Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
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Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
Hi All!
I’m looking for a critique on an potential investing plan:
As a quick overview, after a house sale:
I currently have 410k in non-retirement accounts.
I have an additional 236k in retirement accounts.
Total of 646k
I'd like to leave 20k cash out of the investing plan as emergency savings. Which opens me up to 626k to be used in the investing plan.
Overall thoughts:
Gains Taxes on home sale are paid. No plans to buy another house. I’m single and plan to stay flexible with month to month housing situations—currently in a rent stabilized situation. My job in the media sector pays well, but I don’t know if it will last another decade so the savings I’m doing now and my current nest egg are important.
Emergency funds: 20k in Savings
Debt: 0 Debt
Tax Filing Status: Single
Tax Rate: 24% Federal, 10.37% State/City
State of Residence: NY
Age: 34
Desired Asset allocation: 75% stocks / 20% bonds / 5% crypto
Desired International allocation: 25% of stocks
_____________________________
Contributions:
New annual Contributions:
I am currently Maxing out 401k Every Year (19.5k this year) Company adds additional 6k / year.
AKA 25.5k should go into my retirement account this year. My income was just over the limit for contributing to ROTH accounts.
I'm currently able to save roughly an additional $4,000 a month that currently goes into savings account. But I could set up an automatic transfer above my 20k cash savings emergency fund to transfer into my taxable investment account.
All money will be held in Vanguard brokerages or IRAs where I have unlimited investing options, EXCEPT for my current job’s 401k which only offers 20 choices, and currently 168k of the 626 (26.8%) sits in that account.
Available funds:
Funds available in company 401(k)
By far the lowest cost funds out of my 20 choices:
VINIX -- Vanguard Institutional Index -- .04% (tracks S&P)
VIMAX -- Vanguard Mid Cap Index Adm -- .05%
VSMAX -- Vanguard Small Cap Index Adm -- .05%
VTMGX -- Vanguard Developed Markets Idx Admiral -- .07%
JFFQX -- JPMorgan SmartRetirement 2055 Fund Class R4 -- .76%
Possible Bond Choices: (NONE LOW COST)
AGDZX -- AB High Income Fund Class Z -- .54%
PGIQX -- PGIM Government Income Fund - Class R6 -- .57%
TGCFX -- TCW Core Fixed Income Fund Class Institutional -- .51%
There is a "Guaranteed Income Fund" that is a stable value fund designed to provide safety of principal, liquidity, and a competitive rate of return. All kinds of bonds. From Prudential Retirement Insurance and Annuity company, but doesn't have a trading symbol.
Other options include
RLEFX –- American Funds American Balanced R5E -- .41%
FANIX –- Fidelity Advisor Energy I -- .82%
DDFIX –- Invesco Diversified Dividend R5 -- .52%
JDMAX –- Janus Enterprise A –- 1.16%
OIGYX –- Oppenheimer International Growth Y -- .85%
PGIQX -- Prudential Jennison Growth Z -- .69%
SA/Invesco Small Cap Growth Strategy -- .81%
Small Cap Value / Victory Fund -- .86%
Large Cap Growth I Fund (managed by T. Rowe Price) -- .52%
Mid Cap Value / Robeco Boston Partners Fund -- .71%
______________________________________
Non-Retirement Funds will be held in taxable Vanguard Brokerage:
Unlimited Options for Investments, but the highlights:
VTSAX -- Total Stock Market Index Adm Shares -- .04%
VTIAX -- Total International Stock Index Fund Adm Shares -- .11%
VBTLX -- Total Bond Market Index Fund Admiral Shares -- .05%
VTABX -- Total International Bond Index Admiral Shares -- .11%
VTTSX -- Target Retirement 2060 Fund -- .15%
VBIAX -- Balanced Index Fund Adm Shares -- .07%
(60 stocks / 40 bonds)
VWELX -- Wellington Fund Investor Shares -- .25%
(66 stocks / 33 bonds)
______________________________________
Desired Asset allocation: 75% stocks / 20% bonds / 5% crypto
Desired International allocation: 25% of stocks
390k non-retirement / 236k retirement = 626
75% stocks equals 469.5k
(US Stocks: 352k // International 117k)
20% bonds equals 125.2k
5% crypto equals 31.3k
(half ETH / half BTC)
Questions:
I’m inviting all thoughts, advice, and critiques.
