Emergency Fund: $130K ($100K in a high yield savings account currently at 4% APY; $30K in I bonds) = approximately 1 year of expenses.
Debt:
Tax Rate:35% Federal (including NIIT, 38.8%) / 6.85% State / 3.876% Local; we itemize
State of Residence:New York
Age:She 35 / He 36
Target Asset Allocation:90% Stocks / 10% Bonds;
Target International Allocation: 22.22% of stocks (75% of the international stock in developed markets; 25% of the international stock in emerging markets)
Current Retirement Assets
Taxable
11.43%Vanguard New York Municipal Money Market Fund(VYFXX)(0.16%)
8.53%Global X S&P 500 Catholic Values ETF(CATH)(0.29%)
4.23%Vanguard 500 Index ETF(VOO)(0.03%)
2.99%KLA Corporation(KLAC)(0.00%)
2.58%Apple Inc.(AAPL)(0.00%)
2.37%Schwab Fundamental US Large Company ETF(FNDX)(0.25%)
1.45%Schwab Fundamental international Equity ETF(FNDF)(0.25%)
1.30%Schwab Fundamental U.S. Small Company ETF(FNDA)(0.25%)
1.28%SoFi Select 500 ETF(SFY)(0.05%)
1.26%Schwab U.S. Small-Cap ETF(SCHA)(0.04%)
1.23%Broadcom Inc.(AVGO)(0.00%)
1.19%Global X NASDAQ 100 Covered Call ETF(QYLD)(0.61%)
1.07%AbbVie Inc.(ABBV)(0.00%)
0.96%Invesco QQQ Trust(QQQ)(0.20%)
0.83%ON Semiconductor Corporation(ON)(0.00%)
0.72%Vanguard Growth Index Fund ETF(VUG)(0.04%)
0.70%Global X S&P Catholic Values Developed ex-U.S. ETF(CEFA)(0.35%)
0.66%Amazon.com, Inc.(AMZN)(0.00%)
0.61%Alphabet Inc.(GOOGL)(0.00%)
0.61%NVIDIA Corporation(NVDA)(0.00%)
0.44%Vanguard FTSE Developed Markets Index Fund ETF(VEA)(0.06%)
0.33%Target Corporation(TGT)(0.00%)
0.29%Schwab Fundamental Emerging Markets Equity ETF(FNDE)(0.39%)
0.29%Tesla, Inc.(TSLA)(0.00%)
0.15%Vanguard Emerging Markets Stock Index Fund(VWO)(0.08%)
0.11%SoFi Next 500 ETF(SFYX)(0.06%)
0.07%Vanguard Small-Cap Index Fund ETF(VB)(0.05%)
Her 401(k)
6.15%JPMorgan Large Cap Growth R6(JLGMX)(0.44%)
5.69%Vanguard S&P Mid-Cap 400 Index Fund; Institutional(VSPMX)(0.08%)
2.83%Vanguard Target Retirement 2055 Fund; Investor(VFFVX)(0.08%)
0.04%Vanguard Institutional Index Fund; Institutional Plus(VIIIX)(0.02%)
His 401(k)
23.06%BlackRock Equity Index Fund(WBREOX)(0.02%)
Her IRA
2.36%Vanguard 500 Index ETF(VOO)(0.03%)
2.18%T Rowe Price Mid-Cap Growth Fund(RPMGX)(0.76%)
0.82%Vanguard Growth Index ETF(VUG)(0.04%)
0.68%Applied Materials Inc.(AMAT)(0.00%)
His IRA
3.19%Vanguard Treasury Money Market Fund; Investor(VUSXX)(0.09%)
1.94%Global X S&P 500 Catholic Values ETF(CATH)(0.29%)
1.84%Vanguard Federal Money Market Fund; Investor(VMFXX)(0.11%)
His Roth IRA
1.55%Vanguard Treasury Money Market Fund; Investor(VUSXX)(0.09%)
100.00%
Contributions
New Annual Contributions
$23,000 her 401(k) as a Roth contribution (no employer match)
$23,000 his 401(k) as a Roth contribution + employer match $15K
$120K their taxable
Available Funds
Funds available in her 401(k)
Vanguard Institutional Index Institutional Plus(VIIX)(0.02%)
JPMorgan Large Cap Growth R6 (JLGMX)(0.44%)
Vanguard Windsor II Admiral (VWNAX)(0.25%)
Vanguard S&P Mid-Cap 400 Index Institutional (VSPMX)(0.08%)
Neuberger Berman Genesis R6 (NRGSX)(0.74%)
Vanguard Small Cap Value Index Institutional(VSIIX)(0.06%)
American Funds Europacific Growth R6 (RERGX)(0.47%)
