Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Hi all,
35/M/Self-Employed, came into a large windfall recently and decided to go with Vanguard PAS. I'm currently making ~$200-$250k per year, target retirement is 20 years from now (55).
Allocation Before Vanguard PAS:
Roth IRA: $11k, 100% VFIFX
SEP IRA: $225k, 100% VFIFX
Brokerage: $2.3M, 100% Money Market (windfall was recent)
Allocation After Vanguard PAS:
Roth IRA: $11k, 100% VXUS
SEP IRA: $225k, 16% BNDX, 40% BND, 43% VXUS
Brokerage: $2.3M, 37% VXUS, 63% VTI
What do you think? How did my advisor do?
35/M/Self-Employed, came into a large windfall recently and decided to go with Vanguard PAS. I'm currently making ~$200-$250k per year, target retirement is 20 years from now (55).
Allocation Before Vanguard PAS:
Roth IRA: $11k, 100% VFIFX
SEP IRA: $225k, 100% VFIFX
Brokerage: $2.3M, 100% Money Market (windfall was recent)
Allocation After Vanguard PAS:
Roth IRA: $11k, 100% VXUS
SEP IRA: $225k, 16% BNDX, 40% BND, 43% VXUS
Brokerage: $2.3M, 37% VXUS, 63% VTI
What do you think? How did my advisor do?
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
It seems like Vanguard Digital Advisor would have put you in the same thing for half the fee.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Looks goodFIREGuy88 wrote: ↑Mon Mar 22, 2021 6:15 pm Hi all,
35/M/Self-Employed, came into a large windfall recently and decided to go with Vanguard PAS. I'm currently making ~$200-$250k per year, target retirement is 20 years from now (55).
Allocation Before Vanguard PAS:
Roth IRA: $11k, 100% VFIFX
SEP IRA: $225k, 100% VFIFX
Brokerage: $2.3M, 100% Money Market (windfall was recent)
Allocation After Vanguard PAS:
Roth IRA: $11k, 100% VXUS
SEP IRA: $225k, 16% BNDX, 40% BND, 43% VXUS
Brokerage: $2.3M, 37% VXUS, 63% VTI
What do you think? How did my advisor do?
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
-
- Posts: 2241
- Joined: Fri Oct 19, 2012 11:24 am
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
It’s probably fine for your age, but if my head math is working is that about 95/5 equity/fixed income? And about 60/40 domestic to intl? I would probably do more in fixed income and also maybe a little heavier domestic. But without knowing your other details (mortgage, etc), it’s a fine enough allocation.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
That's not awful--but you should probably be holding more bonds. We're living through frothy times. When the you-know-what hits the fan--and it will, one day--you're going to want what Jack Bogle called an "anchor to wind" (ie, some fixed-income investments).
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Yes. You could say that about literally any financial advisor, but yes you are correct.anon_investor wrote: ↑Mon Mar 22, 2021 6:35 pm +1. You could have also set this up yourself at no cost, but what they put you in is perfectly fine.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I thought you had $7M ? What did you do with the rest of it? If you've chosen to hire Vanguard, you should probably trust them.
viewtopic.php?p=5801997#p5801997
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Thanks.RubyTuesday wrote: ↑Mon Mar 22, 2021 6:37 pm It’s probably fine for your age, but if my head math is working is that about 95/5 equity/fixed income? And about 60/40 domestic to intl? I would probably do more in fixed income and also maybe a little heavier domestic. But without knowing your other details (mortgage, etc), it’s a fine enough allocation.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
You posted that it was in a MM account. Why isn't a MM account liquid?
For the ashes of his fathers, And the temples of his gods. |
Pensions= 2X yearly expenses. Portfolio= 40X yearly expenses.
