It's time to reassess the portfolio and see if there are recommendations as we navigate the final 10 years or so of our work life. I greatly appreciate your thoughts.
Emergency Funds– we have approximately 12 month EF. 70% in Series I Bonds, 30% in cash/cash equivalent (HYSA/MMF)
Debt – none
Tax Filing Status – MFJ
Sate of Residence: Arkansas
Tax Rate: 24% Fed, 3.9% State
Age: 50 (M) 48 (F)
Desired Asset Allocation: stocks/bonds: 70/30. US/International: anywhere from 75/25 to 60/40
Approximate size of Portfolio: 1.7m (excluding value of residence)
Taxable (Joint) at VG:
•3.8% VTSAX Vanguard Total Stock Market Index(0.04%)
•1.3% VTIAX Vanguard Total International Index (0.12%)
•1.2% Cash
His 401K at Empower
•61.2% BlackRock Lifepath 2035 TDF (.058%)
Her SIMPLE IRA at Ascensus
•2.2% VFORX Vanguard 2040 TDF(0.08%)
Her rollover IRA at VG
•21.9% VTTHX Vanguard 2035 TDF (0.08%)
•6.7% VFORX Vanguard 2040 TDF (0.08%)
HSA (family) at Optum
•1.4% VTSAX Vanguard Total Stock Market Index (0.04%)
HSA (hers) at Fidelity
•0.3% FSKAX Fidelity Total Stock Market Index(0.015%)
Contributions:
His 401K – 30K/yr, employer contribution maybe 2K
Her SIMPLE IRA – 16K/yr, employer contribution 4K
Taxable – 12K/yr
HSA: $7800/yr, employer contribution $500
Available Funds:
His 401K – eh, we are just rolling with a TDF for simplicity and ER purposes. The options aren't great so TDF makes the most sense
Her SIMPLE IRA – rolling with VG TDF
“Personal” Finance Thoughts:
•In general, we try to balance saving for retirement and taking advantage of being healthy and having enough income to do some things (primarily that means travel). We have no children, so there is no legacy to be concerned with.
•Our allocations are not set in stone because, in general, most of the suggested allocations regarding stocks/bonds and US/nonUS are fine and for us. I think pursuing precision beyond the “can you sleep at night implications” is relatively meaningless and can lead to needless tinkering. In general, stocks/bonds we want somewhere between 80/20 and 60/40, so I generally target 70/30. For US/exUS 80/20 to 60/40 is fine with me as well. We max out our tax deferred retirement space.
•Our combined income makes us ineligible to contribute to a personal Roth IRA.
•If we choose to retire early we will need money. Currently, we don’t have access to "much" unless we utilize the rule of 55. I anticipate us working through at least age 59 which gives us time to accumulate some money in non-retirement accounts.
•That being said, we don’t have “plans” on doing anything in particular. We aren’t planning on retiring early and we aren’t planning on working until full retirement age. That sounds a lot like we aren't planning but that's not entirely accurate either. Working allows us to spend and save so that’s roughly our situation. We work. We travel. We save for retirement - with no firm notion of what retirement will look like.
•I think we can continue doing exactly what we are doing now, call it career at 60, and be reasonably well set up going forward. In fact, at the moment, I’d call that the most likely path. However, I want to give some thought to how we should handle this last phase.
Questions:
As stated, I’m just looking for thoughts on how to approach this final stage of accumulation. It seems like we have 10 years (+/- 5) or so left to work/save. Fundamentally, all of our money is tax deferred retirement accounts. We have no Roth accounts. We haven’t been focusing on building a sizable taxable account. Is it time to rethink our savings strategy?
a.Should we cease maxing out retirement accounts and contribute more to our taxable account?
b.Should we consider splitting our retirement contributions traditional/Roth? I could make my 401K contributions as Roth contributions, her SIMPLE IRA contributions could remain the same. This doesn’t help with retiring early. In fact it would decrease the amount of money available to contribute to taxable accounts.
c.Other…Hey, I’m open to suggestions. You don’t know what you know. In fact "other" is sort of the root under this post. I'm specifically looking for things we should consider that perhaps we haven't.
Again. If you're taking the time to read and analyze this, I am grateful to you.
