End of year Review

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Topic Author
uwbadgers
Posts: 83
Joined: Mon Aug 25, 2014 3:36 pm

End of year Review

Post by uwbadgers »

Thought I'd put together a summary of where we are at and see if there was anything that "stuck" out to anyone with our current plan or if there is anything we could be doing better/more efficiently. Thanks in advance, not many people you can talk to about things like this :happy

Age: 33/34, have 2 kids

2017 Income: ~175k
2018 Income: ~175k + ~20-25k new LLC side business (single member) = ~200k combined (will this effect Roth IRA's?)

I think as a solo member LLC I can open another retirement account? Perhaps something I should look in to for 2018? I only have a ROTH IRA with no other offerings at my job.

5 year monthly average NET income: $8,600 (after 401k)
5 year monthly average spending: $5,900 (includes all housing and other spending, doesn't include Roth's)

Rental: Fully paid off rental (~220k value)
NET rental income monthly: $750
I don't include this income in our monthly NET above as this value has varied and really it's like a "bonus" for us but not something we count on each month. I feel this helps us "See" our income vs spending better too.

Retirement: Max what we have at jobs = 2 Roth IRA + 1 401k = 29k/year

Total Retirement saved: 300k
Expense Ratio: 0.13

Current Retirement Mix: Any thoughts here?

They are all target date funds or total stock market.

Of the 300k it comes out to 85% stock and 15% bonds.

(55k) VTSAX 100-0 ROTH IRA 1----->Planned 5.5k 2018

(85k) VTHRX 2030 75-25 ROTH IRA 2----->Planned 5.5k 2018

(103k) VFIFX 2050 90-10 401k
(25k) VTHRX 2015 46-54 401k----->Planned 18k 2018
(18k) Company 100-0 401k (no contributions)

If we put in the planned amounts, the ratio would go down to 82%/18%. If I also put 5.5k of one of the ROTH's into Total Bond the ratio goes down to 80%/20%.

Is that an OK plan to rebalance a bit?



I tried to bold some of the questions I have. Welcome to any thoughts or ideas. We were lucky this year selling our first house as we had ~150k net after closing costs (sold it for 130k more than we paid!).

We used a chunk of that money into the new house down payment, have 30k emergency fund and used the rest to save for this year's property taxes as well as a savings account for our future basement finishing.


Thanks! :sharebeer
mega317
Posts: 4585
Joined: Tue Apr 19, 2016 10:55 am

Re: End of year Review

Post by mega317 »

85/15 is a little light on bonds for my taste. I am near your age and 75/25. But it isn't wrong.

If you're over the Roth limit, use the back door. It doesn't seem you have traditional IRAs that would complicate this.

I think it's needlessly complicated to hold both target date funds and individual funds, but if you have a system to track it then no problem.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
Olemiss540
Posts: 1654
Joined: Fri Aug 18, 2017 8:46 pm

Re: End of year Review

Post by Olemiss540 »

I say you are kicking tail! Nothing to add but keep up the good work.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
Topic Author
uwbadgers
Posts: 83
Joined: Mon Aug 25, 2014 3:36 pm

Re: End of year Review

Post by uwbadgers »

mega317 wrote: Thu Dec 07, 2017 5:45 pm 85/15 is a little light on bonds for my taste. I am near your age and 75/25. But it isn't wrong.

If you're over the Roth limit, use the back door. It doesn't seem you have traditional IRAs that would complicate this.

I think it's needlessly complicated to hold both target date funds and individual funds, but if you have a system to track it then no problem.
Thanks for the feedback.

As far as funds go, I set this up a few years ago when we did the "mega switch" from all high fee, managed funds. Right now the only individual fund we contribute to is my ROTH IRA, in Total Stock Market.

I agree, I'd like to work the bonds down more too. I'll play around a little with the various amounts to get that down. Right now the 401k, 18.5k this next year, will go into the 2015 fund which is about a 50-50 split so that will work things down a bit too.

Thanks!
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