But my main question is this:
Any recommendations on what funds to choose and how you would divvy this up between non-retirement and retirement accounts? Could someone help me create a plan based on my numbers and the available funds?
And playing devils advocate--I’m a bit concerned that the markets are frothy. Is my asset allocation crazy given the current state of the markets?
Yes, I’d like to sleep at night, but I also am not anticipating needing this money for anything in my life, anytime soon. No plans to move, get a masters degree, big purchases, etc. Sure I could meet someone to marry, lose my job, get in an accident, but nothing expected on horizon.
I’m looking for a critique on an potential investing plan:
As a quick overview, after a house sale:
I currently have 410k in non-retirement accounts.
I have an additional 236k in retirement accounts.
Total of 646k
I'd like to leave 20k cash out of the investing plan as emergency savings. Which opens me up to 626k to be used in the investing plan.
Overall thoughts:
Gains Taxes on home sale are paid. No plans to buy another house. I’m single and plan to stay flexible with month to month housing situations—currently in a rent stabilized situation. My job in the media sector pays well, but I don’t know if it will last another decade so the savings I’m doing now and my current nest egg are important.
Emergency funds: 20k in Savings
Debt: 0 Debt
Tax Filing Status: Single
Tax Rate: 24% Federal, 10.37% State/City
State of Residence: NY
Age: 34
Desired Asset allocation: 75% stocks / 20% bonds / 5% crypto
Desired International allocation: 25% of stocks
_____________________________
Contributions:
New annual Contributions:
I am currently Maxing out 401k Every Year (19.5k this year) Company adds additional 6k / year.
AKA 25.5k should go into my retirement account this year. My income was just over the limit for contributing to ROTH accounts.
I'm currently able to save roughly an additional $4,000 a month that currently goes into savings account. But I could set up an automatic transfer above my 20k cash savings emergency fund to transfer into my taxable investment account.
All money will be held in Vanguard brokerages or IRAs where I have unlimited investing options, EXCEPT for my current job’s 401k which only offers 20 choices, and currently 168k of the 626 (26.8%) sits in that account.
Available funds:
Funds available in company 401(k)
By far the lowest cost funds out of my 20 choices:
VINIX -- Vanguard Institutional Index -- .04% (tracks S&P)
VIMAX -- Vanguard Mid Cap Index Adm -- .05%
VSMAX -- Vanguard Small Cap Index Adm -- .05%
VTMGX -- Vanguard Developed Markets Idx Admiral -- .07%
JFFQX -- JPMorgan SmartRetirement 2055 Fund Class R4 -- .76%
Possible Bond Choices: (NONE LOW COST)
AGDZX -- AB High Income Fund Class Z -- .54%
PGIQX -- PGIM Government Income Fund - Class R6 -- .57%
TGCFX -- TCW Core Fixed Income Fund Class Institutional -- .51%
There is a "Guaranteed Income Fund" that is a stable value fund designed to provide safety of principal, liquidity, and a competitive rate of return. All kinds of bonds. From Prudential Retirement Insurance and Annuity company, but doesn't have a trading symbol.
Other options include
RLEFX –- American Funds American Balanced R5E -- .41%
FANIX –- Fidelity Advisor Energy I -- .82%
DDFIX –- Invesco Diversified Dividend R5 -- .52%
JDMAX –- Janus Enterprise A –- 1.16%
OIGYX –- Oppenheimer International Growth Y -- .85%
PGIQX -- Prudential Jennison Growth Z -- .69%
SA/Invesco Small Cap Growth Strategy -- .81%
Small Cap Value / Victory Fund -- .86%
Large Cap Growth I Fund (managed by T. Rowe Price) -- .52%
Mid Cap Value / Robeco Boston Partners Fund -- .71%
______________________________________
Non-Retirement Funds will be held in taxable Vanguard Brokerage:
Unlimited Options for Investments, but the highlights:
VTSAX -- Total Stock Market Index Adm Shares -- .04%
VTIAX -- Total International Stock Index Fund Adm Shares -- .11%
VBTLX -- Total Bond Market Index Fund Admiral Shares -- .05%
VTABX -- Total International Bond Index Admiral Shares -- .11%
VTTSX -- Target Retirement 2060 Fund -- .15%
VBIAX -- Balanced Index Fund Adm Shares -- .07%
(60 stocks / 40 bonds)
VWELX -- Wellington Fund Investor Shares -- .25%
(66 stocks / 33 bonds)
______________________________________
Desired Asset allocation: 75% stocks / 20% bonds / 5% crypto
Desired International allocation: 25% of stocks
390k non-retirement / 236k retirement = 626
75% stocks equals 469.5k
(US Stocks: 352k // International 117k)
20% bonds equals 125.2k
5% crypto equals 31.3k
(half ETH / half BTC)
Questions:
I’m inviting all thoughts, advice, and critiques.
