Hi All,
I've been going with the 3-fund portfolio approach throughout my 30s with good success, and as I look to re-allocating a bit more into bonds and also evaluating a $100K 3-month T-bill ladder in my taxable account as rates begin to fall I was looking for some advice.
As background:
Have EF, no debt
State of residence: CA
Tax Rate: Cusp of 32/35% federal, 9.3% State; Single filer
Currently 85/15 bonds looking to move closer to 80/20; (~25-30% Int'l equities in my stock allocation)
Plan is to retire or at least move to a lower paying less stressful/time intensive job at 55, target is $4M portfolio with a 3% - 4% draw down rate depending on market performance which I'm currently ahead of.
Total Portfolio ~$1.6M
Taxable ~$760K (48%):
36% - $570K IShares total US Stock Market ETF (ITOT)
4% - $70K Vanguard Total Int'l Index Fund (VXUS)
6% - $100K 3-Month T-Bill ladder (3 tranches 1 month apart)
1% - $20K Money Market
401K ~380K (23%)
18% - $295K State Street Total International IDX (0.05% ER)
5% - $85K State Street US Bond Index (0.02% ER)
Roth IRA ~420K (26%)
26% Fidelity Total Market Fund (FSKAX)
HSA ~30K (2%)
2% Fidelity Total Market Fund (FSKAX)
I-Bonds ~20K (1%)
Total Allocation:
63% US
23% Intl
14% Bonds
Based on this summary, I'm looking to increase bonds a bit closer to 20% as I slowly transition to an eventual 60/40 split in retirement. I'm not that well-versed in bond strategies so was wondering based on CA and my generally high tax bracket, if anyone has advice on best option(s):
1. As T-bill yields fall I can either (1) buy into tax exempt bonds like MUNI? or (2) transition it to VXUS and offset in my 401K
2. As far as my 401K, I have 3 bond options. The SS Total US bond fund I'm currently in, as well as Galliard Stable Return Fund E (0.32% ER) and MetWest Total Return Bond Fund Class Z1 (0.25% ER). I don't know much about the other two but looks like first one is a mix of various A-AAA bonds and the other is investing in fixed income securities, I'm assuming just sticking with total US is still best or any reco on splitting?
Increasing my bonds currently would still drop by International under a 75/25 split, but in the past couple of years I've been buying in my taxable into VXUS instead to make up for it. Currently I max out my 401K (+25% company match no limit), I megabackdoor into Roth IRA for the remaining space (~$40K), backdoor Roth IRA, max out my HSA, and still have some extra I throw into taxable. So my 401K and new money into taxable is essentially what I've been using to re-balance.
Thanks!
I've been going with the 3-fund portfolio approach throughout my 30s with good success, and as I look to re-allocating a bit more into bonds and also evaluating a $100K 3-month T-bill ladder in my taxable account as rates begin to fall I was looking for some advice.
As background:
Have EF, no debt
State of residence: CA
Tax Rate: Cusp of 32/35% federal, 9.3% State; Single filer
Currently 85/15 bonds looking to move closer to 80/20; (~25-30% Int'l equities in my stock allocation)
Plan is to retire or at least move to a lower paying less stressful/time intensive job at 55, target is $4M portfolio with a 3% - 4% draw down rate depending on market performance which I'm currently ahead of.
Total Portfolio ~$1.6M
Taxable ~$760K (48%):
36% - $570K IShares total US Stock Market ETF (ITOT)
4% - $70K Vanguard Total Int'l Index Fund (VXUS)
6% - $100K 3-Month T-Bill ladder (3 tranches 1 month apart)
1% - $20K Money Market
401K ~380K (23%)
18% - $295K State Street Total International IDX (0.05% ER)
5% - $85K State Street US Bond Index (0.02% ER)
Roth IRA ~420K (26%)
26% Fidelity Total Market Fund (FSKAX)
HSA ~30K (2%)
2% Fidelity Total Market Fund (FSKAX)
I-Bonds ~20K (1%)
Total Allocation:
63% US
23% Intl
14% Bonds
Based on this summary, I'm looking to increase bonds a bit closer to 20% as I slowly transition to an eventual 60/40 split in retirement. I'm not that well-versed in bond strategies so was wondering based on CA and my generally high tax bracket, if anyone has advice on best option(s):
1. As T-bill yields fall I can either (1) buy into tax exempt bonds like MUNI? or (2) transition it to VXUS and offset in my 401K
2. As far as my 401K, I have 3 bond options. The SS Total US bond fund I'm currently in, as well as Galliard Stable Return Fund E (0.32% ER) and MetWest Total Return Bond Fund Class Z1 (0.25% ER). I don't know much about the other two but looks like first one is a mix of various A-AAA bonds and the other is investing in fixed income securities, I'm assuming just sticking with total US is still best or any reco on splitting?
Increasing my bonds currently would still drop by International under a 75/25 split, but in the past couple of years I've been buying in my taxable into VXUS instead to make up for it. Currently I max out my 401K (+25% company match no limit), I megabackdoor into Roth IRA for the remaining space (~$40K), backdoor Roth IRA, max out my HSA, and still have some extra I throw into taxable. So my 401K and new money into taxable is essentially what I've been using to re-balance.
Thanks!
Statistics: Posted by Strifey — Tue Jan 07, 2025 1:48 pm — Replies 2 — Views 118