T. Rowe Price Balanced I (RBAIX)(0.47%)
Vanguard Target Retirement 2020 Fund (VTWNX)(0.08%)
Vanguard Target Retirement 2025 Fund (VTTVX)(0.08%)
Vanguard Target Retirement 2030 Fund (VTHRX)(0.08%)
Vanguard Target Retirement 2035 Fund (VTTHX)(0.08%)
Vanguard Target Retirement 2040 Fund (VFORX)(0.08%)
Vanguard Target Retirement 2045 Fund (FTIVX)(0.08%)
Vanguard Target Retirement 2050 Fund (VFIFX)(0.08%)
Vanguard Target Retirement 2055 Fund (VFFVX)(0.08%)
Vanguard Target Retirement 2060 Fund (VTTSX)(0.08%)
Vanguard Target Retirement 2065 Fund (VLXVX)(0.08%)
Vanguard Target Retirement Income Fund (VTINX)(0.08%)
Vanguard Total Bond Market Index (VBTIX)(0.04%)
Loomis Sayles Core Plus Bond N (NERNX)(0.40%)
Vanguard Short-Term Bond Index I (VBITX)(0.05%)
Vanguard Federal Money Market Investor (VMFXX)(0.11%)
Funds Available in His 401(k)
MyWayRetirement Index 2065 Fund(WMYAAX)(0.08%)
MyWayRetirement Index 2060 Fund (WMYAZX)(0.08%)
MyWayRetirement Index 2055 Fund (WMYAYX)(0.08%)
MyWayRetirement Index 2050 Fund (WMYAXX)(0.08%)
MyWayRetirement Index 2045 Fund (WMYAWX)(0.08%)
MyWayRetirement Index 2040 Fund (WMYAVX)(0.08%)
MyWayRetirement Index 2035 Fund (WMYAUX)(0.08%)
MyWayRetirement Index 2030 Fund (WMYATX)(0.08%)
MyWayRetirement Index 2025 Fund (WMYASX)(0.08%)
MyWayRetirement Index Retirement Fund (WMYBAX)(0.08%)
BlackRock Mid Cap Equity Index(WBRAAX)(0.03%)
BlackRock Russell 2000 Index(WBRREX)(0.03%)
MyWayRetirement Emerging Markets Fund (WMYALX)(0.55%)
MyWayRetirement Large Cap Growth Fund (WMYAEX)(0.34%)
MyWayRetirement Mid Cap Growth (WMYAFX)(0.55%)
MyWayRetirement Mid Cap Value (WMYAKX)(0.47%)
MyWayRetirement Real Estate (WMYAMX)(0.65%)
MyWayRetirement Small Cap Growth Fund (WMYAHX)(0.55%)
MyWayRetirement Small Cap Value Fund (WMYAIX)(0.47%)
BlackRock EAFE Equity Index Fund(WBREKX)(0.05%)
BlackRock Equity Index Fund (WBREOX)(0.02%)
MyWayRetirement Commodities (WMYAOX)(0.70%)
MyWayRetirement International Growth (WMYADX)(0.48%)
MyWayRetirement International Value(WCOVAX)(0.38%)
MyWayRetirement Large Cap Value Fund (WMYAJX)(0.42%)
MyWayRetirement Balanced Fund (WMYABX)(0.40%)
BlackRock U.S. Debt Index Fund(WBRUOX)(0.04%)
BlackRock U.S. TIPS Index Fund(WBRABX)(0.04%)
MyWayRetirement Core Bond Fund(WMYACX)(0.23%)
MyWayRetirement Global Bond (WMYANX)(0.37%)
MyWayRetirement Multi-Sector Bond(WMYAGX)(0.33%)
John Hancock Stable Value(0.42%)
Additional Background: We earn about $675K/year currently, with her earning a little more than him. We are thinking about trying to have a child (or maybe two) in the next two or three years. She works a high stress job and is considering semi-retiring, taking a less stressful and likely less lucrative job, or pursuing entrepreneurial endeavors in a couple years. He is a part owner of his employer, a small business, and he enjoys his work and isn’t eager to retire, although he thinks about working a little less at some point. Most of our portfolio is held with our retail bank, the same bank that owns the mortgages, although she has taxable accounts with Schwab and SoFi. We wouldn’t plan to regularly draw on our portfolio money until we reach closer to traditional retirement age, except maybe we’d draw from it to pay for a child’s education, put a down payment on an apartment for a parent or other family member, or do a major remodel.
