Emergency funds: About 3 months of expenses in cash or cash equivalents (SGOV - iShares 0-3 Month Treasury Bond ETF).
Debt:
Mortgage ~ $1.1M @ 2.625%
Car ~ $22k @ 2.5%
Tax Filing Status: Married Filing Jointly
Tax Rate:
35% Federal
0% State
State of Residence:
Washington
Age:
Me: 36
Wife: 34
Desired Asset allocation:
100% stocks / 0% bonds -- Is this a mistake? We are young HENRYs. Househould pre-tax comp in 2024 ~ $800k.
Desired International allocation: 25% of stocks
Total Assets: $1.3M (not inclusive of primary residence equity)
Current assets
Taxable Account 1 at Schwab
17% SCHWAB S&P 500 INDEX (SWPPX) (0.02%)
6% ISHARES CORE MSCI TOTL INTL STCK ETF (IXUS) (0.07%)
2% SCHWAB US SMALL CAP ETF (SCHA) (0.04%)
0.8% FIDELITY WISE ORIGIN BITCOIN FUND (FBTC) (0.25%)
0.6% INVESCO NASDAQ 100 ETF (QQQM) (0.15%)
Taxable Account 2 at Fidelity
<1% VANGUARD INDEX FDS VANGUARD TOTAL STK MKT ETF (VTI) (0.03%)
<1% ISHARES CORE MSCI TOTL INTL STCK ETF (IXUS) (0.07%)
His 401k
18% Vanguard Fiduciary Trust Company Institutional 500 Index Trust (?unknown ticker; tracks s&p500) (0.011%)
7% Fidelity® International Index Fund (FSPSX) (0.035%)
2.5% Vanguard Institutional Extended Market Index Trust (odd that the tickers aren't showing up; tracks Standard & Poor's Completion Index) (0.023%)
Company match 7%
His 457b
8% VANG INST INDEX PLUS (VIIX) (0.02%)
3% Fidelity® International Index Fund (FSPSX) (0.035%)
His ERISA DC Restoration
1% VANG INST INDEX PLUS (VIIX) (0.02%)
His Roth IRA
9% SCHWAB US BROAD MARKET ETF (SCHB) (0.03%)
3.5% VANGUARD TOTAL INTERNATIONAL STK ETF (VXUS) (0.08%)
Her 403b
5% VANG INST INDEX PLUS (VIIX) (0.02%)
2% VANG DEV MKT IDX IS (VTMNX (0.09%)
This acct is from prior employer. No longer contributing. Wife has new job that will have 401k, but no company match.
Her Roth IRA
3% SCHWAB US BROAD MARKET ETF (SCHB) (0.03%)
1% VANGUARD TOTAL INTERNATIONAL STK ETF (VXUS) (0.08%)
Other/Misc:
5% Cash (emergency funds; saving for new house)
4% Real Estate syndication (illiquid)
1% Masterworks (art)
Contributions
New annual Contributions
His 401k: $36,000 my contributions (includes some Roth 401k) + $30,475 employee contributions into His 401k (also specify any employer matching contributions)
His 457b: $23,500
Her 401k: New job and needs to get set up, but employee has 0 match. Will contribute $23,500 in 2025.
His Roth IRA: $7000 (backdoor)
Her Roth IRA: $7000 (backdoor)
Other: $15k-20k extra per month. Wondering how to allocate this (retirement vs saving for a new house). See question below.
