Roth. I realize that this is a whole separate, messy issue that I'm in need of help to figure out.)
3. Where should I start in terms of cleaning up and simplifying our portfolio? I'd like to eliminate both the JP Morgan Large Cap Growth Fund and Capital EuroPacific Growth Funds and have only the Vanguard Institutional Index Fund in her 401k to take advantage of the low ER and buy an international index fund at Vanguard with lower ER. Is this a bad idea to sell these at the moment?
4. I'd like to liquidate both JNGLX and JNGTX in her taxable Janus account and transfer the cash to taxable Vanguard account to buy VTI. Would this be worth paying the resulting taxes?
5. I'd like to sell JNGLX in her Janus Roth IRA and transfer the Roth IRA composed of only cash to Vanguard and buy VTI. I think this would be pretty straightforward, but am I missing something?
6. Would it be better to sell the VFIAX in his and her Vanguard IRA's and replace it with a) a bond fund so that the bonds would be held in tax-advantaged accounts instead of the taxable accounts (as they are currently) and b) an international index fund? Is it better to hold the international index fund in a tax-advantaged account (I vaguely remember reading something about the effects of non-qualified dividends and foreign tax credit somewhere on this forum)?
7. As the T Bills mature, use the cash to buy VTI in taxable Vanguard account?
8. I don't have any excuse for the relatively large portion of cash other than waffling over paying off our mortgage debt or invest in VTI. Any advice either way?
Thank you very much!
I've just recently discovered this community and the idea of simplifying our portfolio really resonates with me (and lit a fire in me to reassess our investments). I am very grateful for the experience and the wisdom shared by the folks here. I only wish that I'd discovered it sooner.
I am embarrassed to admit that my husband and I have neglected our portfolio for a very long time, in large part, because we didn't want to tinker with it without a clear plan of what we were doing and why. I've realized that our convoluted portfolio needs very much to be cleaned up and simplified. I'd appreciate any advice or thoughts before I actually start to sell/transfer/roll over anything. Thank you for taking the time to read my post and to review our portfolio. Mahalo.
Emergency funds: Yes
Debt: Mortgage $431k @3.875% to 2046. Current guestimate for the house would be about $1.6 M, which is less than Zillow's and Redfin's estimated values (I've heard that they can be quite inflated). Credit cards are paid off each month w/o interest. Our cars are from 2012 and 2016 with no loans, but DH might need to trade in the 2016 for something more practical for work within a year or so.
Tax Filing Status: Married Filing Jointly, 0 children
Tax Rate: 22% Federal, 8.25% State
State of Residence: Hawaii
Age: 52/52
His income: around $120,000 (+ some rental income)
Desired Asset allocation: 75% stocks/25% bonds (I'm not sure if monthly rental income would have any impact on AA? If not, would this be too aggressive?)
Desired International allocation: 10% of stocks (Is this too low?)
Size of total portfolio: $2 M (without 2 rental properties owned with no mortgages)
Current Retirement Assets:
-Taxable:
--Cash and Cash Equivalents (Total 33.061%)
4.372% T Bills, short-term (<17 weeks) at Treasury Direct (His)
4.372% T Bills, short-term (<17 weeks) at Treasury Direct (Hers)
6.085% Vanguard Federal Money Market Fund (VMFXX) (0.11%) (Hers)
5.187% Cash Savings @4.3% APY at Citi (Hers)
0.77% Cash Savings @0.01% APY at local bank (Joint)
4.124% Ally Money Market @4.2% APY (Joint)
2.529% Ally CD @5% matures 12.22.24 (Joint)
3.099% Ally CD @5% matures 01.06.25 (Joint)
2.523% Ally CD @5% matures 07.02.25 (Joint)
--Equity/Stocks:
2.581% Schwab U.S. Dividend Equity ETF (SCHD) (0.06%) (Joint)
2.404% Schwab U.S. Large Cap Growth ETF (SCHG) (0.04%) (Joint)
1.253% Janus Global Life Sciences Fund (JNGLX) (0.80%) at Janus Henderson (Hers)
0.806% Janus Global Technology Fund (JNGTX) (0.81%) at Janus Henderson (Hers)
0.894% very few shares of individual stocks (Amazon, Ford, Shopify, Palantir, Nu Holdings, Upstart, Redfin) at Charles Schwab (Joint)
-His 401k from previous job#1 at Empower:
14.502% Vanguard 500 Index Admiral Fund (VFIAX) (0.04%)
--Other available funds with low ER's (<0.50%):
Vanguard Life Strategy Funds: Income (VASIX)/Conservative (VSCGX)/Moderate (VSMGX)/Growth (VASGX) (0.11-0.14%)
Vanguard Intermediate-Term Bond Index (VBILX)(0.07%)
T Rowe Price Retirement Funds: 2010, 2020, 2030, 2040, 2050 (0.34-0.45%)
-His 401k from previous job#2 at Empower:
2.758% Legal & General S&P 500 DC CIT (?) (0.0125%)
-His 401k from previous job#3 at Net Benefits Fidelity:
1.159% S&P 500 Equity Index Fund (FXAIX) (0.015%)
-His Rollover IRA + Traditional IRA at Vanguard:
6.492% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
0.549% Vanguard European Stock Index Fund (VEUSX) (0.13%)
0.426% Vanguard Emerging Markets Index Fund (VEMAX) (0.14%)
-His Roth IRA at Vanguard (for 2024):
0.393% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
-Her 401k from previous job: (Fund selections made at beginning of job in 1999, funds replaced only by custodian a few times)
11.551% Vanguard Institutional Index Fund (VINIX ) (0.02%) (to be changed on 08.01.2024 by custodian to Vanguard S&P 500 Index Fund (VFIAX) (0.015%))
9.637% JP Morgan Large Cap Growth Fund (JLGMX) (0.36%)
1.763% Capital Growth (American Funds?) EuroPacific Growth Fund (RERGX?) (0.41%)
--Other available funds with low ER's:
Vanguard Target Retirement Trusts: (?) (0.075%)
Vanguard FTSE Ex-U.S. All World Index Fund (VFWSX)(0.08%)
Vanguard Wellington Fund (VWENX)(0.18%)
Vanguard Short-Term Federal Fund (VSGDX)(0.10%)
Vanguard Total Bond Market Index (VBTIX)(0.035%)
-Her Traditional IRA at Vanguard:
4.050% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
-Her Traditional IRA at Ally: (Ally will charge $75 to transfer out the funds at maturity and close the account.)