Questions
1. Mortgage Debt. Are we right that we should prioritize getting our home mortgage below $750K because of the mortgage interest tax deduction? Is it that we should prioritize getting our total mortgage debt to $750K? That is, in terms of return is the best thing to do take our entire taxable assets and pay it toward the higher interest rate mortgage (the home mortgage as opposed to the rental property mortgage) and continue to do so with any money we save after maxing out our 401(k)s, until our combined mortgage balances on the two properties total $750K or less?
2. 401(k) Contributions. Is it right that we are making all our own contributions to our 401(k) as Roth? We’ve gotten that advice from different sources. Given where we are, does it make sense to explore the availability of a mega back door Roth or other adjustments to the 401(k) at his employer?
3. Prioritizing Investments. After maxing out our 401(k)s and getting our mortgage(s) below $750K, should we then be maxing out our contributions to our traditional IRAs--even though we can't claim the tax deduction?
4. HSA. He is thinking about signing up for an HSA qualified health plan at work, as he rarely uses medical services. If he does get an HSA, then after getting our mortgage balance down we will want to contribute to the HSA before contributing to our IRAs if we don't qualify for the deduction, right? Any advice on HSAs appreciated, including if there are risks of going with a high deductible plan. If his health suddenly changes, is the worst case that he has to wait until open enrollment to change his coverage?
5. Asset Allocation. Does our target allocation look OK? Any particular assets to focus on selling when trying to pay off our mortgage or get to our target allocation?
6. Stock Fund Choices. How important is it to sell the individual stocks and less diversified funds and put the money in broadly diversified funds? Approximately 11.2% of our portfolio is individual stock. In terms of diversified fund choice, we like the CATH and CEFA ETFs in particular because they screen for weaponry, but we generally like their other exclusions. We understand that means a little less diversification and higher fees, but we are willing to pay those prices in these cases. Are there risks that these are smaller, newer funds? CEFA in particular is small (net assets $12.72 million) and trades at a low volume (avg. vol. 1,012). Would it be OK to put all his or our future domestic stock allocations in CATH and our international developed allocations in CEFA? Does anyone have any recommendations for any similar funds? We are thinking about adding Xtrackers MSCI EMs ESG Leaders Equity ETF (EMSG) (0.20%) to our assets as emerging markets exposure. EMSG is also a smaller and lower volume fund. Its distribution yield is1.94% and 72% of the dividends are qualified if we are reading the annual statement right. Would it be reasonable for our portfolio allocation to be 70% CATH, 15% CEFA, 5% EMSG, and 10% bonds?