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
As you mentioned in above, you are using PAS for behavioral reasons going forward. To clarify, how PAS has set up your asset allocation and location are perfectly fine (also my comment was more to the fact that their set up was simple enough that you could easily do it yourself, which is a good thing). I do like how they have you set up tax efficently with all the fixed income in your SEP IRA.FIREGuy88 wrote: ↑Mon Mar 22, 2021 7:01 pmYes. You could say that about literally any financial advisor, but yes you are correct.anon_investor wrote: ↑Mon Mar 22, 2021 6:35 pm +1. You could have also set this up yourself at no cost, but what they put you in is perfectly fine.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
This guy went into my post history for some reason and saw that I recently came into a $7M windfall. Of that $7M, about $2M has recently gone into the money market, which is liquid. The rest is illiquid.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
This was really helpful, thank you. Yes, they re-did my tax allocation in a way that I wasn't understanding, even with all this research. I'm happy with them so far.anon_investor wrote: ↑Mon Mar 22, 2021 8:20 pm As you mentioned in above, you are using PAS for behavioral reasons going forward. To clarify, how PAS has set up your asset allocation and location are perfectly fine (also my comment was more to the fact that their set up was simple enough that you could easily do it yourself, which is a good thing). I do like how they have you set up tax efficently with all the fixed income in your SEP IRA.
I've also found that I've just been too insecure to pull the trigger. I like that Vanguard PAS will just hit the buy button for me because I'm too nervous and too much of a disaster to do it myself.
- Sandtrap
- Posts: 19591
- Joined: Sat Nov 26, 2016 5:32 pm
- Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Have you considered a more conservative allocation of from 70:30 to 60:40??
Why?
Why not?
Curious
j
Why?
Why not?
Curious
j
-
- Posts: 1145
- Joined: Mon Feb 18, 2019 7:32 am
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I would put a minimum 25% in bonds.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
FWIW, I doubt that it was malicious. You've made a few different posts on similar topics, and OG Bogleheads like to make sure that they have a complete picture before providing advice or feedback on a portfolio. That's why people recommend using the Asking Portfolio Questions format.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I haven't, no. I haven't considered anything actually. Just posting what the Vanguard PAS guy said and looking for feedback.
Is that your recommendation? To tell him to reduce international exposure?
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Those are good reasons to use PAS. Not everyone wants to nerd out on some of these finer points, and that is okay. Do you think at some point you might try to DIY? The good thing is they have you in a simple portfolio that you could take the reins over if you wanted to one day. Don't let someone convince in you in the future you need to get more complicated. The one question is, does PAS help you to do any tax loss harvesting?FIREGuy88 wrote: ↑Mon Mar 22, 2021 8:30 pmThis was really helpful, thank you. Yes, they re-did my tax allocation in a way that I wasn't understanding, even with all this research. I'm happy with them so far.anon_investor wrote: ↑Mon Mar 22, 2021 8:20 pm As you mentioned in above, you are using PAS for behavioral reasons going forward. To clarify, how PAS has set up your asset allocation and location are perfectly fine (also my comment was more to the fact that their set up was simple enough that you could easily do it yourself, which is a good thing). I do like how they have you set up tax efficently with all the fixed income in your SEP IRA.
I've also found that I've just been too insecure to pull the trigger. I like that Vanguard PAS will just hit the buy button for me because I'm too nervous and too much of a disaster to do it myself.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I have been doing DIY since 2012, and I have managed to mess up and make the wrong decision every single chance I couldanon_investor wrote: ↑Mon Mar 22, 2021 8:52 pm
Those are good reasons to use PAS. Not everyone wants to nerd out on some of these finer points, and that is okay. Do you think at some point you might try to DIY? The good thing is they have you in a simple portfolio that you could take the reins over if you wanted to one day. Don't let someone convince in you in the future you need to get more complicated. The one question is, does PAS help you to do any tax loss harvesting?
Luckily, the stakes were low, with only ~$30k-$100k invested. Now that I've received a windfall, it's not about doing it DIY to save $10,000, it's about not crashing the car.
-
- Posts: 1145
- Joined: Mon Feb 18, 2019 7:32 am
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Whats with all the international stock fund allocation? I would do 90% stock (45% VG s&p 500 and 45% VG Equity Income) and 10% short term treasuries or cash. Bonds are not a smart investment at this point.
-
- Posts: 10433
- Joined: Mon May 18, 2009 5:57 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
It's about 40% of stocks. Very reasonable and what Vanguard, Fidelity, and BlackRock all use in their target and life cycle funds.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
OP is young and still has a high income. There's no reason to take that much off the table with a 20-year horizon.Escapevelocity wrote: ↑Mon Mar 22, 2021 9:04 pm Yes considering i had already won the game and also that having secured that 25% I would be sleeping well at night. What is the counter argument to that? Just to pile up more unneeded assets for the hell of it?