But my main question is this:
Any recommendations on what funds to choose and how you would divvy this up between non-retirement and retirement accounts? Could someone help me create a plan based on my numbers and the available funds?
And playing devils advocate--I’m a bit concerned that the markets are frothy. Is my asset allocation crazy given the current state of the markets?
Yes, I’d like to sleep at night, but I also am not anticipating needing this money for anything in my life, anytime soon. No plans to move, get a masters degree, big purchases, etc. Sure I could meet someone to marry, lose my job, get in an accident, but nothing expected on horizon.
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
In your 401k, for stocks, take the following to make U.S. total stock.
VINIX -- Vanguard Institutional Index -- .04% (tracks S&P)
VIMAX -- Vanguard Mid Cap Index Adm -- .05%
VSMAX -- Vanguard Small Cap Index Adm -- .05%
Don’t know about the fixed income funds listed.
I personally would use the following for taxable
VTIAX -- Total International Stock Index Fund Adm Shares -- .11%
VBTLX -- Total Bond Market Index Fund Admiral Shares -- .05%
VTABX -- Total International Bond Index Admiral Shares -- .11%
Good luck!
VINIX -- Vanguard Institutional Index -- .04% (tracks S&P)
VIMAX -- Vanguard Mid Cap Index Adm -- .05%
VSMAX -- Vanguard Small Cap Index Adm -- .05%
Don’t know about the fixed income funds listed.
I personally would use the following for taxable
VTIAX -- Total International Stock Index Fund Adm Shares -- .11%
VBTLX -- Total Bond Market Index Fund Admiral Shares -- .05%
VTABX -- Total International Bond Index Admiral Shares -- .11%
Good luck!
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
I would pretty much go along with this but I would use the stable value fund in the 401, then fill up with Dottie suggested. Instead of 5% of small and midcap I might go with 10% each but it doesn't matter much, if at all. Some people like to have international funds in a taxable to be able to use credit foreign tax credit but to me it never made much difference. I wouldn't bother with any bonds in taxable assuming you have enough space to use the stable value fund to get to your 20% in bonds.Dottie57 wrote: ↑Sat Apr 17, 2021 3:28 pm In your 401k, for stocks, take the following to make U.S. total stock.
VINIX -- Vanguard Institutional Index -- .04% (tracks S&P)
VIMAX -- Vanguard Mid Cap Index Adm -- .05%
VSMAX -- Vanguard Small Cap Index Adm -- .05%
Don’t know about the fixed income funds listed.
I personally would use the following for taxable
VTIAX -- Total International Stock Index Fund Adm Shares -- .11%
VBTLX -- Total Bond Market Index Fund Admiral Shares -- .05%
VTABX -- Total International Bond Index Admiral Shares -- .11%
Good luck!
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
OP,
They are not retirement accounts. They are tax-advantaged accounts. You can withdraw the money tax-free and penalty free before 59 1/2 years old.
Please check out the following URL.
https://www.madfientist.com/how-to-acce ... nds-early/
So, you should invest all your money as one portfolio across all accounts: taxable and tax-advantaged.
KlangFool
They are not retirement accounts. They are tax-advantaged accounts. You can withdraw the money tax-free and penalty free before 59 1/2 years old.
Please check out the following URL.
https://www.madfientist.com/how-to-acce ... nds-early/
So, you should invest all your money as one portfolio across all accounts: taxable and tax-advantaged.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
- retired@50
- Posts: 12833
- Joined: Tue Oct 01, 2019 2:36 pm
- Location: Living in the U.S.A.
