I'm getting married in a few weeks and am taking an overdue hard look at my retirement accounts and setting up a financial plan. I've outlined my situation below, with specific questions at bottom. I would very much appreciate any feedback or suggestions you have.
I'm 29 and my income is $100k. I've contributed to a 401(k) for 7 years, but for most of that time I contributed only enough to max my employer match (8%+4% match). I recently received a nice pay bump and upped my contribution to 18% so that my take-home pay stays the same, but because I didn't do this years ago I've ended up with a decent chunk of change (~$50k) in my checking account that I need to find a home for. I started by opening a Roth IRA earlier this year and maxing out contributions for 2020 and 2021.
Here is how my accounts look at the moment:
401(k)
$65,000
- 85% VFIAX (Vanguard 500 Index Fund Admiral Shares)
- 15% VAIPX (Vanguard Inflation-Protected Securities Fund Admiral Shares)
Roth IRA
$13,500
- 70% SWTSX (Schwab total U.S.)
- 30% SWISX (Schwab total international)
$10,000
- 60% SWTSX
- 30% VTI
- 10% ARKK
$50,000
My wife-to-be has about $13,000 in a traditional IRA, invested similarly to my Roth, and about an equal amount in her 401(k). The latter is entirely in a Vanguard target date fund.
Questions
1. The breakdown across both retirement accounts is about 87% stocks, 13% bonds (VAIPX only). I am comfortable with this overall split for the time being, but I'm wondering if my stocks are too heavily weighted in S&P500. Stock holdings break down to 80% S&P500, 14% total U.S. market, 6% total international market.
2. Is it worth diversifying my bond holdings via the IRA? My understanding of the bond market is…not great, so I have a difficult time understanding whether VAIPX is a decent option here or whether it's worth holding something like SWAGX as well.
3. For the 50k in checking, I'd like to keep about 15k as cash for emergencies, and 6k will go to the IRA in January, but the remaining ~30k is just sitting. I don't want to max my 401(k) and live off of it, because we'll likely purchase a home in the next 5 years and this will likely be the basis of a downpayment, but I also don't want it to languish in the interim. I'm thinking of tossing it in the taxable brokerage account in a 60/40 or 50/50 stock/bond split. Thoughts?
Thanks for reading.