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
. Knowing your own limitations is half the battle!FIREGuy88 wrote: ↑Mon Mar 22, 2021 9:02 pmI have been doing DIY since 2012, and I have managed to mess up and make the wrong decision every single chance I couldanon_investor wrote: ↑Mon Mar 22, 2021 8:52 pm
Those are good reasons to use PAS. Not everyone wants to nerd out on some of these finer points, and that is okay. Do you think at some point you might try to DIY? The good thing is they have you in a simple portfolio that you could take the reins over if you wanted to one day. Don't let someone convince in you in the future you need to get more complicated. The one question is, does PAS help you to do any tax loss harvesting?
Luckily, the stakes were low, with only ~$30k-$100k invested. Now that I've received a windfall, it's not about doing it DIY to save $10,000, it's about not crashing the car.
-
- Posts: 2212
- Joined: Tue May 21, 2013 8:49 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
To add more context, that's to increase the allocation to bonds and have less in stocks. This adds more "ballast" to stabilize your portfolio during downturns. While the expected overall return is less (less risk means less reward), most people find they have less risk tolerance than they thought they had. You don't want to be in a position where you have to (panic-)sell during a downturn b/c you simply can't afford to lose more.
One rule of thumb is age-in-bonds. A more aggressive rule is (age-10) in bonds. And these are for a typical age 65 retirement. Most target date funds go much higher and might be 90-95% in stocks at your age, figuring that maximizes returns and that people in a target date fund really won't withdraw before that date.
Since you've already got a huge nest egg, and are looking at an earlier retirement, and have a past history of making behavioral mistakes, there's a strong case to cut back on stocks. The risk-reward curve isn't necessarily *that* different between 40% stocks to 70% in stocks. Going higher is arguably a lot more risky -- your expected returns go up a little bit, but the amount your portfolio might droop is a lot more scary.
-
- Posts: 1145
- Joined: Mon Feb 18, 2019 7:32 am
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
To what end?drk wrote: ↑Mon Mar 22, 2021 9:09 pmOP is young and still has a high income. There's no reason to take that much off the table with a 20-year horizon.Escapevelocity wrote: ↑Mon Mar 22, 2021 9:04 pm Yes considering i had already won the game and also that having secured that 25% I would be sleeping well at night. What is the counter argument to that? Just to pile up more unneeded assets for the hell of it?
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
If you're comfortable with what Vanguard PAS put you in then I would leave it alone.
You're going to get all sorts of recommendations from this thread. Don't start letting some odd ball recommendations make you second guess what PAS set you up with. It will drive you crazy.
Stick to the PAS plan. It looks good and you'll be fine.
You're going to get all sorts of recommendations from this thread. Don't start letting some odd ball recommendations make you second guess what PAS set you up with. It will drive you crazy.
Stick to the PAS plan. It looks good and you'll be fine.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
-
- Posts: 10433
- Joined: Mon May 18, 2009 5:57 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Absolutely.lostdog wrote: ↑Mon Mar 22, 2021 9:26 pm If you're comfortable with what Vanguard PAS put you in then I would leave it alone.
You're going to get all sorts of recommendations from this thread. Don't start letting some odd ball recommendations make you second guess what PAS set you up with. It will drive you crazy.
Stick to the PAS plan. It looks good and you'll be fine.
You're paying them for a reason. Let them do what you're paying them to do.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
That depends on the OP's goals (e.g., extravagant spending, pet projects, philanthropy). The question could fairly be posed to your suggestion of 25% bonds, too.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
-
- Posts: 3145
- Joined: Mon Mar 04, 2019 8:52 am
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Being wrong compounds forever.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Completely agree. Too many Bogleheads in this thread are second-guessing the PAS plan but not explaining that their recommendations aren't better or worse, they're just different, and maybe more suitable to them - but maybe not to you. If you're going to tweak the PAS recommendation, there's no point in paying for it.Triple digit golfer wrote: ↑Mon Mar 22, 2021 9:27 pmAbsolutely.lostdog wrote: ↑Mon Mar 22, 2021 9:26 pm If you're comfortable with what Vanguard PAS put you in then I would leave it alone.