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
You're in a tough spot with regard to where to hold your bonds.
Ideally, you'd use a low expense ratio bond index fund inside the 401k plan, but maybe a stable value fund would be an acceptable substitute.
If you're forced to put bonds in a taxable account, you might want to consider the Vanguard NY Municipal Bond fund.
It's considered a long-term fund but has a duration of 6.2 years, so maybe it's worth a look.
Link: https://investor.vanguard.com/mutual-fu ... view/vnytx
Regards,
Ideally, you'd use a low expense ratio bond index fund inside the 401k plan, but maybe a stable value fund would be an acceptable substitute.
If you're forced to put bonds in a taxable account, you might want to consider the Vanguard NY Municipal Bond fund.
It's considered a long-term fund but has a duration of 6.2 years, so maybe it's worth a look.
Link: https://investor.vanguard.com/mutual-fu ... view/vnytx
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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- Posts: 19
- Joined: Sat May 05, 2012 9:49 pm
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
Thank you all for your help. Here's a link to the description of the stable value fund -- https://www.entind-401kplan.com/investm ... ET_XVA.PDF
Does that make it seem like a good bonds equivalent option?
And.....
Trying to figure out the best way to do this…. (37.7% of funds tax advantaged / 62.3% non tax advantaged)
Stocks: (75% Allocation)
75% VTSAX – Total Stock Market Index Fund -- .04% expense ratio
25% VTIAX – Total International Stock Index Fund -- .11% expense ratio
Bonds: (20% Allocation)
100% in Stable Value Fund (bonds equivalent in current job 401k)
Crypto: (5% Allocation)
50% Ethereum / 50% Bitcoin
After filling my current job 401k with bonds, remainder in that 401k account to be bundled together to create a low expense total stock market alternative, via this calculation:
60%
VINIX – Vanguard Institutional Index -- .04% expense ratio (tracks S&P)
20%
VIMAX – Vanguard Mid Cap Index -- .05% expense ratio
20%
VSMAX – Vanguard Small Cap Index -- .05% expense ratio
Does this seem like it makes sense? What changes would you recommend?
Does that make it seem like a good bonds equivalent option?
And.....
Trying to figure out the best way to do this…. (37.7% of funds tax advantaged / 62.3% non tax advantaged)
Stocks: (75% Allocation)
75% VTSAX – Total Stock Market Index Fund -- .04% expense ratio
25% VTIAX – Total International Stock Index Fund -- .11% expense ratio
Bonds: (20% Allocation)
100% in Stable Value Fund (bonds equivalent in current job 401k)
Crypto: (5% Allocation)
50% Ethereum / 50% Bitcoin
After filling my current job 401k with bonds, remainder in that 401k account to be bundled together to create a low expense total stock market alternative, via this calculation:
60%
VINIX – Vanguard Institutional Index -- .04% expense ratio (tracks S&P)
20%
VIMAX – Vanguard Mid Cap Index -- .05% expense ratio
20%
VSMAX – Vanguard Small Cap Index -- .05% expense ratio
Does this seem like it makes sense? What changes would you recommend?
- retired@50
- Posts: 12833
- Joined: Tue Oct 01, 2019 2:36 pm
- Location: Living in the U.S.A.
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
When reading the fact sheet for the stable value fund, the second bullet point listed in the "Features" section reads as follows:25feelingold wrote: ↑Sat Apr 17, 2021 9:43 pm Thank you all for your help. Here's a link to the description of the stable value fund -- https://www.entind-401kplan.com/investm ... ET_XVA.PDF
Does that make it seem like a good bonds equivalent option?
You might need to call the 401k provider and find out what the guaranteed rate is, and monitor it over time to see that it remains reasonably competitive. Also, read the entire fact sheet. There are limitations on withdrawals / transfers out of the stable value fund.> The guaranteed interest rate is announced in advance and is guaranteed for a six-month period. A minimum rate will apply.
If the rate and terms are acceptable to you, then you can consider the fund as a bond substitute.
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
I'm sorry for being uninformed, but what would you consider an acceptable rate at this point? I'll call tomorrow and find out what the current guaranteed rate is.
