Basic Information:
Emergency funds: Emergency fund fully covered
Debt: Have large mortgage (2.375%)
Tax Filing Status: Married Filing Jointly
Tax Rate: 35%-37% Federal, 11.3%-12.3% CA
State of Residence: CA
Age: Me; Early 50's Retired. Spouse late 40's. Spouse planning to work until 60.
Children: Have two middle school children. We have 529's and UTMAs for them that cover decent % of college. Omitted for simplicity
Desired Asset allocation: Flexible. Somewhere 80%/20% - 85%/15%
Desired International allocation: Flexible. 20-25%
Total Portfolio Size High 7 figures
Pension/Social Security should comfortably cover most of our retirement expenses.
Hi All
I recently diversified some large concentrated positions + sold off some holdings with low cost basis to simplify my portfolio. I'm trying to re-build a portfolio that is
A) Simple
B) Tax-efficient in brokerage accounts/maximizes long term portfolio value.
C) Frugal/has reasonable fees
D) Broadly diversified using best boglehead practices
E) Offloads the need for me to make critical decisions on the portfolio. I don't mind putting in the effort. In fact I've really been enjoying reading through all the boglehead forums + watching Boglehead related YouTube videos. However, my desire to find the "best" solution gets in the way. Results in analysis-paralysis.
Aborted Idea 1) I considered using a robo-advisor (Wealthfront or tax-coordinated capable Betterment). I have a portion of my funds at Wealthfront and have been happy with the performance + tax-lost harvesting + peace-of-mind it has given me for 0.25%. However, fellow bogleheads talked some sense into me. viewtopic.php?p=7696624 I'm now planning to cancel/consolidate my wealthfront holdings into one of my other brokerage accounts. Planning to sell off wealthfront funds with low cost basis (to simplify/reduce holdings). Will keep the rest. The tax harvesting was great the first several years, but has slowed down.
Aborted Idea 2) I considered trying to implement my own 3-5 fund portfolio. However, I'm probably my worst enemy. I end up going in endless circles/rabbit-holes trying to research the optimal asset asset mix + allocation, fund selection, tax placement for my scenario. I research endless model portfolios (e.g. Ferri, Bogleheads, Merriman, Morningstar) but don't have an intuition about which one is better for me. I've also been watching the market going up and reluctant to jump back in (especially since it is potentially costlier to undo changes in a brokerage account). Everything I read tells me that I can not time the market + need to think long term. However, my emotion/intuition gets in the way and can't help waiting for a dip. I've decided it is better for me to delegate lower level investing responsibilities.
Aborted Idea 3) I was attracted to the idea of buying a TDF or LifeStrategy fund across brokerage+ retirement accounts. I read the interesting discussion here viewtopic.php?t=287967&start=650. Ultimately, I'm frugal and decided I'm not willing to pay the tax penalty
Latest idea/strategy:
BROKERAGES (56.25%)
-KEEP (21.94%)Keep existing US stocks/low cost index funds with significant capital gains
-INVEST (34.31%) Buy 75% VTI (ER: 0.03%) , 25% VXUS (ER: 0.07%)
IRAS (21.15%) Sell everything -> Invest in VSMGX (Vanguard LifeStrategy Moderate Growth Fund) 60/40 (ER: 0.13%). Picked the moderate growth option so that the combined Brokerage + IRA stock:bond mix end up at 85%:15%
ROTH (0.99%) Sell everything -> Buy 75% VTI (0.03%) , 25% VXUS (0.07%)
Spouse 401k(21.61%) Sell everything -> Invest in LIPKX Blackrock LifePath Index 2050 Fund K Shares (0.09%). Intentionally picked 2050, which is 10 years later than planned retirement date (~2040). The K Shares have lower fees. Morningstar Gold rated. The 2050 TDF currently has a low percentage of bonds. %Bonds will grow over time. We will continue to contribute to this 401k
The idea is to be hands-off and not make any changes for 20-30 years. Hopefully just let it keep growing. Let the fund managers do their thing. Probably won't bother rebalancing.