You're going to get all sorts of recommendations from this thread. Don't start letting some odd ball recommendations make you second guess what PAS set you up with. It will drive you crazy.
Stick to the PAS plan. It looks good and you'll be fine.
You're paying them for a reason. Let them do what you're paying them to do.
-
- Posts: 1145
- Joined: Mon Feb 18, 2019 7:32 am
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I wouldn’t pay it. They probably spent 5 minutes working it up.
-
- Posts: 2212
- Joined: Tue May 21, 2013 8:49 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Yes, presumably OP has had a long conversation discussing their tolerance for losses, and upcoming financial milestones. Risk tolerance will depend on whether there are major expenditures coming up: house downpayment, college tuition, other needed spending. Also OP's spending budget and required expenditures relative to emergency fund size and job stability. The PAS portfolio certainly looks reasonable, and could be perfect for an investor. There's not enough info to say whether it's a good fit for FIREGuy88. Quite frankly, I don't know enough about PAS to have confidence that they have talked to him enough to determine that it's a good personalized fit.tibbitts wrote: ↑Mon Mar 22, 2021 9:53 pmCompletely agree. Too many Bogleheads in this thread are second-guessing the PAS plan but not explaining that their recommendations aren't better or worse, they're just different, and maybe more suitable to them - but maybe not to you. If you're going to tweak the PAS recommendation, there's no point in paying for it.Triple digit golfer wrote: ↑Mon Mar 22, 2021 9:27 pmAbsolutely.lostdog wrote: ↑Mon Mar 22, 2021 9:26 pm If you're comfortable with what Vanguard PAS put you in then I would leave it alone.
You're going to get all sorts of recommendations from this thread. Don't start letting some odd ball recommendations make you second guess what PAS set you up with. It will drive you crazy.
Stick to the PAS plan. It looks good and you'll be fine.
You're paying them for a reason. Let them do what you're paying them to do.
I do see that this is a pretty aggressive equity-heavy portfolio with very little in bonds. And I've seen that people tend to be overly confident about their risk tolerance when markets are at all-time highs. If these funds absolutely won't be withdrawn for 20 years, even if the stock market goes down 60%, and if his business dries up. I'm not getting the sense that FireGuy88 has nerves of steel...
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I'm guessing half of everyone is commenting based on $2.x million and I'm not even sure if the OP understands if he has or will have $2.x million, 7 million, or some other amount. We don't know what he told PAS about that. But really the point is that once the OP went with PAS, while it's okay to ask if the recommendation is reasonable, it doesn't help the OP for everybody to be saying "well yes but you should have less international", or "well yes but you should have more bonds", etc. We have a significant "why not 100% stock?" crowd around here, so maybe 95% isn't enough - and I don't think those people have nerves of steel either. Hopefully PAS will supply the OP with any necessary nerves, and I think it's harmful for the OP to get into the habit of questioning every decision PAS makes, because that would undermine PAS in helping the OP stick with its allocation.random_walker_77 wrote: ↑Mon Mar 22, 2021 10:04 pmYes, presumably OP has had a long conversation discussing their tolerance for losses, and upcoming financial milestones. Risk tolerance will depend on whether there are major expenditures coming up: house downpayment, college tuition, other needed spending. Also OP's spending budget and required expenditures relative to emergency fund size and job stability. The PAS portfolio certainly looks reasonable, and could be perfect for an investor. There's not enough info to say whether it's a good fit for FIREGuy88. Quite frankly, I don't know enough about PAS to have confidence that they have talked to him enough to determine that it's a good personalized fit.tibbitts wrote: ↑Mon Mar 22, 2021 9:53 pmCompletely agree. Too many Bogleheads in this thread are second-guessing the PAS plan but not explaining that their recommendations aren't better or worse, they're just different, and maybe more suitable to them - but maybe not to you. If you're going to tweak the PAS recommendation, there's no point in paying for it.Triple digit golfer wrote: ↑Mon Mar 22, 2021 9:27 pmAbsolutely.lostdog wrote: ↑Mon Mar 22, 2021 9:26 pm If you're comfortable with what Vanguard PAS put you in then I would leave it alone.