If the rate and terms are acceptable to you, then you can consider the fund as a bond substitute.
Regards,
[/quote]
If the rate and terms are acceptable to you, then you can consider the fund as a bond substitute.
Regards,
[/quote]
- retired@50
- Posts: 12833
- Joined: Tue Oct 01, 2019 2:36 pm
- Location: Living in the U.S.A.
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
The fact sheet you linked above compares the stable value fund to an intermediate term bond fund, so with interest rates as they currently are, I'd expect something in the 1.75% to 2.25% range as acceptable, assuming you're okay with the other terms.25feelingold wrote: ↑Sun Apr 18, 2021 9:58 am I'm sorry for being uninformed, but what would you consider an acceptable rate at this point?
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
I called and they said I was wrong, that that fund never loses money but it essentially tracks treasuries and he's going to call me back with the current rate but thought it was only around .3%.
He thought the only bond fund that might make more sense would be TGCFX which has an expense ratio of .51% and here's the fact sheet: https://www.entind-401kplan.com/investm ... ET_K8A.PDF
Should I use that as my bond fund or just disregard the tax advantaged vs tax disadvantaged element and invest in the VBTLX with the .05% expense ratio in my non-retirement accounts?
He thought the only bond fund that might make more sense would be TGCFX which has an expense ratio of .51% and here's the fact sheet: https://www.entind-401kplan.com/investm ... ET_K8A.PDF
Should I use that as my bond fund or just disregard the tax advantaged vs tax disadvantaged element and invest in the VBTLX with the .05% expense ratio in my non-retirement accounts?
retired@50 wrote: ↑Sun Apr 18, 2021 10:04 amThe fact sheet you linked above compares the stable value fund to an intermediate term bond fund, so with interest rates as they currently are, I'd expect something in the 1.75% to 2.25% range as acceptable, assuming you're okay with the other terms.25feelingold wrote: ↑Sun Apr 18, 2021 9:58 am I'm sorry for being uninformed, but what would you consider an acceptable rate at this point?
Regards,
- retired@50
- Posts: 12833
- Joined: Tue Oct 01, 2019 2:36 pm
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Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
I'd probably use the TGCFX fund, even though the expense ratio isn't ideal.
Regards,
Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
I seconded that opinion.retired@50 wrote: ↑Mon Apr 19, 2021 5:10 pm I'd probably use the TGCFX fund, even though the expense ratio isn't ideal.
Regards,
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
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Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
OP- you can still contribute to a RothIRA via backdoor RothIRA. You didn't list any tIRA so its should be straightforward and its not too late to contribute for 2020!25feelingold wrote: ↑Sat Apr 17, 2021 2:52 pm
My income was just over the limit for contributing to ROTH accounts.
Also, since you will be buying $4k/month into taxable account, it will end up being larger than your 401K. Make sure you set yourself up to be able to TLH in the future. ie- don't have the same funds in 401k/RothIRA and taxable account- example: total stock market index across all accounts.
I had to change funds to be able to TLH but it was worth it.
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Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
For Tax Loss Harvesting, for my purposes, you're saying I shouldn't use the same VINIX (S&P index) in my 401k and my current ROTH as in my taxable account?
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Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
Yes, don't hold the same fund in taxable AND retirement accounts otherwise it may result in a wash sale.25feelingold wrote: ↑Mon Apr 19, 2021 9:13 pm For Tax Loss Harvesting, for my purposes, you're saying I shouldn't use the same VINIX (S&P index) in my 401k and my current ROTH as in my taxable account?
There are much smarter people than I who hold the same funds across accounts but they are more adept at multitasking. Its easier just to hold different funds in your taxable and figure out TLH partners when setting it all up.
Re: Help with Investing Plan -- Choosing Funds for Retirement/Non-Retirement
25feelingold,25feelingold wrote: ↑Mon Apr 19, 2021 9:13 pm For Tax Loss Harvesting, for my purposes, you're saying I shouldn't use the same VINIX (S&P index) in my 401k and my current ROTH as in my taxable account?
You have more choices in your taxable account. So, you should use S&P 500 Index fund in your 401K and Roth IRA. Choose Total Stock Market Index Fund in your taxable account.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry