Portfolio Help -- Working Towards Comphrehensive Financial Plan

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Topic Author
jstage
Posts: 53
Joined: Wed Apr 28, 2021 12:07 pm

Portfolio Help -- Working Towards Comphrehensive Financial Plan

Post by jstage »

Hello! I'm currently working towards checking on our family's overall financial plan. I figured I should start with looking at our portfolio. I'm fairly new to this so this is just a first step in seeing what I can learn/understand/do before paying for help (like a financial advisor).

Emergency funds: We currently have 12 months expenses. However, this will transition. We have more than that in equity in our home, but we plan on moving. So that money will be used for closing costs, be depleted, and then as soon as our home sells we’ll have more than that back. There may actually never be a gap as we plan on getting a bridge loan during this transition process.

Debt: Only debt is our current mortgage

Tax Filing Status: married filing jointly

Tax Rate: 22% Federal, 4.25% State

State of Residence: MI

Age: 35 (she/her/hers) Spouse: 40 (he/him/his)

Desired Asset allocation: 40%-60% stocks / 40%-60% bonds (I don’t really know…what is appropriate for our age? We aren’t necessarily risk aversive but we don’t want to be too wild about it)

Desired International allocation: I have no clue

Approximate portfolio size: 280k


Taxable
2.6% cash

.01% Cronos Group (CRON)
1.7% Delta Airlines Inc (DAL)
.6% Innovative Industrial Properties (IIPR)
.2% Vanguard S&P (VOO) (0.03%)

Her Roth IRA at Vanguard
12% Vanguard Target Retirement 2050 (VFIFX) (0.15%)

Her SEP IRA at Vanguard
11% Vanguard Target Retirement 2050 Fund (VFIFX) (0.15%)
15% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)(0.04%)

Her Rollover at Vanguard
5.7% Vanguard Target Retirement 2050 Fund (VFIFX)(0.15%)

Her State of MI 457 Plan
.3% State Street Target Retirement 2050 (SSDLX) (0.055%)
.3% Jennison Large Cap Growth (PJFAX) (0.970%)
2.6% T. Rowe Price Mid Cap Value (TRMCX) (0.780%)
2.5% Artisans US Mid-Cap Growth Strategy (ARTMX) (1.180%)
*currently contributing to this; it has match at 7% but that money goes into 401k plan

Her State of MI 401K Plan
.1% State Street Target Retirement 2050 (SSDLX) (O.055%)
1% State Street S&P 500 Index (SVSPX) (0.160%)
.7% Artisan US Mid-Cap Growth Strategy (ARTMX) (1.180%)
.7% Voya Small Cap Growth Equity (NSPAX) (1.330%)

Her EAA of Michigan 457 (needs to be rolled over into State of MI 401k only place its allowed to go)
2% State Street Target Retirement 2050 (SSDLX) (0.055%)

His Roth IRA at Vanguard
2% Vanguard Target Retirement 2050 Fund (VFIFX) (0.15%)
10.2% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)

His 401K (work)
28.9% American Funds 2040 Target Date Retirement Fund® Class R-6 (RFGTX) (0.38%)
*currently contributing and has match of 5%

Contributions

New annual Contributions
$20500 his 401k (employer match of 5%)
$20500 her 457b (employer match of 4% that goes into 401K)
$6000 His Roth IRA
$6000 her Roth IRA
$7300 her work HSA

Other contributions
Child 1 (age 3) Michigan MESP 529: $4200/yr Current Balance: $20,946.07
Child 2 (age 6 months) Michigan MESP 529:$4200/yr Current Balance: $6,278.73

Available funds

Funds available in his 401(k)
Hartford Balanced Income R6
MFS Moderate Allocation I
MFS Growth Allocation I
Eaton Vance Floating Rate (ESBLX) (0.76%)
Virtus AllianzGI Convertible Inst (ANNPX) (0.71%)
Invesco Developing Markets R (ODVNX) (1.47%)
Hennessy Small Cap Financial Instl (HISFX) (1.30%)
MFS Intl Diversification R6 (MDIZX) (0.73%)
American Funds Europacific Growth R6 (RERGX) (0.46%)
MFS International Intrinsic Value R6 (MINJX) (0.62%)
Invesco International Small-Mid Com R6 (OSCIX) (0.95%)
Eaton Vance Income Fund of Boston R6 (EIBRX) (0.66%)
PIMCO Real Return Instl (PRRIX) (0.47%)
Pioneer Bond K (PBFKX) (0.34%)
Goldman Sachs US Equity Insights R6 (GSEUX) (0.55%)
Hartford Core Equity R6 (HAITX) (0.38%)
Fidelity Advisor New Insights I (FINSX) (0.86%)
Vanguard Growth Index Admiral (VIGAX) (0.05%)
American Funds American Mutual R6 (RMFGX) (0.27%)
Hartford Equity Income R6 (HQIVX) (0.66%)
Vanguard Mid Cap Index Admiral (VIMAX) (0.05%)
MId Cap Growth R1 (WMCAUX) (0.5%)
Vanguard Mid-Cap Value Index Admiral (VMVAX) (0.07%)
Pioneer Strategic Income K (STRKX) (0.59%)
Fidelity Advisor Global Commodity Stk I (FFGIX) (0.95%)
Pioneer Real Estate Y (PYREX) (1.20%)
Invesco Small Cap Equity R6 (SMEFX) (0.81%)
Hartford Small Cap Growth R6 (HSLVX) (0.77%)
Victory Sycamore Small Company Opp R (GOGFX) (1.44%)
Reliance MetLife Stable Value Series 25157 - Class 68 (?) (1.30%)
American Funds 2020 Trgt Date Retire (RRCTX) (0.31%)
American Funds 2030 Trgt Date Retire (RFETX) (0.35%)
American Funds 2040 Trgt Date Retire (RFGTX) (0.38%)
American Funds 2050 Trgt Date Retire (RFITX) (0.39%)
Hartford World Bond (HWDVX) (0.65%)

Funds available in her 403(b) and 401k
State Street Target Retirement 2020
State Street Target Retirement 2025
State Street Target Retirement 2030
State Street Target Retirement 2035
State Street Target Retirement 2040
State Street Target Retirement 2045
State Street Target Retirement 2050
State Street Target Retirement 2055
State Street Target Retirement 2060
State Street Target Retirement 2065

Capital Preservation
BlackRock Government Short-Term Investment Fund (0.056%)


Fixed Income
State Street Bond Market Index (0.020%)
PIMCO Total Return Fund (0.470%)
Prudential High Yield Fund (0.376%)

Large Cap Domestic Equity
State Street S&P 500 Index (0.013%)
Dodge & Cox Stock Portfolio (0.415%)
Jennison Large Cap Growth (0.283%)

Mid/Small Cap Domestic Equity
State Street S&P MidCap Index
BlackRock S&P Small Cap 600 Equity Index
T Rowe Price Mid Cap Value
Artisan US Mid-Cap Growth Strategy
Virtus Ceredex Small-Cap Value Equity Fund (SCETX) (1.15%)
Voya Small Cap Growth Strategy (NSPAX) (1.330%)

International Equity
State Street Global All Cap Equity ex-U.S. Index (SSGVX) (0.50%)
American Funds EuroPacific Growth Fund: R5 (RERFX) (0.51%)

Emerging Markets
BlackRock Emerging Markets Index Fund (MADCX) (0.87%)

Other
The Self-Directed Brokerage Account (SDBA)

Questions
1. We'd like to retire early. By early, we mean around the age of 50/55, but the exact year is loose at this point. I'm (she) ok working longer because its just my personality type and I like my field. My husband would like to retire as soon as possible given the standard of living we'd like to maintain. So...are we saving enough?
2. Could we hit retirement at 55/60 if we contributed less? Basically, we want to strike a balance between spending income now on family trips and a bigger house while our kids our home with us and saving appropriately for retirement.
3. Any input on how(529 vs. taxable account)/how much to save for children's college? I know there is debate on whether to do this or not but this is a high priority for us.
4. How much should we spend on our house. If it its helpful, we have 80k annual salary (she) and 100k (him) annual salary in extremely stable jobs (education). We have slow growth annual (only $1000 and 3%, respectively) in current roles, but roles should change and lead to big jumps over the next decade or so (hard to tell exactly when)
5. Is our money where it should be in regards to asset allocation...I know nothing about this.
6. We need to move. We've currently been able to put so much away each year because our currently living situation is so cheap. However, we need to move. We only have two bedrooms and now have two kids. We've severely outgrown our home. But I don't know how much we should spend. It is unrealistic to pay less then 350k-400k where we live (schools, crime, size of home, etc.). I'm having a hard time understanding how much we can devote to home costs while properly aiming for retirement bc it seems so far out. Any input would be more than welcome.
7. There are probably more questions I should be asking, but at this point I'm just now starting to understand all this stuff and even know what to think about so if there are oversights I'll gladly take that input.
User avatar
WoodSpinner
Posts: 3505
Joined: Mon Feb 27, 2017 12:15 pm

Re: Portfolio Help -- Working Towards Comphrehensive Financial Plan

Post by WoodSpinner »

Jstage,

Welcome to the forum, hope we can help….

First off, you guys are doing very well, lots of savings and potential for salary improvements.

It’s always a tough balance between expenses NOW vs. Retirement. No magic answers, I think you will have to make some choices.

To better answer your questions on early Retirement we would need some info on:
- Expected income during retirement (SS, Pensions etc.)
- Expected expenses

That said, 15 years is always off and you might be better served working on more immediate goals:

It sounds like a home purchase is a high priority for your family. Best suggestion is to get pre-qualified for a mortgage and look at the potential mortgage payment in relation to your current income, expenses and budget. How much of an impact on your savings rate would this be?

WoodSpinner
WoodSpinner
Topic Author
jstage
Posts: 53
Joined: Wed Apr 28, 2021 12:07 pm

Re: Portfolio Help -- Working Towards Comphrehensive Financial Plan

Post by jstage »

Hello,

That is what is tricky...we aren't quite sure how to calculate expenses in retirement. We've currently been using 6k-8k per month as reference. We came to that because we are at about 8k per month now (but that includes 1k to roths, 1500 to daycare, and 700 to 529s that won't exist in retirement). I'm guessing in Michigan and based on how we live our lives/visual retirmenet 8k would be a very comfortable point. What do most ppl assume? This is the hardest part for me...I don't know how to predict this.

We won't have any pensions.

Opting for benefits at 67:
Her: $1496
Him: 2375

I played with the SS calculator a bit...does both of us getting SS lower what we get? As in, we don't get hers+his we get a different number? Or am I looking at it wrong?
User avatar
retired@50
Posts: 12826
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Portfolio Help -- Working Towards Comphrehensive Financial Plan

Post by retired@50 »

Try Mike Piper's open social security website for SS estimates. Usually, it's best if the higher earning spouse delays till 70 years old. Play around with different scenarios.
https://opensocialsecurity.com/

As for expenses, at your age(s), it's too far into the future to be precise. You can omit the obvious stuff like retirement contributions. Depending on your age at the time, it may or may not include college costs for children or a mortgage payment. Otherwise, I don't think there is any magic formula about how to predict expenses in retirement. I just did a two-year look back at all my expenses. Since I was living the sort of lifestyle I wanted in retirement, there weren't too many adjustments to make.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Topic Author
jstage
Posts: 53
Joined: Wed Apr 28, 2021 12:07 pm

Re: Portfolio Help -- Working Towards Comphrehensive Financial Plan

Post by jstage »

WoodSpinner wrote: Mon Jan 24, 2022 1:41 pm Jstage,

Welcome to the forum, hope we can help….

First off, you guys are doing very well, lots of savings and potential for salary improvements.

It’s always a tough balance between expenses NOW vs. Retirement. No magic answers, I think you will have to make some choices.

To better answer your questions on early Retirement we would need some info on:
- Expected income during retirement (SS, Pensions etc.)
- Expected expenses

That said, 15 years is always off and you might be better served working on more immediate goals:

It sounds like a home purchase is a high priority for your family. Best suggestion is to get pre-qualified for a mortgage and look at the potential mortgage payment in relation to your current income, expenses and budget. How much of an impact on your savings rate would this be?

WoodSpinner
Hello,

That is what is tricky...we aren't quite sure how to calculate expenses in retirement. We've currently been using 6k-8k per month as reference. We came to that because we are at about 8k per month now (but that includes 1k to roths, 1500 to daycare, and 700 to 529s that won't exist in retirement). I'm guessing in Michigan and based on how we live our lives/visual retirmenet 8k would be a very comfortable point. What do most ppl assume? This is the hardest part for me...I don't know how to predict this.

We won't have any pensions.

Opting for benefits at 67:
Her: $1496
Him: 2375

I played with the SS calculator a bit...does both of us getting SS lower what we get? As in, we don't get hers+his we get a different number? Or am I looking at it wrong?
User avatar
WoodSpinner
Posts: 3505
Joined: Mon Feb 27, 2017 12:15 pm

Re: Portfolio Help -- Working Towards Comphrehensive Financial Plan

Post by WoodSpinner »

jstage wrote: Tue Jan 25, 2022 12:45 pm
WoodSpinner wrote: Mon Jan 24, 2022 1:41 pm Jstage,

Welcome to the forum, hope we can help….

First off, you guys are doing very well, lots of savings and potential for salary improvements.

It’s always a tough balance between expenses NOW vs. Retirement. No magic answers, I think you will have to make some choices.

To better answer your questions on early Retirement we would need some info on:
- Expected income during retirement (SS, Pensions etc.)
- Expected expenses

That said, 15 years is always off and you might be better served working on more immediate goals:

It sounds like a home purchase is a high priority for your family. Best suggestion is to get pre-qualified for a mortgage and look at the potential mortgage payment in relation to your current income, expenses and budget. How much of an impact on your savings rate would this be?

WoodSpinner
Hello,

That is what is tricky...we aren't quite sure how to calculate expenses in retirement. We've currently been using 6k-8k per month as reference. We came to that because we are at about 8k per month now (but that includes 1k to roths, 1500 to daycare, and 700 to 529s that won't exist in retirement). I'm guessing in Michigan and based on how we live our lives/visual retirmenet 8k would be a very comfortable point. What do most ppl assume? This is the hardest part for me...I don't know how to predict this.

We won't have any pensions.

Opting for benefits at 67:
Her: $1496
Him: 2375

I played with the SS calculator a bit...does both of us getting SS lower what we get? As in, we don't get hers+his we get a different number? Or am I looking at it wrong?
I second using OpenSocialSecurity as suggested above. It’s a great tool.

That said, I suggest you look towards the priority and see what the impact of a new home will be on your savings rate. That is much more reliable than looking 15 years out at this point.

WoodSpinner
WoodSpinner
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