7. Bond Fund Choices. Most of our bond allocation is in VYFXX (NY Muni fund) in our taxable brokerage account. If we are using retiringwhen’s MM optimizer tool correctly (we have 10.73% as our state marginal rate and 38.8% as our federal rate), then VYFXX is better than USXX, but only barely 0.01% better than VUSXX over the last year. Does that sound right? We would probably do better to move our high yield savings emergency fund assets to VYFXX, or maybe put it all in BOXX?
8. Tax Efficient Fund Placement. Assuming an allocation of 70% CATH, 15% CEFA, 5% EMSG, and 10% VYFXX, then the order of tax efficiency from most efficient to least efficient would be first VYFXX (the interest isn’t taxable at the federal, state, or local, level for us as NY residents, right?), then CATH (0.97% dist. yield and all the dividends are qualified?), then CEFA (3.05% dist. yield; 96% of the dividends are qualified?; and foreign tax paid is 7.5% of the total distribution), and finally EMSG (1.94% dist. yield; 72% of the dividends are qualified?; and foreign taxes of 11.62% of gross foreign income)? So most efficient placement would be fill his Roth IRA with EMSG; then CEFA in whatever balance remains in his Roth IRA; and the VYFXX in his taxable and everything else CATH? Is there a tax efficiency calculator somewhere out there?
9. Credit Card Debt. Is it a bad idea to try to take advantage of 0% APR promotions on credit cards? He figures it's free money we can invest for the 18 or whatever month period. Is there a downside to that? Are the introductory bonus points or cash back offers preferable? We do use cards for cash back that we pay off each month.
10. Anything Else? Is there anything else we could be doing better or something we are doing wrong that isn’t covered above? Is there some additional information that would be helpful?
We are thankful for the Bogleheads community and have learned a lot from it. Putting this post together was a wonderful exercise. Thank you for any feedback you have about our portfolio or our questions!
Cheers!
Debt:
- $932K at 4.1% interest - Home mortgage - Payoff date March 2050 - Sale value approximately $2 million.
- $185K at 2.75% interest- Her rental property mortgage - Payoff date November 2036 - Rent net's $1350 after the building's maintenance payments and property tax - Sale value approximately $500K.
- $15K at 0.00% - His credit card - 0% promotional interest rate expiring September 2025.
- $1,132K total debt
Tax Rate:35% Federal (including NIIT, 38.8%) / 6.85% State / 3.876% Local; we itemize
State of Residence:New York
Age:She 35 / He 36
Target Asset Allocation:90% Stocks / 10% Bonds;
Target International Allocation: 22.22% of stocks (75% of the international stock in developed markets; 25% of the international stock in emerging markets)
- 70% US stock
- 15% Ex-US developed stock
- 5% Ex-US emerging stock
- 10% Bonds (treasury or muni funds
- 100%
Current Retirement Assets
Taxable
11.43%Vanguard New York Municipal Money Market Fund(VYFXX)(0.16%)
8.53%Global X S&P 500 Catholic Values ETF(CATH)(0.29%)
4.23%Vanguard 500 Index ETF(VOO)(0.03%)
2.99%KLA Corporation(KLAC)(0.00%)
2.58%Apple Inc.(AAPL)(0.00%)
2.37%Schwab Fundamental US Large Company ETF(FNDX)(0.25%)
