Hello Bogleheads, I am new to the forum but was excited to find this community and to learn about the Boglehead philosophy in the past year. I would appreciate a portfolio review and any feedback! Thank you!!
I live a frugal lifestyle, and developed a habit of saving and keeping my expenses minimal early on. In the last year, I realized that I had saved close to 100k in regular savings accounts earning next to nothing all this time, so I’ve since transferred majority of my savings to a HYSA. I also learned about Roth IRA, recently opened one and maxed it out for 2023. Trying to get on the right track with investing.
My main goals are to reach FIRE, or get to a point where I can just work part time as needed and dedicate more time to hobbies/travel. I’m not a big spender, but have increased my discretionary spending as of late since I realized I can definitely afford it. Some goals for next 2-5+ years - buying first home or renting somewhere with more space which would likely increase my rent by 2-3x, get married/wedding, and other spend funds for travel, concerts/collectibles, and supporting family. Haven’t decided if I want kids, but that could also be something to take into account.
I don’t have access to HSA, but employer offers FSA of which I usually allot a small ~$300-$400 yearly and roll over majority each year. I don’t have chronic medical expenses, but it helps lower my taxable income and I use this for all misc medical over the counter purchases.
---
Emergency funds: Yes, 6+ months – in HYSA earning 5% APY
Debt: No debt.
Tax Filing Status: Single
Tax Rate: 12% Federal, 0% State
State of Residence: Texas
Age: 30
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: ~30% of stocks
Portfolio size: ~162k
Expenses: ~$2000 monthly
Current assets
Cash (58%) - 94k![😐]()
--
12% - 20k – CD at 4.95% APY
23% - 36.5k – CD at 4.75% APY
14% - 22k – HYSA at 5.05% APY
9% - 15.5k – regular savings accounts
Traditional 401k at Voya (37%)--
37% E475 Voya Index Solution 2060 Portfolio - Service 2 Class (ER: 0.70%)
Company match? No, but it’s a SafeHarbor Plan so they give 3% regardless of how much I contribute.
Roth IRA at Fidelity (4.5%)--
0.09% Cash
1.26% FIDELITY TOTAL INTL INDEX FUND (FTIHX) (ER: 0.06%)
2.86% FIDELITY 500 INDEX FUND (FXAIX) (ER: 0.015%)
0.13% FIDELITY U.S. BOND INDEX FUND (FXNAX) (ER: 0.025%)
0.12% REALTY INCOME CORP COM (O) (ER: I couldn’t find this?)
0.05% SCHWAB US DIVIDEND EQUITY ETF (SCHD) (ER: 0.06%)
New annual Contributions--
$12,750 (25% of gross income) - 401k + 3% employer safeharbor
$7000 - Plan to max out Roth IRA by end of year
$xx taxable (Plan to open and set up taxable brokerage in Q1 of 2024 after feedback from here)
$400 – FSA, total of $1060 for 2024 of which $640 can roll over into 2025
Available funds in 401(k) -- Voya
Global / International--
MFS® International Intrinsic Value Fund - Class R2 (ER: 1.28%)
Invesco Developing Markets Fund - Class R (ER: 1.49%)
American Funds New Perspective Fund® - Class R-3 (ER: 1.06%)
Invesco Oppenheimer International Growth Fund - Class R (ER: 1.33%)
Small/Mid/Specialty--
VY® CBRE Real Estate Portfolio - Service 2 Class (ER: 1.08%)
VY® Columbia Small Cap Value II Portfolio - Service 2 Class (ER: 1.32%)
VY® JPMorgan Small Cap Core Equity Portfolio - Service 2 (ER: 1.27%)
Voya MidCap Opportunities Portfolio - Class S2 (ER: 1.06%)
Voya Russell™ Mid Cap Index Portfolio - Class S2 (ER: 0.80%)
Neuberger Berman Genesis Fund - Advisor Class ER: (1.34%)
PIMCO CommodityRealReturn Strategy Fund® - Class R (ER: 1.69%)
Victory Sycamore Established Value Fund - Class R (ER: 1.11%)
Bonds--
Voya High Yield Portfolio - Service 2 Class (ER: 0.88%)
AB Global Bond Fund - Class R (ER: 1.25%)
Pioneer Strategic Income Fund - Class R Shares (ER: 1.36%)
Voya Intermediate Bond Portfolio - Class S2 (ER: 0.95%)
PIMCO Real Return Fund - Class R (ER: 1.32%)
