Personal Investments • Portfolio Plans for Early Career "Sabbatical"

Hello, I'm looking for some advice on how to handle an early career break. After graduating college, I have been working at my current job for five years now. I make 110k per year before taxes, and have been able to save a large portion of that due to living with my parents for the last three years. In July of next year I'm planning on quitting my job and joining an English teaching program in another country. By the time I quit in July, I expect to have an additional 50k saved in my taxable accounts. This program could be as short as one year, or as long as 4-5 years depending on how I like it. This position would be paid, but I would expect to spend all that I make and up to $1,000 of my taxable savings per month. I am happy to hear any thoughts on any aspect of my retirement accounts, but primarily am looking for advice on how to structure my taxable plan for this period. Thank you for any input you have!

Emergency funds: 10,700 in Series I bonds.

Debt: No debt.

Tax Filing Status: Single

Tax Rate: 22% Federal, 4.40% State

State of Residence: Colorado

Age: 26

Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 40% of stocks

Please provide an approximate size of your total portfolio 300k



Current retirement assets

Taxable - 101k
9.7% cash (VMRXX) (28k)
22.2% Vanguard Total World Stock Index (VTWAX) (0.1% ER) (65k)
2.6% Vanguard Total Bond Index (VTBLX) (0.05% ER) (8k)

My 401k at Fidelity - 142k
27% State Street Target Retirement 2060 P Class (0.055% ER) (79k)
12.6% S&P 500 (0.0061% ER) (37k)
5.7% Fidelity Total Market Index FSKAX (0.015% ER) (17k)
3.2% Fidelity Total International Index FTIHX (0.06% ER) (9k)

My Roth IRA at Vanguard - 30k
10.3% Vanguard Total World Stock Index (VTWAX) (0.1% ER) (30k)
Switched from Vanguard Life Strategy Growth (VASGX) last week

My HSA at Fidelity - 20k
3.6% Fidelity Total Market Index FSKAX (0.015% ER) (10k)
2.4% Fidelity Total International Index FTIHX (0.06% ER) ( 7k)
0.7% Fidelity US Bond Index FXNAX (0.025%) (2k)

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Contributions

New annual Contributions
$25,685 my 401k (23k + 2.7k match)
$7000 my Roth IRA

Available funds

Funds available in my 401(k)/HSA
I have access to Fidelity Brokerage Link, so any mutual fund available to Fidelity. HSA is direct with Fidelity

Funds available in my Roth IRA/Taxable
Vanguard funds

Questions:
1. What should my asset allocation be for my taxable accounts, considering my plan to quit and withdraw for potentially 5ish years?
I have two ideas:

• The first is to keep all of my cash allocation, and save the rest of my earnings until I quit there as well. Then I would withdraw from cash, leaving my existing stock positions untouched

• The other is to reallocate 60% of my total taxable to stocks, 40% to short term bonds (something like VSGH), and withdraw from my bond position.

I want to focus on safety for this money; I don't want to be forced to change my plans due to a market downturn after quitting.

2. Is there anything about my retirement planning I should change based on my plan? I'm already significantly tilted towards stock in my retirement account allocation, about 95% currently.

3. Any other concerns or discussion on my situation?

Statistics: Posted by arcturus4766 — Tue Jul 16, 2024 10:26 pm — Replies 0 — Views 150

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