1.45%Schwab Fundamental international Equity ETF(FNDF)(0.25%)
1.30%Schwab Fundamental U.S. Small Company ETF(FNDA)(0.25%)
1.28%SoFi Select 500 ETF(SFY)(0.05%)
1.26%Schwab U.S. Small-Cap ETF(SCHA)(0.04%)
1.23%Broadcom Inc.(AVGO)(0.00%)
1.19%Global X NASDAQ 100 Covered Call ETF(QYLD)(0.61%)
1.07%AbbVie Inc.(ABBV)(0.00%)
0.96%Invesco QQQ Trust(QQQ)(0.20%)
0.83%ON Semiconductor Corporation(ON)(0.00%)
0.72%Vanguard Growth Index Fund ETF(VUG)(0.04%)
0.70%Global X S&P Catholic Values Developed ex-U.S. ETF(CEFA)(0.35%)
0.66%Amazon.com, Inc.(AMZN)(0.00%)
0.61%Alphabet Inc.(GOOGL)(0.00%)
0.61%NVIDIA Corporation(NVDA)(0.00%)
0.44%Vanguard FTSE Developed Markets Index Fund ETF(VEA)(0.06%)
0.33%Target Corporation(TGT)(0.00%)
0.29%Schwab Fundamental Emerging Markets Equity ETF(FNDE)(0.39%)
0.29%Tesla, Inc.(TSLA)(0.00%)
0.15%Vanguard Emerging Markets Stock Index Fund(VWO)(0.08%)
0.11%SoFi Next 500 ETF(SFYX)(0.06%)
0.07%Vanguard Small-Cap Index Fund ETF(VB)(0.05%)
Her 401(k)
6.15%JPMorgan Large Cap Growth R6(JLGMX)(0.44%)
5.69%Vanguard S&P Mid-Cap 400 Index Fund; Institutional(VSPMX)(0.08%)
2.83%Vanguard Target Retirement 2055 Fund; Investor(VFFVX)(0.08%)
0.04%Vanguard Institutional Index Fund; Institutional Plus(VIIIX)(0.02%)
His 401(k)
23.06%BlackRock Equity Index Fund(WBREOX)(0.02%)
Her IRA
2.36%Vanguard 500 Index ETF(VOO)(0.03%)
2.18%T Rowe Price Mid-Cap Growth Fund(RPMGX)(0.76%)
0.82%Vanguard Growth Index ETF(VUG)(0.04%)
0.68%Applied Materials Inc.(AMAT)(0.00%)
His IRA
3.19%Vanguard Treasury Money Market Fund; Investor(VUSXX)(0.09%)
1.94%Global X S&P 500 Catholic Values ETF(CATH)(0.29%)
1.84%Vanguard Federal Money Market Fund; Investor(VMFXX)(0.11%)
His Roth IRA
1.55%Vanguard Treasury Money Market Fund; Investor(VUSXX)(0.09%)
100.00%
Contributions
New Annual Contributions
$23,000 her 401(k) as a Roth contribution (no employer match)
$23,000 his 401(k) as a Roth contribution + employer match $15K
$120K their taxable
Available Funds
Funds available in her 401(k)
Vanguard Institutional Index Institutional Plus(VIIX)(0.02%)
JPMorgan Large Cap Growth R6 (JLGMX)(0.44%)
Vanguard Windsor II Admiral (VWNAX)(0.25%)
Vanguard S&P Mid-Cap 400 Index Institutional (VSPMX)(0.08%)
Neuberger Berman Genesis R6 (NRGSX)(0.74%)
Vanguard Small Cap Value Index Institutional(VSIIX)(0.06%)
American Funds Europacific Growth R6 (RERGX)(0.47%)
T. Rowe Price Balanced I (RBAIX)(0.47%)
Vanguard Target Retirement 2020 Fund (VTWNX)(0.08%)
Vanguard Target Retirement 2025 Fund (VTTVX)(0.08%)
Vanguard Target Retirement 2030 Fund (VTHRX)(0.08%)
Vanguard Target Retirement 2035 Fund (VTTHX)(0.08%)
Vanguard Target Retirement 2040 Fund (VFORX)(0.08%)
Vanguard Target Retirement 2045 Fund (FTIVX)(0.08%)
Vanguard Target Retirement 2050 Fund (VFIFX)(0.08%)
Vanguard Target Retirement 2055 Fund (VFFVX)(0.08%)
Vanguard Target Retirement 2060 Fund (VTTSX)(0.08%)
Vanguard Target Retirement 2065 Fund (VLXVX)(0.08%)
Vanguard Target Retirement Income Fund (VTINX)(0.08%)
Vanguard Total Bond Market Index (VBTIX)(0.04%)
Loomis Sayles Core Plus Bond N (NERNX)(0.40%)
Vanguard Short-Term Bond Index I (VBITX)(0.05%)
Vanguard Federal Money Market Investor (VMFXX)(0.11%)
Funds Available in His 401(k)
MyWayRetirement Index 2065 Fund(WMYAAX)(0.08%)
MyWayRetirement Index 2060 Fund (WMYAZX)(0.08%)
