I just got a new 401k provider at work, so it seems like a good time to shuffle things around. I started out with a sensible savings/retirement plan like 10 years ago, but I’ve let it get a bit messy I think.
Me: 39, single, no kids, no debt except mortgage, upper end of 22% bracket
401k @ Empower (22% total assets)
43% FXAIX (0.015%)
5% VIMAX (0.05%)
5% VSMAX (0.05%)
29% VTMGX (0.07%)
11% VEMAX (0.14%)
11% VBILX (0.07%)
SIMPLE IRA @ American Funds (18% total assets)
100% AALTX (0.75%)
Roth IRA @ Vanguard (41% total assets)
65% VTSAX
22% VTIAX
13% VBTLX
Taxable @ Vanguard (18% total assets)
54% VTSAX
8% VTIAX
7% VMLTX
31% VWITX
HSA (1% total assets)
6 month emergency fund, mix of HYSA & CDs
I did not have a retirement account through work for the first ~6 years I was working, so I maxed out my Roth every year and then put the rest of what would have been retirement contributions into the taxable account. That's why these have a disproportionate amount of money in them. The Roth was set up as a basic 3-fund account, but I've never adjusted the asset allocation since the initial setup.
I was also trying to save up for a house downpayment, that’s what the 2 bond funds were meant for - somehow I landed on that as a good strategy for medium-term savings. I was never really clear with myself how much of the money in the taxable account was for retirement specifically, and what was for the house. I ended up using very little of it to buy the house, and all from one of the bond funds. I don’t really have any other concrete medium-term plans like that, but it’s possible something will come up. I also have a separate short-term/fun money savings account for things like vacations. The taxable account all needs to be reallocated I think, but I'm not sure how. If I sell all the bonds right now, I'm pretty sure they’ll be at a slight loss.
I don’t love the selection of funds that Empower offers, but I don’t hate them either. I’m using every Vanguard/Fidelity fund they offer; the rest are a mix of other funds in the same asset classes as the above with ERs > 0.5% and some target date funds that were what was available from the previous 401k provider. My prior 401k is still in the process of being transferred; all of that is in a target date fund with an ER of 0.07%. I was planning to convert that to the individual index funds once I can.
The HSA is only 2 years old and I actually used it to pay for medical expenses during the year (silly, huh?). I'll be using it for retirement going forward, but currently there isn't enough in it to actually invest.
Right now I am maxing out the Roth and HSA contributions, and not quite all the way at max for the 401k. I haven’t contributed anything to the taxable account for a while, but I do have it automatically reinvesting dividends.
I think it is probably in my best interest to move the SIMPLE IRA due to the high expense ratio. This was from my previous job that I left 3 years ago. From what I understand, I can either roll it into a traditional IRA or into my 401k (Empower allows rollovers, according to their website). I’m not sure which of those 2 options is best. The 401k has a limited selection of funds, and it’s also my 3rd 401k provider in as many years - my company keeps switching them. I’m not a fan of the lack of control. On the other hand, if I understand correctly the presence of a traditional IRA impacts your ability to do a backdoor Roth conversation; I don’t know if that’s something I’d want to do in the future and if I’d be shooting myself in the foot going that route. I’m not really near the income limit at the moment, but I do work in a field that could hypothetically pay me enough to push me over.
The bond funds were supposed to outperform a HYSA and I guess at the time I started them, they did - I think I was getting something like 0.5% banking interest at the time. Now it's more like 5%. I'm not sure what other options are good for savings with a window of ~5 years?
Thoughts?
Me: 39, single, no kids, no debt except mortgage, upper end of 22% bracket
401k @ Empower (22% total assets)
43% FXAIX (0.015%)
5% VIMAX (0.05%)
5% VSMAX (0.05%)
29% VTMGX (0.07%)
11% VEMAX (0.14%)
11% VBILX (0.07%)
SIMPLE IRA @ American Funds (18% total assets)
100% AALTX (0.75%)
Roth IRA @ Vanguard (41% total assets)
65% VTSAX
22% VTIAX
13% VBTLX
Taxable @ Vanguard (18% total assets)
54% VTSAX
8% VTIAX
7% VMLTX
31% VWITX
HSA (1% total assets)
6 month emergency fund, mix of HYSA & CDs
I did not have a retirement account through work for the first ~6 years I was working, so I maxed out my Roth every year and then put the rest of what would have been retirement contributions into the taxable account. That's why these have a disproportionate amount of money in them. The Roth was set up as a basic 3-fund account, but I've never adjusted the asset allocation since the initial setup.
I was also trying to save up for a house downpayment, that’s what the 2 bond funds were meant for - somehow I landed on that as a good strategy for medium-term savings. I was never really clear with myself how much of the money in the taxable account was for retirement specifically, and what was for the house. I ended up using very little of it to buy the house, and all from one of the bond funds. I don’t really have any other concrete medium-term plans like that, but it’s possible something will come up. I also have a separate short-term/fun money savings account for things like vacations. The taxable account all needs to be reallocated I think, but I'm not sure how. If I sell all the bonds right now, I'm pretty sure they’ll be at a slight loss.
I don’t love the selection of funds that Empower offers, but I don’t hate them either. I’m using every Vanguard/Fidelity fund they offer; the rest are a mix of other funds in the same asset classes as the above with ERs > 0.5% and some target date funds that were what was available from the previous 401k provider. My prior 401k is still in the process of being transferred; all of that is in a target date fund with an ER of 0.07%. I was planning to convert that to the individual index funds once I can.
The HSA is only 2 years old and I actually used it to pay for medical expenses during the year (silly, huh?). I'll be using it for retirement going forward, but currently there isn't enough in it to actually invest.
Right now I am maxing out the Roth and HSA contributions, and not quite all the way at max for the 401k. I haven’t contributed anything to the taxable account for a while, but I do have it automatically reinvesting dividends.
I think it is probably in my best interest to move the SIMPLE IRA due to the high expense ratio. This was from my previous job that I left 3 years ago. From what I understand, I can either roll it into a traditional IRA or into my 401k (Empower allows rollovers, according to their website). I’m not sure which of those 2 options is best. The 401k has a limited selection of funds, and it’s also my 3rd 401k provider in as many years - my company keeps switching them. I’m not a fan of the lack of control. On the other hand, if I understand correctly the presence of a traditional IRA impacts your ability to do a backdoor Roth conversation; I don’t know if that’s something I’d want to do in the future and if I’d be shooting myself in the foot going that route. I’m not really near the income limit at the moment, but I do work in a field that could hypothetically pay me enough to push me over.
The bond funds were supposed to outperform a HYSA and I guess at the time I started them, they did - I think I was getting something like 0.5% banking interest at the time. Now it's more like 5%. I'm not sure what other options are good for savings with a window of ~5 years?
Thoughts?
Statistics: Posted by FeyFaye — Thu Feb 08, 2024 9:44 pm — Replies 0 — Views 53