Available funds
Funds available in his 401(k)
PIM ALL ASSET INST (PAAIX) (1.87%)
VANGUARD TARGET 2020
VANGUARD TARGET 2025
VANGUARD TARGET 2030
VANGUARD TARGET 2035
VANGUARD TARGET 2040
VANGUARD TARGET 2045
VANGUARD TARGET 2050
VANGUARD TARGET 2055
VANGUARD TARGET 2060
VANGUARD TARGET 2065
Vanguard Fiduciary Trust Company Target Retirement Income Trust (0.0375%)
Managed Income Portfolio II Class 3 (0.024%)
Prudential Core Plus Bond Fund Class 5 (0.12%)
Vanguard Institutional Total Bond Market Index Trust (not sure why ticker not showing up) (0.02%)
Vanguard Federal Money Market Fund Investor Shares (VMFXX) (0.11%)
Fidelity Growth Company Commingled Pool Class O (not sure why ticker not showing up; actively managed fund trying to outperform Russell 3000 growth) (0.35%)
Invesco Diversified Dividend Fund R5 Class (DDFIX) (0.54%)
Vanguard Fiduciary Trust Company Institutional 500 Index Trust (?unknown ticker; tracks s&p500) (0.011%)
Vanguard Institutional Extended Market Index Trust (odd that the tickers aren't showing up right now; tracks Standard & Poor's Completion Index) (0.023%)
Westfield Small/Mid Cap Growth Equity CIT Class D (no ticker specified) (0.7%)
Victory Integrity Small Cap Value Collective Fund C (no ticker specified) (0.75%)
Capital Group EuroPacific Growth TrustSM (US) Class U2 (no ticker specified) (0.43%)
Dodge & Cox International Stock Fund Class X (DOXFX) (0.52%)
FID INTL INDEX (FSPSX) (0.035%)
Questions:
1. Anything you would change about current asset allocation? My plan is 100% equities (75 US/25 international) until we are about 5 years out from retirement, and then shift to a more conservative allocation. We are two young high earners with no plans to retire for at least 10-15 years (maybe longer), so it seems like we should be able to ride out a bear market. Moreover, our income is likely to increase quite a bit. $800k in 2024 and should be well above $1M in 2025. Is this reasonable? How do most approach reducing risk as retirement gets closer?
2. We would like to start saving for a new house with time horizon 4-5 years. Target downpayment $600k on a $3M house (VHCOL). Taxable brokerage has about $330k in equities that could be sold if needed (most will be shifting from short-term to long-term cap gains in next few months). We have an extra $15-20k per month after taxes/retirement accts/expenses, which I was putting into the stock market in 2024, but I am thinking of allocating this towards cash (SGOV). We also have about $400k in current home equity, but haven't decided whether we would sell or rent it out in future. On one hand, it's hard to let go of a 2.625% rate in a VHCOL area. On the other hand, I'm not sure I want to be a landlord (young kids and job is enough).
Debt:
Mortgage ~ $1.1M @ 2.625%
Car ~ $22k @ 2.5%
Tax Filing Status: Married Filing Jointly
Tax Rate:
35% Federal
0% State
State of Residence:
Washington
Age:
Me: 36
Wife: 34
Desired Asset allocation:
100% stocks / 0% bonds -- Is this a mistake? We are young HENRYs. Househould pre-tax comp in 2024 ~ $800k.
Desired International allocation: 25% of stocks
Total Assets: $1.3M (not inclusive of primary residence equity)
Current assets
Taxable Account 1 at Schwab
17% SCHWAB S&P 500 INDEX (SWPPX) (0.02%)
6% ISHARES CORE MSCI TOTL INTL STCK ETF (IXUS) (0.07%)
2% SCHWAB US SMALL CAP ETF (SCHA) (0.04%)
0.8% FIDELITY WISE ORIGIN BITCOIN FUND (FBTC) (0.25%)
0.6% INVESCO NASDAQ 100 ETF (QQQM) (0.15%)
Taxable Account 2 at Fidelity
<1% VANGUARD INDEX FDS VANGUARD TOTAL STK MKT ETF (VTI) (0.03%)
<1% ISHARES CORE MSCI TOTL INTL STCK ETF (IXUS) (0.07%)
His 401k
18% Vanguard Fiduciary Trust Company Institutional 500 Index Trust (?unknown ticker; tracks s&p500) (0.011%)
7% Fidelity® International Index Fund (FSPSX) (0.035%)
2.5% Vanguard Institutional Extended Market Index Trust (odd that the tickers aren't showing up; tracks Standard & Poor's Completion Index) (0.023%)
Company match 7%
His 457b
8% VANG INST INDEX PLUS (VIIX) (0.02%)
3% Fidelity® International Index Fund (FSPSX) (0.035%)
His ERISA DC Restoration
1% VANG INST INDEX PLUS (VIIX) (0.02%)
His Roth IRA
9% SCHWAB US BROAD MARKET ETF (SCHB) (0.03%)
3.5% VANGUARD TOTAL INTERNATIONAL STK ETF (VXUS) (0.08%)
Her 403b
5% VANG INST INDEX PLUS (VIIX) (0.02%)
2% VANG DEV MKT IDX IS (VTMNX (0.09%)
This acct is from prior employer. No longer contributing. Wife has new job that will have 401k, but no company match.