You're going to get all sorts of recommendations from this thread. Don't start letting some odd ball recommendations make you second guess what PAS set you up with. It will drive you crazy.
Stick to the PAS plan. It looks good and you'll be fine.
You're paying them for a reason. Let them do what you're paying them to do.
I do see that this is a pretty aggressive equity-heavy portfolio with very little in bonds. And I've seen that people tend to be overly confident about their risk tolerance when markets are at all-time highs. If these funds absolutely won't be withdrawn for 20 years, even if the stock market goes down 60%, and if his business dries up. I'm not getting the sense that FireGuy88 has nerves of steel...
Last edited by tibbitts on Tue Mar 23, 2021 9:41 am, edited 1 time in total.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Extremely helpful. Thank you!
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I think this is fine. I've tended to lean a bit more to international, but I'm not convinced enough about that to argue that someone else should. I think your bond allocation is reasonable for your age, I could see bumping it up a bit, but at that age I probably had less.
My only ??? is BNDX. I am not convinced that hedged international bond exposure is worth the effort for people in the US, mostly because the USD dominates the world. But I'm also over time becoming less and less convinced about corporate debt, too. Anyhow, I'd prefer to have some inflation-protected bonds before adding international bonds.
My layup would probably look like:
80/20 or 85/15 stock/bond
in stock, 55/45 or 60/40 US/intl (for US investors), using VTI and VXUS
in bond, 50/50 nominal/inflation-protected
in bond, mostly intermediate-term Treasury securities or broad indices, ~6 year duration
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Interesting perspective. Thank you.shess wrote: ↑Tue Mar 23, 2021 3:45 am
My only ??? is BNDX. I am not convinced that hedged international bond exposure is worth the effort for people in the US, mostly because the USD dominates the world. But I'm also over time becoming less and less convinced about corporate debt, too. Anyhow, I'd prefer to have some inflation-protected bonds before adding international bonds.
My layup would probably look like:
80/20 or 85/15 stock/bond
in stock, 55/45 or 60/40 US/intl (for US investors), using VTI and VXUS
in bond, 50/50 nominal/inflation-protected
in bond, mostly intermediate-term Treasury securities or broad indices, ~6 year duration
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
He needs some walking around money in case he sees something he likes.
Outside a dog, a book is man's best friend, inside a dog, it's too dark to read - Groucho
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
One last time, stick with the PAS plan.
If you're planning on undermining them based on recommendations here, they might ask you to leave out of annoyance and you might as well do it yourself.
If you're planning on undermining them based on recommendations here, they might ask you to leave out of annoyance and you might as well do it yourself.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
-
- Posts: 11259
- Joined: Wed Feb 01, 2017 7:39 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Fine. View your por
Also OP, stop viewing portfolio as a separate allocation in each account, but as one full portfolio.
+1 I like this layup. Corporate debt is inefficient, just hold treasuries and tilt a bit more to equities. Barbell of short-term treasuries and long-term nominal treasuries is another option, or intermediate for each as noted. I wouldn't pay PAS to implement this myself. I personally tilt strongly to value/quality/size as well, but that is another story.shess wrote: ↑Tue Mar 23, 2021 3:45 amI think this is fine. I've tended to lean a bit more to international, but I'm not convinced enough about that to argue that someone else should. I think your bond allocation is reasonable for your age, I could see bumping it up a bit, but at that age I probably had less.
My only ??? is BNDX. I am not convinced that hedged international bond exposure is worth the effort for people in the US, mostly because the USD dominates the world. But I'm also over time becoming less and less convinced about corporate debt, too. Anyhow, I'd prefer to have some inflation-protected bonds before adding international bonds.
My layup would probably look like:
80/20 or 85/15 stock/bond
in stock, 55/45 or 60/40 US/intl (for US investors), using VTI and VXUS
in bond, 50/50 nominal/inflation-protected
in bond, mostly intermediate-term Treasury securities or broad indices, ~6 year duration
Also OP, stop viewing portfolio as a separate allocation in each account, but as one full portfolio.
-
- Posts: 10433
- Joined: Mon May 18, 2009 5:57 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
I wouldn't pay $7,500 a year for a service unless I was confident in the work they're doing.