Allocation--
MFS® Aggressive Growth Allocation Fund - Class R2 (ER: 1.27%)
MFS® Growth Allocation Fund - Class R2 (ER: 1.21%)
MFS® Moderate Allocation Fund - Class R2 (ER: 1.15%)
Voya Index Solution 2055 Portfolio - Service 2 Class (ER: 0.67%)
Voya Index Solution 2060 Portfolio - Service 2 Class (ER: 0.70%)
Balanced--
VY® T. Rowe Price Capital Appreciation Portfolio- Service 2 (ER: 1.04%)
Large Cap--
Voya Large Cap Growth Portfolio - Service 2 Class (ER: 1.07%)
Voya U.S. Stock Index Portfolio - Service 2 Class (ER: 0.67%)
Invesco Diversified Dividend Fund - Class R (ER: 1.07%)
Questions:
1. 401K - Am I contributing too much to 401K? The target date fund that I’m in is already one of the lowest ER, but it is still fairly high. I think I’m already choosing the best fund available? I Included the available funds to me if anyone has recommendations if I should keep what I have or change. Am I correct in that since it is pre-tax, I would not have tax consequence if I change my fund within the acct? I currently contribute 25% of my gross income to 401K which helps to lower my taxable income and since I am almost between tax brackets, this helps keep me at federal 12%. Since I am not that high an earner (~51K gross), I think it wouldn’t make sense to max out my 401K before contributing to taxable. Would most agree with this?
2. Short term - Am I contributing too much to retirement and not enough for accessible short term? Almost 39% of my gross income is going towards retirement through 401K and Roth. I would like to be able to take out funds if I need them for things in the next 5-10+ years.
3. Roth IRA - I just opened Roth IRA in Oct of 2023 and maxed it, and I plan to max for 2024 as well. Should I lump sum or dollar cost average? I read that lump sum has slightly better returns, but since I am still new to creating my portfolio and choosing funds, I am a little wary of lump sum. For Roth, am I deviating into too many funds? I started with just the 3 fund, but then I read about REITs and dividend etfs being good in a Roth for tax advantaged growth, so I added O and SCHD just in the last month. Also, with there being no tax consequence, I feel more comfortable testing out funds in this account. I’m still learning how a lot of this works.
4. Taxable account – I don’t currently have one but since I have significant cash reserves, I feel like I should open one. I would like to open with Merrill Edge (ME) since I have BofA preferred rewards and would like to increase my status with them.
Right now, ME has an offer for $0 program fee for 6 months for new enrollments. The fee is usually 0.45%. Should I take the Guided approach for 6 months or just go straight to Self Directed. I don’t plan on keeping the Guided program after the Introductory Offer period. If I do the Guided Program first, would this completely mess up my investments from a tax standpoint, if I have to rebalance after 6 months back to a 3 fund portfolio? I’m not sure what is best.
5. Taxable account pt 2- Based on how much available cash I have; how much should I allot to this account? What funds would be recommended? I’m a little confused as to how I pull money out of this account as needed. Do people keep a taxable account just for retirement or for yearly spending too? My capital gains rate would $0, so I would like to be able to take advantage of that. I’ve been reading about qualified vs unqualified dividends, but still confused. Does one have to pay at least some unqualified dividends to make it to the qualified dividend rate? Like I have to hold for at least 1 year and then the capital gains rate would be 0% but what about dividends that I receive within that first year, or if I keep buying? I am considering holding VTI/VOO and SCHD in this account, but I’m a little worried on how taxes work. I would appreciate some educational resources.