Emergency Funds– we have approximately 12 month EF. 70% in Series I Bonds, 30% in cash/cash equivalent (HYSA/MMF)
Debt – none
Tax Filing Status – MFJ
Sate of Residence: Arkansas
Tax Rate: 24% Fed, 3.9% State
Age: 50 (M) 48 (F)
Desired Asset Allocation: stocks/bonds: 70/30. US/International: anywhere from 75/25 to 60/40
Approximate size of Portfolio: 1.7m (excluding value of residence)
Taxable (Joint) at VG:
•3.8% VTSAX Vanguard Total Stock Market Index(0.04%)
•1.3% VTIAX Vanguard Total International Index (0.12%)
•1.2% Cash
His 401K at Empower
•61.2% BlackRock Lifepath 2035 TDF (.058%)
Her SIMPLE IRA at Ascensus
•2.2% VFORX Vanguard 2040 TDF(0.08%)
Her rollover IRA at VG
•21.9% VTTHX Vanguard 2035 TDF (0.08%)
•6.7% VFORX Vanguard 2040 TDF (0.08%)
HSA (family) at Optum
•1.4% VTSAX Vanguard Total Stock Market Index (0.04%)
HSA (hers) at Fidelity
•0.3% FSKAX Fidelity Total Stock Market Index(0.015%)
Contributions:
His 401K – 30K/yr, employer contribution maybe 2K
Her SIMPLE IRA – 16K/yr, employer contribution 4K
Taxable – 12K/yr
HSA: $7800/yr, employer contribution $500
Available Funds:
His 401K – eh, we are just rolling with a TDF for simplicity and ER purposes. The options aren't great so TDF makes the most sense
Her SIMPLE IRA – rolling with VG TDF
“Personal” Finance Thoughts:
•In general, we try to balance saving for retirement and taking advantage of being healthy and having enough income to do some things (primarily that means travel). We have no children, so there is no legacy to be concerned with.
•Our allocations are not set in stone because, in general, most of the suggested allocations regarding stocks/bonds and US/nonUS are fine and for us. I think pursuing precision beyond the “can you sleep at night implications” is relatively meaningless and can lead to needless tinkering. In general, stocks/bonds we want somewhere between 80/20 and 60/40, so I generally target 70/30. For US/exUS 80/20 to 60/40 is fine with me as well. We max out our tax deferred retirement space.
•Our combined income makes us ineligible to contribute to a personal Roth IRA.
•If we choose to retire early we will need money. Currently, we don’t have access to "much" unless we utilize the rule of 55. I anticipate us working through at least age 59 which gives us time to accumulate some money in non-retirement accounts.
•That being said, we don’t have “plans” on doing anything in particular. We aren’t planning on retiring early and we aren’t planning on working until full retirement age. That sounds a lot like we aren't planning but that's not entirely accurate either. Working allows us to spend and save so that’s roughly our situation. We work. We travel. We save for retirement - with no firm notion of what retirement will look like.
•I think we can continue doing exactly what we are doing now, call it career at 60, and be reasonably well set up going forward. In fact, at the moment, I’d call that the most likely path. However, I want to give some thought to how we should handle this last phase.
Questions:
As stated, I’m just looking for thoughts on how to approach this final stage of accumulation. It seems like we have 10 years (+/- 5) or so left to work/save. Fundamentally, all of our money is tax deferred retirement accounts. We have no Roth accounts. We haven’t been focusing on building a sizable taxable account. Is it time to rethink our savings strategy?
a.Should we cease maxing out retirement accounts and contribute more to our taxable account?
b.Should we consider splitting our retirement contributions traditional/Roth? I could make my 401K contributions as Roth contributions, her SIMPLE IRA contributions could remain the same. This doesn’t help with retiring early. In fact it would decrease the amount of money available to contribute to taxable accounts.
c.Other…Hey, I’m open to suggestions. You don’t know what you know. In fact "other" is sort of the root under this post. I'm specifically looking for things we should consider that perhaps we haven't.
Again. If you're taking the time to read and analyze this, I am grateful to you.
Statistics: Posted by MrMars — Sat Sep 28, 2024 4:41 pm — Replies 11 — Views 555