I would love to hear honest critique feedback about this approach. Thanks in advance
Emergency funds: Emergency fund fully covered
Debt: Have large mortgage (2.375%)
Tax Filing Status: Married Filing Jointly
Tax Rate: 35%-37% Federal, 11.3%-12.3% CA
State of Residence: CA
Age: Me; Early 50's Retired. Spouse late 40's. Spouse planning to work until 60.
Children: Have two middle school children. We have 529's and UTMAs for them that cover decent % of college. Omitted for simplicity
Desired Asset allocation: Flexible. Somewhere 80%/20% - 85%/15%
Desired International allocation: Flexible. 20-25%
Total Portfolio Size High 7 figures
Pension/Social Security should comfortably cover most of our retirement expenses.
Hi All
I recently diversified some large concentrated positions + sold off some holdings with low cost basis to simplify my portfolio. I'm trying to re-build a portfolio that is
A) Simple
B) Tax-efficient in brokerage accounts/maximizes long term portfolio value.
C) Frugal/has reasonable fees
D) Broadly diversified using best boglehead practices
E) Offloads the need for me to make critical decisions on the portfolio. I don't mind putting in the effort. In fact I've really been enjoying reading through all the boglehead forums + watching Boglehead related YouTube videos. However, my desire to find the "best" solution gets in the way. Results in analysis-paralysis.
Aborted Idea 1) I considered using a robo-advisor (Wealthfront or tax-coordinated capable Betterment). I have a portion of my funds at Wealthfront and have been happy with the performance + tax-lost harvesting + peace-of-mind it has given me for 0.25%. However, fellow bogleheads talked some sense into me. viewtopic.php?p=7696624 I'm now planning to cancel/consolidate my wealthfront holdings into one of my other brokerage accounts. Planning to sell off wealthfront funds with low cost basis (to simplify/reduce holdings). Will keep the rest. The tax harvesting was great the first several years, but has slowed down.
Aborted Idea 2) I considered trying to implement my own 3-5 fund portfolio. However, I'm probably my worst enemy. I end up going in endless circles/rabbit-holes trying to research the optimal asset asset mix + allocation, fund selection, tax placement for my scenario. I research endless model portfolios (e.g. Ferri, Bogleheads, Merriman, Morningstar) but don't have an intuition about which one is better for me. I've also been watching the market going up and reluctant to jump back in (especially since it is potentially costlier to undo changes in a brokerage account). Everything I read tells me that I can not time the market + need to think long term. However, my emotion/intuition gets in the way and can't help waiting for a dip. I've decided it is better for me to delegate lower level investing responsibilities.
Aborted Idea 3) I was attracted to the idea of buying a TDF or LifeStrategy fund across brokerage+ retirement accounts. I read the interesting discussion here viewtopic.php?t=287967&start=650. Ultimately, I'm frugal and decided I'm not willing to pay the tax penalty
Latest idea/strategy:
BROKERAGES (56.25%)
-KEEP (21.94%)Keep existing US stocks/low cost index funds with significant capital gains
-INVEST (34.31%) Buy 75% VTI (ER: 0.03%) , 25% VXUS (ER: 0.07%)
IRAS (21.15%) Sell everything -> Invest in VSMGX (Vanguard LifeStrategy Moderate Growth Fund) 60/40 (ER: 0.13%). Picked the moderate growth option so that the combined Brokerage + IRA stock:bond mix end up at 85%:15%
ROTH (0.99%) Sell everything -> Buy 75% VTI (0.03%) , 25% VXUS (0.07%)
Spouse 401k(21.61%) Sell everything -> Invest in LIPKX Blackrock LifePath Index 2050 Fund K Shares (0.09%). Intentionally picked 2050, which is 10 years later than planned retirement date (~2040). The K Shares have lower fees. Morningstar Gold rated. The 2050 TDF currently has a low percentage of bonds. %Bonds will grow over time. We will continue to contribute to this 401k
The idea is to be hands-off and not make any changes for 20-30 years. Hopefully just let it keep growing. Let the fund managers do their thing. Probably won't bother rebalancing.
I would love to hear honest critique feedback about this approach. Thanks in advance
Statistics: Posted by techdad123 — Mon Feb 12, 2024 12:22 am — Replies 0 — Views 29