6. Any other comments? Thank you!
I live a frugal lifestyle, and developed a habit of saving and keeping my expenses minimal early on. In the last year, I realized that I had saved close to 100k in regular savings accounts earning next to nothing all this time, so I’ve since transferred majority of my savings to a HYSA. I also learned about Roth IRA, recently opened one and maxed it out for 2023. Trying to get on the right track with investing.
My main goals are to reach FIRE, or get to a point where I can just work part time as needed and dedicate more time to hobbies/travel. I’m not a big spender, but have increased my discretionary spending as of late since I realized I can definitely afford it. Some goals for next 2-5+ years - buying first home or renting somewhere with more space which would likely increase my rent by 2-3x, get married/wedding, and other spend funds for travel, concerts/collectibles, and supporting family. Haven’t decided if I want kids, but that could also be something to take into account.
I don’t have access to HSA, but employer offers FSA of which I usually allot a small ~$300-$400 yearly and roll over majority each year. I don’t have chronic medical expenses, but it helps lower my taxable income and I use this for all misc medical over the counter purchases.
---
Emergency funds: Yes, 6+ months – in HYSA earning 5% APY
Debt: No debt.
Tax Filing Status: Single
Tax Rate: 12% Federal, 0% State
State of Residence: Texas
Age: 30
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: ~30% of stocks
Portfolio size: ~162k
Expenses: ~$2000 monthly
Current assets
Cash (58%) - 94k
--12% - 20k – CD at 4.95% APY
23% - 36.5k – CD at 4.75% APY
14% - 22k – HYSA at 5.05% APY
9% - 15.5k – regular savings accounts
Traditional 401k at Voya (37%)--
37% E475 Voya Index Solution 2060 Portfolio - Service 2 Class (ER: 0.70%)
Company match? No, but it’s a SafeHarbor Plan so they give 3% regardless of how much I contribute.
Roth IRA at Fidelity (4.5%)--
0.09% Cash
1.26% FIDELITY TOTAL INTL INDEX FUND (FTIHX) (ER: 0.06%)
2.86% FIDELITY 500 INDEX FUND (FXAIX) (ER: 0.015%)
0.13% FIDELITY U.S. BOND INDEX FUND (FXNAX) (ER: 0.025%)
0.12% REALTY INCOME CORP COM (O) (ER: I couldn’t find this?)
0.05% SCHWAB US DIVIDEND EQUITY ETF (SCHD) (ER: 0.06%)
New annual Contributions--
$12,750 (25% of gross income) - 401k + 3% employer safeharbor
$7000 - Plan to max out Roth IRA by end of year
$xx taxable (Plan to open and set up taxable brokerage in Q1 of 2024 after feedback from here)
$400 – FSA, total of $1060 for 2024 of which $640 can roll over into 2025
Available funds in 401(k) -- Voya
Global / International--
MFS® International Intrinsic Value Fund - Class R2 (ER: 1.28%)
Invesco Developing Markets Fund - Class R (ER: 1.49%)
American Funds New Perspective Fund® - Class R-3 (ER: 1.06%)
Invesco Oppenheimer International Growth Fund - Class R (ER: 1.33%)
Small/Mid/Specialty--
VY® CBRE Real Estate Portfolio - Service 2 Class (ER: 1.08%)
VY® Columbia Small Cap Value II Portfolio - Service 2 Class (ER: 1.32%)
VY® JPMorgan Small Cap Core Equity Portfolio - Service 2 (ER: 1.27%)
Voya MidCap Opportunities Portfolio - Class S2 (ER: 1.06%)
Voya Russell™ Mid Cap Index Portfolio - Class S2 (ER: 0.80%)
Neuberger Berman Genesis Fund - Advisor Class ER: (1.34%)
PIMCO CommodityRealReturn Strategy Fund® - Class R (ER: 1.69%)
Victory Sycamore Established Value Fund - Class R (ER: 1.11%)
Bonds--
Voya High Yield Portfolio - Service 2 Class (ER: 0.88%)
AB Global Bond Fund - Class R (ER: 1.25%)
Pioneer Strategic Income Fund - Class R Shares (ER: 1.36%)
Voya Intermediate Bond Portfolio - Class S2 (ER: 0.95%)
PIMCO Real Return Fund - Class R (ER: 1.32%)
Allocation--
MFS® Aggressive Growth Allocation Fund - Class R2 (ER: 1.27%)
MFS® Growth Allocation Fund - Class R2 (ER: 1.21%)