Her Roth IRA
3% SCHWAB US BROAD MARKET ETF (SCHB) (0.03%)
1% VANGUARD TOTAL INTERNATIONAL STK ETF (VXUS) (0.08%)
Other/Misc:
5% Cash (emergency funds; saving for new house)
4% Real Estate syndication (illiquid)
1% Masterworks (art)
Contributions
New annual Contributions
His 401k: $36,000 my contributions (includes some Roth 401k) + $30,475 employee contributions into His 401k (also specify any employer matching contributions)
His 457b: $23,500
Her 401k: New job and needs to get set up, but employee has 0 match. Will contribute $23,500 in 2025.
His Roth IRA: $7000 (backdoor)
Her Roth IRA: $7000 (backdoor)
Other: $15k-20k extra per month. Wondering how to allocate this (retirement vs saving for a new house). See question below.
Available funds
Funds available in his 401(k)
PIM ALL ASSET INST (PAAIX) (1.87%)
VANGUARD TARGET 2020
VANGUARD TARGET 2025
VANGUARD TARGET 2030
VANGUARD TARGET 2035
VANGUARD TARGET 2040
VANGUARD TARGET 2045
VANGUARD TARGET 2050
VANGUARD TARGET 2055
VANGUARD TARGET 2060
VANGUARD TARGET 2065
Vanguard Fiduciary Trust Company Target Retirement Income Trust (0.0375%)
Managed Income Portfolio II Class 3 (0.024%)
Prudential Core Plus Bond Fund Class 5 (0.12%)
Vanguard Institutional Total Bond Market Index Trust (not sure why ticker not showing up) (0.02%)
Vanguard Federal Money Market Fund Investor Shares (VMFXX) (0.11%)
Fidelity Growth Company Commingled Pool Class O (not sure why ticker not showing up; actively managed fund trying to outperform Russell 3000 growth) (0.35%)
Invesco Diversified Dividend Fund R5 Class (DDFIX) (0.54%)
Vanguard Fiduciary Trust Company Institutional 500 Index Trust (?unknown ticker; tracks s&p500) (0.011%)
Vanguard Institutional Extended Market Index Trust (odd that the tickers aren't showing up right now; tracks Standard & Poor's Completion Index) (0.023%)
Westfield Small/Mid Cap Growth Equity CIT Class D (no ticker specified) (0.7%)
Victory Integrity Small Cap Value Collective Fund C (no ticker specified) (0.75%)
Capital Group EuroPacific Growth TrustSM (US) Class U2 (no ticker specified) (0.43%)
Dodge & Cox International Stock Fund Class X (DOXFX) (0.52%)
FID INTL INDEX (FSPSX) (0.035%)
Questions:
1. Anything you would change about current asset allocation? My plan is 100% equities (75 US/25 international) until we are about 5 years out from retirement, and then shift to a more conservative allocation. We are two young high earners with no plans to retire for at least 10-15 years (maybe longer), so it seems like we should be able to ride out a bear market. Moreover, our income is likely to increase quite a bit. $800k in 2024 and should be well above $1M in 2025. Is this reasonable? How do most approach reducing risk as retirement gets closer?
2. We would like to start saving for a new house with time horizon 4-5 years. Target downpayment $600k on a $3M house (VHCOL). Taxable brokerage has about $330k in equities that could be sold if needed (most will be shifting from short-term to long-term cap gains in next few months). We have an extra $15-20k per month after taxes/retirement accts/expenses, which I was putting into the stock market in 2024, but I am thinking of allocating this towards cash (SGOV). We also have about $400k in current home equity, but haven't decided whether we would sell or rent it out in future. On one hand, it's hard to let go of a 2.625% rate in a VHCOL area. On the other hand, I'm not sure I want to be a landlord (young kids and job is enough).
Statistics: Posted by camera_action — Thu Jan 02, 2025 2:36 pm