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Personal Investments • 13 year check-in

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It’s been about 13 since I last posted. viewtopic.php?t=69979 Crazy how time flies! My career and investments have done well, and I mostly stuck to the plan I put together here back in 2011, but the last couple of years things have gone a bit wonky, and I could use some thoughts on how to clean it up. I have more accounts than I’d like, but they aren’t really eligible to be combined. The only account I can get rid of is the SMA.

Emergency fund: Funded
Debt: 75k mortgage, 2.5% 15 year, (4.5 years remaining)
Tax filing status: Married, jointly. I also have a side business (LLC) which generates a significant amount of income, so I now use a CPA for filing.
Tax rate: 37% federal, 4.4% state

Ages: 47, 45

Desired allocation: 72% stock, 20% bond, 5% REIT, 3% Cash

Current portfolio:
$5,171,000

My current allocation is:
Stock: 73.5% - $3,793,000
Bond: 17.6% - $911,000
REIT: 4.1% - $213,000
Cash: 4.9% - $254,000


Taxable Accounts:
Brokerage: 1,917,000
- ITOT (S&P ETF)- 1,397,000
- FSKAZ (Total Market MF) - 272,000
- FZDXX (High interest money market) - 250,000

Sedately Managed Account (SMA): 1,933,833
This is actively managed to hardness tax losses. For the sake of allocation I consider this 100% US large cap stock.

Tax Advantaged Accounts:
Rollover IRA (his): 616,000
- FREL (REIT) - 186,000
- FXNAX (Bond MF) - 178,000
- AGG (Bond ETF) - 250,000

ROTH IRA (his): 128,000
- AGG (Bond ETF) - 128,000

ROTH IRA (hers): 110,000
- FREL (REIT) - 27,000
- AGG (Bond ETF) - 83,000

Rollover IRA (hers): 73,000
- AGG (Bond ETF) - 73,000

Simple IRA: 53,000
- FXNAX (Bond MF) - 53,000

Health Savings Account: 95,000
- ITOT (S&P ETF)- 95,000

SEP IRA: 146,000
- FXNAX (Bond MF) - 146,000

Current company 401k: 4,000 (just recently started there, but I’m maxing it out)
- VFIAX (Vanguard 500 index): 4,000

When I started investing heavily in my taxable accounts I made sure to put the more tax-efficient investments there, which are generally stocks. But as I’ve got to the point that my taxable accounts make-up 75% of my portfolio, I am having a few problems. My tax advantaged accounts are the place where I would like the most growth, since it grows tax-free, but since they are almost completely bonds, I have seen very little growth. Additionally, I simply can’t keep my allocation where I want it without putting some bonds in taxable, as the ratio will be too high very soon.

I have a large capital gain on the investments in my taxable accounts, so reallocating is not super easy. Selling my ITOT position would come with a $700k gain.

1. Should I reconsider my 20% goal in bonds?
2. Should I move to getting Bonds in my taxable accounts? If so, how do I do so without huge tax implications?
3. What do you think about the SMA? Overall I’ve been happy with it, as it’s helped me reduce my tax burden the last couple of years, since I’ve moved there. I expect that I’m probably at the top of my career earning now, and for the next 3-5 years.
4. I’ve heard people rave about things like Wealthfront and Betterment for automated tax-loss harvesting. I think that’s roughly what I get from the SMA, but certainly I’m open to suggestions.
5. What else am I messing up? I’m certainly open to other suggestions.

Statistics: Posted by h3h8m3 — Sat May 18, 2024 12:42 pm — Replies 10 — Views 493



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