Fellow Bogleheads -
It has been over four years since we began investing based on the advice we received in this thread: viewtopic.php?t=330730.
We have revisited that thread many times and originally planned to post an update at the five-year mark. However, after updating our net worth and expense spreadsheets for the past year, we realized that we had achieved financial independence based on the 4% rule (a pleasant surprise since we were not thinking about it). Although I am still a mid-career academic (we are a single-income household) and do not anticipate retiring anytime soon, this milestone seemed like a good time to check in with this community to see if our portfolio could use any fine-tuning.
Emergency funds: Yes. Stable job (tenured college professor).
Debt: No debt.
Tax Filing Status: Married Filing Jointly.
Tax Rate: 24% Federal, 5.75% State.
State of Residence: VA.
Ages: 39/38.
Current asset allocation: 90% stocks / 10% bonds.
Current international allocation: 40% of stocks.
Current portfolio: $1.6M (includes savings for the downpayment of a house)
Current annual expenses: A little over 60K (not including taxes).
Taxable: 700K (VTSAX, VTIAX)
Roth IRAs (both his and her): 100K (VTSAX)
Tax-deferred investments in 403(b), 457(b), and 401(a): 500K (FXAIX, FTIHX, FXNAX)
I-bonds: 110K
Cash: 20K in BofA
Set aside for future house downpayment: 100K (Vanguard Treasury Money Market Fund)
529: 80K (VA invest529 plan)
Asset allocation: US Stocks 48%, International Stocks 32%, US Bonds 20%
Our DD is in elementary school.
We plan to have one more child.
Questions
1. We believe we have the option of making Roth contributions to the 403(b) and 457(b) plans. Is this something we should consider doing?
2. We understand that asset allocation is a personal decision. We chose this asset allocation over four years ago and stuck with it. As per our IPS, we have the following glide path (stocks/bonds/TIPS), which mirrors Vanguard Target Retirement Funds:
Age 40: 90/10/0
Age 45: 80/20/0
Age 50: 75/25/0
Age 55: 65/35/0
Age 60: 65/35/0
Age 65: 60/30/10
I love my job and do not anticipate retiring soon. Do you have any advice on the above glide path?
3. We have not yet purchased a home because we are uncertain about staying in our current city long-term. We are happy with our rental and plan to continue here for at least a couple more years. Are there any compelling arguments in favor of buying a house, primarily from an asset diversification standpoint? While I understand not everyone views a home as an “asset,” does it offer a meaningful diversification benefit when looking at the bigger picture?
4. For the past five years, we have been purchasing I Bonds annually ($10K for him, $10K for her). They currently count toward our bond allocation and serve as a second-tier emergency fund. Should we continue investing in I Bonds going forward? If not, do you recommend a better alternative? Shall we just continue investing in the US Total Bond Market Fund (where we are currently investing our bond allocation)?
5. If there is anything else in my portfolio or financial setup that could use fine-tuning, I would love to hear your suggestions.
6. have not devoted as much attention to insurance planning as I have to my investment strategy. Currently, I am enrolled in TLD and life insurance policies through my employer, but I need to review the specifics soon. Should I consider purchasing a separate term life insurance policy and possibly an umbrella insurance policy? If so, how much coverage would be appropriate for my situation?
It has been over four years since we began investing based on the advice we received in this thread: viewtopic.php?t=330730.
We have revisited that thread many times and originally planned to post an update at the five-year mark. However, after updating our net worth and expense spreadsheets for the past year, we realized that we had achieved financial independence based on the 4% rule (a pleasant surprise since we were not thinking about it). Although I am still a mid-career academic (we are a single-income household) and do not anticipate retiring anytime soon, this milestone seemed like a good time to check in with this community to see if our portfolio could use any fine-tuning.
Emergency funds: Yes. Stable job (tenured college professor).
Debt: No debt.
Tax Filing Status: Married Filing Jointly.
Tax Rate: 24% Federal, 5.75% State.
State of Residence: VA.
Ages: 39/38.
Current asset allocation: 90% stocks / 10% bonds.
Current international allocation: 40% of stocks.
Current portfolio: $1.6M (includes savings for the downpayment of a house)
Current annual expenses: A little over 60K (not including taxes).
Taxable: 700K (VTSAX, VTIAX)
Roth IRAs (both his and her): 100K (VTSAX)
Tax-deferred investments in 403(b), 457(b), and 401(a): 500K (FXAIX, FTIHX, FXNAX)
I-bonds: 110K
Cash: 20K in BofA
Set aside for future house downpayment: 100K (Vanguard Treasury Money Market Fund)
529: 80K (VA invest529 plan)
Asset allocation: US Stocks 48%, International Stocks 32%, US Bonds 20%
Our DD is in elementary school.
We plan to have one more child.
Questions
1. We believe we have the option of making Roth contributions to the 403(b) and 457(b) plans. Is this something we should consider doing?
2. We understand that asset allocation is a personal decision. We chose this asset allocation over four years ago and stuck with it. As per our IPS, we have the following glide path (stocks/bonds/TIPS), which mirrors Vanguard Target Retirement Funds:
Age 40: 90/10/0
Age 45: 80/20/0
Age 50: 75/25/0
Age 55: 65/35/0
Age 60: 65/35/0
Age 65: 60/30/10
I love my job and do not anticipate retiring soon. Do you have any advice on the above glide path?
3. We have not yet purchased a home because we are uncertain about staying in our current city long-term. We are happy with our rental and plan to continue here for at least a couple more years. Are there any compelling arguments in favor of buying a house, primarily from an asset diversification standpoint? While I understand not everyone views a home as an “asset,” does it offer a meaningful diversification benefit when looking at the bigger picture?
4. For the past five years, we have been purchasing I Bonds annually ($10K for him, $10K for her). They currently count toward our bond allocation and serve as a second-tier emergency fund. Should we continue investing in I Bonds going forward? If not, do you recommend a better alternative? Shall we just continue investing in the US Total Bond Market Fund (where we are currently investing our bond allocation)?
5. If there is anything else in my portfolio or financial setup that could use fine-tuning, I would love to hear your suggestions.
6. have not devoted as much attention to insurance planning as I have to my investment strategy. Currently, I am enrolled in TLD and life insurance policies through my employer, but I need to review the specifics soon. Should I consider purchasing a separate term life insurance policy and possibly an umbrella insurance policy? If so, how much coverage would be appropriate for my situation?
Statistics: Posted by HasHas — Sun Jan 26, 2025 1:20 pm — Replies 2 — Views 320