It's like hiring a roofing contractor and then going on a DIY forum and asking for suggestions on shingle types and drip edges after the roofer finished the job and just put on a really nice brand new roof.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Since investment strategies start with goals (and risk tolerance) and we do not know yours, other than retirement in 20 years, it is hard to say much other than it seems to look fine.
You have quite a bit of money in taxable and it sounds like more to come. Once you get an asset allocation that you are comfortable with, I would shift my focus to a tax strategy for the long haul. There is the potential/likelihood of future tax increases on wealth and taxable accounts will be easier to tax than retirement plans IMO.
The plan might call for increasing your bond holdings as you find ways to shift your taxable $$ into retirement accounts. It might include muni bonds at some point based on your regular income. But that can all be sorted out as your develop a more refined tax strategy.
You have quite a bit of money in taxable and it sounds like more to come. Once you get an asset allocation that you are comfortable with, I would shift my focus to a tax strategy for the long haul. There is the potential/likelihood of future tax increases on wealth and taxable accounts will be easier to tax than retirement plans IMO.
The plan might call for increasing your bond holdings as you find ways to shift your taxable $$ into retirement accounts. It might include muni bonds at some point based on your regular income. But that can all be sorted out as your develop a more refined tax strategy.
I own the next hot stock- VTSAX
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
This was great, thank you.WhyNotUs wrote: ↑Tue Mar 23, 2021 8:48 am Since investment strategies start with goals (and risk tolerance) and we do not know yours, other than retirement in 20 years, it is hard to say much other than it seems to look fine.
You have quite a bit of money in taxable and it sounds like more to come. Once you get an asset allocation that you are comfortable with, I would shift my focus to a tax strategy for the long haul. There is the potential/likelihood of future tax increases on wealth and taxable accounts will be easier to tax than retirement plans IMO.
The plan might call for increasing your bond holdings as you find ways to shift your taxable $$ into retirement accounts. It might include muni bonds at some point based on your regular income. But that can all be sorted out as your develop a more refined tax strategy.
-
- Posts: 1285
- Joined: Sun Sep 04, 2016 5:16 pm
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Sounds like a really good decision to use PAS and to stick with that plan.FIREGuy88 wrote: ↑Mon Mar 22, 2021 9:02 pmI have been doing DIY since 2012, and I have managed to mess up and make the wrong decision every single chance I couldanon_investor wrote: ↑Mon Mar 22, 2021 8:52 pm
Those are good reasons to use PAS. Not everyone wants to nerd out on some of these finer points, and that is okay. Do you think at some point you might try to DIY? The good thing is they have you in a simple portfolio that you could take the reins over if you wanted to one day. Don't let someone convince in you in the future you need to get more complicated. The one question is, does PAS help you to do any tax loss harvesting?
Luckily, the stakes were low, with only ~$30k-$100k invested. Now that I've received a windfall, it's not about doing it DIY to save $10,000, it's about not crashing the car.
Curious - will you do things like Backdoor Roth going forward every year in addition to maximizing your SEP savings through work?
Kind of "worth it" to do the backdoor roth but it's small potatoes compared to your networth.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
Very good plan for a young, rich, adventurous person! Put your future millions in at the same ratios... well, maybe discuss the BNDX alternatives, but really it's a good plan for you-as-seen-Bogleheads.
Then, don't look at your portfolio for 15 years. Ignore the noise, especially Headlines of Doom. Buy a house if you want, even in Manhattan or SF. At age 50, get a check-up for a possible change in asset allocation.
Congratulations!
Then, don't look at your portfolio for 15 years. Ignore the noise, especially Headlines of Doom. Buy a house if you want, even in Manhattan or SF. At age 50, get a check-up for a possible change in asset allocation.
Congratulations!
Ipsa scientia potestas est. Bacon F.
Re: Huge Windfall + Vanguard PAS, Here's What They Allocated For Me
+1. Right on the $money$ lostdog.lostdog wrote: ↑Mon Mar 22, 2021 9:26 pm If you're comfortable with what Vanguard PAS put you in then I would leave it alone.
You're going to get all sorts of recommendations from this thread. Don't start letting some odd ball recommendations make you second guess what PAS set you up with. It will drive you crazy.
Stick to the PAS plan. It looks good and you'll be fine.
Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion