Back in 2009 I hired a fee-only financial advisor to suggest a portfolio breakdown, and I’ve been chugging away with basically that plan ever since. Thought it was time to do a check-in — I’m due for rebalancing and have been doing some account consolidation / simplification. (It was worse than this before!)
I just did a sizeable rollover to my trad IRA, but before I invest it, I wanted advice on whether to also consolidate other accounts too, and rethink some asset placement to correct some potential past mistakes I’ve been living with I have been rebalancing just with new contributions and allowing 5% wiggle room but it might be time to sell things if needed to get back into order.
Emergency funds: yes
Debt: Mortgage: $115,500 principal, 3.75%
Tax Filing Status: Married Filing Jointly
Tax Rate: 22% Federal, no State tax
State of Residence: Washington
Age: 40 & 41 (husband) — we hope to retire early in 10-15 years so now’s a good time if we need to course correct
Desired Asset allocation:
85% stocks / 15% bonds — target is 25% VTI or equiv, 25% VBR or equiv, 25% VEU or equiv, 15% BND or bonds, up to 10% misc (cash, real estate, green energy)
Currently at 29% VTI, 23% VBR, 23% VEU, 17% BND, 8% misc
Approximately 1M
Current retirement assets
Taxable
1.72% Vanguard Total Bond Market (BND) (0.03)
13.98% Vanguard US Small Cap Value (VBR) (0.07)
13.49% Vanguard International Equity (VEU) (0.04)
12.73% Vanguard Total Stock Market (VTI) (0.03)
2.42% New Alternatives Fund (NALFX) (1.03)
His 401k (just left this job, have not gotten access to new job’s plan yet)
1.64% Fidelity® U.S. Bond Index Fund (FXNAX) (0.025)
2.00% Vanguard Total Stock Market Index Fund – Admiral Class (VTSAX) (0.04)
4.32% Vanguard Small Cap Value Index Fund – Admiral Class (VSIAX) (0.07)
4.66% Vanguard Total International Stock Index Fund – Admiral Class (VTIAX) (0.12)
0.32% Vanguard Real Estate Index Fund – Admiral Class (VGSLX) (0.13)
His old 401k at Fidelity
7.30% Vanguard IS S&P500 IDX TR (VFFSX) (0.01)
0.83% INTL VALUE ACCOUNT (0.449)
0.78% SMID CAP GROWTH ACCT (0.4432)
0.71% SMID CAP VALUE ACCT (0.2464)
0.23% Vanguard ST BD IDX IS PL (VBIPX) (0.03)
0.15% BlackRock LifePath® Index 2050 Unitized Account M (0.04)
His stock at Fidelity
2.34% Microsoft (MSFT)
His Roth IRA at Schwab
0.34% VANGUARD SMALL CAP VALUE ETF (VBR) (0.07)
0.35% VANGUARD TOTAL STOCK MARKET ETF (VTI) (0.03)
0.11% VANGUARD REAL ESTATE ETF (VNQ) (0.13)
His Trad IRA at Schwab
0.77% VANGUARD TOTAL BOND MARKET ETF (BND) (0.03)
2.10% VANGUARD FTSE ALL WORLD EX US ETF (VEU) (0.04)
Her 457(b) at MissionSquare (no new contributions available)
7.15% MissionSquare 500 Stock Index R3 (0.49)
4.84% MissionSquare Core Bond Index R3 (0.49)
Her Roth IRA at Schwab
3.76% VANGUARD TOTAL BOND MARKET ETF (BND) (0.03)
2.04% VANGUARD FTSE ALL WORLD EX US ETF (VEU) (0.04)
2.28% VANGUARD REAL ESTATE ETF (VNQ) (0.13)
Her Traditional IRA at Schwab
3.42% VANGUARD TOTAL BOND MARKET ETF (BND) (0.03)
3.21% VANGUARD SMALL CAP VALUE ETF (VBR) (0.07)
Contributions
New annual Contributions
~$20000 his 401k (3% match)
$7000 her Trad IRA (I am self-employed)
Available funds
Rollover funds available in her 401(k)
$100,045.13 rollover, cash
To do’s:
I see there are some higher expense funds in his old 401(k) that could be sold and rebalanced elsewhere.
Questions:
1. Should I sell BND in my Roth IRA (at a loss) and rebuy in my traditional IRA to allow me to maintain asset allocation with the funds in better locations? (I expect the answer is yes.)
2. Should I roll over one or both of his old 401(k)s to his trad IRA at Schwab, or keep where they are for access to Vanguard Admiral shares?
3. I’m planning for early retirement funds to come from taxable and my 457(b). If I’m planning to use them earlier, should that affect my asset allocation in those accounts? Does that just depend on my risk tolerance for how willing we are to delay early requirement if the market tanks?
4. He received the MSFT stock while an employee, but was hit by the reduction in force so won’t be adding to it for the foreseeable future. Should I sell it and reinvest into our standard asset allocation? Or keep it to avoid the capital gains hit, and just keep it in my “other” bucket since it’s not that much? I have always been index funds all the way so not sure how to accommodate individual stock