MyWayRetirement Index 2055 Fund (WMYAYX)(0.08%)
MyWayRetirement Index 2050 Fund (WMYAXX)(0.08%)
MyWayRetirement Index 2045 Fund (WMYAWX)(0.08%)
MyWayRetirement Index 2040 Fund (WMYAVX)(0.08%)
MyWayRetirement Index 2035 Fund (WMYAUX)(0.08%)
MyWayRetirement Index 2030 Fund (WMYATX)(0.08%)
MyWayRetirement Index 2025 Fund (WMYASX)(0.08%)
MyWayRetirement Index Retirement Fund (WMYBAX)(0.08%)
BlackRock Mid Cap Equity Index(WBRAAX)(0.03%)
BlackRock Russell 2000 Index(WBRREX)(0.03%)
MyWayRetirement Emerging Markets Fund (WMYALX)(0.55%)
MyWayRetirement Large Cap Growth Fund (WMYAEX)(0.34%)
MyWayRetirement Mid Cap Growth (WMYAFX)(0.55%)
MyWayRetirement Mid Cap Value (WMYAKX)(0.47%)
MyWayRetirement Real Estate (WMYAMX)(0.65%)
MyWayRetirement Small Cap Growth Fund (WMYAHX)(0.55%)
MyWayRetirement Small Cap Value Fund (WMYAIX)(0.47%)
BlackRock EAFE Equity Index Fund(WBREKX)(0.05%)
BlackRock Equity Index Fund (WBREOX)(0.02%)
MyWayRetirement Commodities (WMYAOX)(0.70%)
MyWayRetirement International Growth (WMYADX)(0.48%)
MyWayRetirement International Value(WCOVAX)(0.38%)
MyWayRetirement Large Cap Value Fund (WMYAJX)(0.42%)
MyWayRetirement Balanced Fund (WMYABX)(0.40%)
BlackRock U.S. Debt Index Fund(WBRUOX)(0.04%)
BlackRock U.S. TIPS Index Fund(WBRABX)(0.04%)
MyWayRetirement Core Bond Fund(WMYACX)(0.23%)
MyWayRetirement Global Bond (WMYANX)(0.37%)
MyWayRetirement Multi-Sector Bond(WMYAGX)(0.33%)
John Hancock Stable Value(0.42%)
Additional Background: We earn about $675K/year currently, with her earning a little more than him. We are thinking about trying to have a child (or maybe two) in the next two or three years. She works a high stress job and is considering semi-retiring, taking a less stressful and likely less lucrative job, or pursuing entrepreneurial endeavors in a couple years. He is a part owner of his employer, a small business, and he enjoys his work and isn’t eager to retire, although he thinks about working a little less at some point. Most of our portfolio is held with our retail bank, the same bank that owns the mortgages, although she has taxable accounts with Schwab and SoFi. We wouldn’t plan to regularly draw on our portfolio money until we reach closer to traditional retirement age, except maybe we’d draw from it to pay for a child’s education, put a down payment on an apartment for a parent or other family member, or do a major remodel.
Questions
1. Mortgage Debt. Are we right that we should prioritize getting our home mortgage below $750K because of the mortgage interest tax deduction? Is it that we should prioritize getting our total mortgage debt to $750K? That is, in terms of return is the best thing to do take our entire taxable assets and pay it toward the higher interest rate mortgage (the home mortgage as opposed to the rental property mortgage) and continue to do so with any money we save after maxing out our 401(k)s, until our combined mortgage balances on the two properties total $750K or less?
2. 401(k) Contributions. Is it right that we are making all our own contributions to our 401(k) as Roth? We’ve gotten that advice from different sources. Given where we are, does it make sense to explore the availability of a mega back door Roth or other adjustments to the 401(k) at his employer?