0.372% CD @4.0% matures 04.2027
-Her Roth IRA at Vanguard:
3.493% Vanguard S&P 500 Index Fund (VFIAX) (0.04%)
0.371% Schwab U. S. Large Cap Growth Fund (SCHG) (0.04%)
-Her Roth IRA at Janus Henderson:
0.565% Janus Global Life Sciences Fund (JNGLX)(0.80%)
Contributions:
-His State Pension:
Unfortunately, I have no info other than that deductions are taken from every paycheck and employer match doesn't even begin to partially (50%) vest until past his desired/hopeful retirement age of 60 in about 8 years. (He's been promising to get more details from HR/union)
-His 457(b) pre-tax at Empower: (He just signed up to contribute as of 08.01.24. His paycheck varies depending on available overtime, so we're trying to figure out how much we can afford to contribute per month.)
BlackRock Large Cap Index Fund (?) (0.011%) This is what we've selected.
--Other available funds with low ER's:
Vanguard Wellington Fund (VWENX)(0.18%)
Vanguard Target Retirement Trust II: 2020 to 2070 (?) (0.075%)
BlackRock Non-U.S. Equity Index (?) (0.11%)
BlackRock U.S. Bond Index F Cl (?) (0.04%)
BlackRock Total Return Bond Fund (MAHQX?)(0.20%)
-His 457(b) Roth at Empower: (starting 08.01.2024)
BlackRock Large Cap Index Fund (BRG*X?) (0.011%)
-$8000 His Roth IRA (already contributed above for 2024)
-$8000 Her Roth IRA (same)
Questions:
1. For AA, do we need more bonds even if we have monthly rental income from long-term tenants? Can we allocate more bonds if/when we sell the rental properties or should we be more conservative starting now? DW is hoping to retire in about 8 years.
2. Is it worth rolling over all of our 401k's from previous jobs to IRA's now for the sake of consolidation even if we plan to start converting them to Roth IRA's as soon as we hit 59.5 y.o.? For the most part, we've tried to pick and hold the funds with the cheapest ER's for the old 401k accounts. (One issue that we need to resolve w.r.t. our respective Traditional IRA accounts is that a small fraction of the contributions were made with post-tax funds. We were completely oblivious about pro-rata treatment for taxes if/when converting funds in the IRA to Roth. I realize that this is a whole separate, messy issue that I'm in need of help to figure out.)
3. Where should I start in terms of cleaning up and simplifying our portfolio? I'd like to eliminate both the JP Morgan Large Cap Growth Fund and Capital EuroPacific Growth Funds and have only the Vanguard Institutional Index Fund in her 401k to take advantage of the low ER and buy an international index fund at Vanguard with lower ER. Is this a bad idea to sell these at the moment?
4. I'd like to liquidate both JNGLX and JNGTX in her taxable Janus account and transfer the cash to taxable Vanguard account to buy VTI. Would this be worth paying the resulting taxes?
5. I'd like to sell JNGLX in her Janus Roth IRA and transfer the Roth IRA composed of only cash to Vanguard and buy VTI. I think this would be pretty straightforward, but am I missing something?
6. Would it be better to sell the VFIAX in his and her Vanguard IRA's and replace it with a) a bond fund so that the bonds would be held in tax-advantaged accounts instead of the taxable accounts (as they are currently) and b) an international index fund? Is it better to hold the international index fund in a tax-advantaged account (I vaguely remember reading something about the effects of non-qualified dividends and foreign tax credit somewhere on this forum)?
7. As the T Bills mature, use the cash to buy VTI in taxable Vanguard account?
8. I don't have any excuse for the relatively large portion of cash other than waffling over paying off our mortgage debt or invest in VTI. Any advice either way?
Thank you very much!
Statistics: Posted by Leiho'a — Tue Jul 30, 2024 5:45 am — Replies 0 — Views 72