MFS® Moderate Allocation Fund - Class R2 (ER: 1.15%)
Voya Index Solution 2055 Portfolio - Service 2 Class (ER: 0.67%)
Voya Index Solution 2060 Portfolio - Service 2 Class (ER: 0.70%)
Balanced--
VY® T. Rowe Price Capital Appreciation Portfolio- Service 2 (ER: 1.04%)
Large Cap--
Voya Large Cap Growth Portfolio - Service 2 Class (ER: 1.07%)
Voya U.S. Stock Index Portfolio - Service 2 Class (ER: 0.67%)
Invesco Diversified Dividend Fund - Class R (ER: 1.07%)
Questions:
1. 401K - Am I contributing too much to 401K? The target date fund that I’m in is already one of the lowest ER, but it is still fairly high. I think I’m already choosing the best fund available? I Included the available funds to me if anyone has recommendations if I should keep what I have or change. Am I correct in that since it is pre-tax, I would not have tax consequence if I change my fund within the acct? I currently contribute 25% of my gross income to 401K which helps to lower my taxable income and since I am almost between tax brackets, this helps keep me at federal 12%. Since I am not that high an earner (~51K gross), I think it wouldn’t make sense to max out my 401K before contributing to taxable. Would most agree with this?
2. Short term - Am I contributing too much to retirement and not enough for accessible short term? Almost 39% of my gross income is going towards retirement through 401K and Roth. I would like to be able to take out funds if I need them for things in the next 5-10+ years.
3. Roth IRA - I just opened Roth IRA in Oct of 2023 and maxed it, and I plan to max for 2024 as well. Should I lump sum or dollar cost average? I read that lump sum has slightly better returns, but since I am still new to creating my portfolio and choosing funds, I am a little wary of lump sum. For Roth, am I deviating into too many funds? I started with just the 3 fund, but then I read about REITs and dividend etfs being good in a Roth for tax advantaged growth, so I added O and SCHD just in the last month. Also, with there being no tax consequence, I feel more comfortable testing out funds in this account. I’m still learning how a lot of this works.
4. Taxable account – I don’t currently have one but since I have significant cash reserves, I feel like I should open one. I would like to open with Merrill Edge (ME) since I have BofA preferred rewards and would like to increase my status with them.
Right now, ME has an offer for $0 program fee for 6 months for new enrollments. The fee is usually 0.45%. Should I take the Guided approach for 6 months or just go straight to Self Directed. I don’t plan on keeping the Guided program after the Introductory Offer period. If I do the Guided Program first, would this completely mess up my investments from a tax standpoint, if I have to rebalance after 6 months back to a 3 fund portfolio? I’m not sure what is best.
5. Taxable account pt 2- Based on how much available cash I have; how much should I allot to this account? What funds would be recommended? I’m a little confused as to how I pull money out of this account as needed. Do people keep a taxable account just for retirement or for yearly spending too? My capital gains rate would $0, so I would like to be able to take advantage of that. I’ve been reading about qualified vs unqualified dividends, but still confused. Does one have to pay at least some unqualified dividends to make it to the qualified dividend rate? Like I have to hold for at least 1 year and then the capital gains rate would be 0% but what about dividends that I receive within that first year, or if I keep buying? I am considering holding VTI/VOO and SCHD in this account, but I’m a little worried on how taxes work. I would appreciate some educational resources.
6. Any other comments? Thank you!
Statistics: Posted by epark19 — Fri Jan 26, 2024 6:08 pm — Replies 1 — Views 173