3. Prioritizing Investments. After maxing out our 401(k)s and getting our mortgage(s) below $750K, should we then be maxing out our contributions to our traditional IRAs--even though we can't claim the tax deduction?
4. HSA. He is thinking about signing up for an HSA qualified health plan at work, as he rarely uses medical services. If he does get an HSA, then after getting our mortgage balance down we will want to contribute to the HSA before contributing to our IRAs if we don't qualify for the deduction, right? Any advice on HSAs appreciated, including if there are risks of going with a high deductible plan. If his health suddenly changes, is the worst case that he has to wait until open enrollment to change his coverage?
5. Asset Allocation. Does our target allocation look OK? Any particular assets to focus on selling when trying to pay off our mortgage or get to our target allocation?
6. Stock Fund Choices. How important is it to sell the individual stocks and less diversified funds and put the money in broadly diversified funds? Approximately 11.2% of our portfolio is individual stock. In terms of diversified fund choice, we like the CATH and CEFA ETFs in particular because they screen for weaponry, but we generally like their other exclusions. We understand that means a little less diversification and higher fees, but we are willing to pay those prices in these cases. Are there risks that these are smaller, newer funds? CEFA in particular is small (net assets $12.72 million) and trades at a low volume (avg. vol. 1,012). Would it be OK to put all his or our future domestic stock allocations in CATH and our international developed allocations in CEFA? Does anyone have any recommendations for any similar funds? We are thinking about adding Xtrackers MSCI EMs ESG Leaders Equity ETF (EMSG) (0.20%) to our assets as emerging markets exposure. EMSG is also a smaller and lower volume fund. Its distribution yield is1.94% and 72% of the dividends are qualified if we are reading the annual statement right. Would it be reasonable for our portfolio allocation to be 70% CATH, 15% CEFA, 5% EMSG, and 10% bonds?
7. Bond Fund Choices. Most of our bond allocation is in VYFXX (NY Muni fund) in our taxable brokerage account. If we are using retiringwhen’s MM optimizer tool correctly (we have 10.73% as our state marginal rate and 38.8% as our federal rate), then VYFXX is better than USXX, but only barely 0.01% better than VUSXX over the last year. Does that sound right? We would probably do better to move our high yield savings emergency fund assets to VYFXX, or maybe put it all in BOXX?
8. Tax Efficient Fund Placement. Assuming an allocation of 70% CATH, 15% CEFA, 5% EMSG, and 10% VYFXX, then the order of tax efficiency from most efficient to least efficient would be first VYFXX (the interest isn’t taxable at the federal, state, or local, level for us as NY residents, right?), then CATH (0.97% dist. yield and all the dividends are qualified?), then CEFA (3.05% dist. yield; 96% of the dividends are qualified?; and foreign tax paid is 7.5% of the total distribution), and finally EMSG (1.94% dist. yield; 72% of the dividends are qualified?; and foreign taxes of 11.62% of gross foreign income)? So most efficient placement would be fill his Roth IRA with EMSG; then CEFA in whatever balance remains in his Roth IRA; and the VYFXX in his taxable and everything else CATH? Is there a tax efficiency calculator somewhere out there?
9. Credit Card Debt. Is it a bad idea to try to take advantage of 0% APR promotions on credit cards? He figures it's free money we can invest for the 18 or whatever month period. Is there a downside to that? Are the introductory bonus points or cash back offers preferable? We do use cards for cash back that we pay off each month.
10. Anything Else? Is there anything else we could be doing better or something we are doing wrong that isn’t covered above? Is there some additional information that would be helpful?
We are thankful for the Bogleheads community and have learned a lot from it. Putting this post together was a wonderful exercise. Thank you for any feedback you have about our portfolio or our questions!
Cheers!
Statistics: Posted by bluewaters — Sun Nov 03, 2024 10:24 pm — Replies 0 — Views 46