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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: MrD on June 29, 2016, 12:27:45 PM

Title: Anyone mind taking a look at my investment allocations
Post by: MrD on June 29, 2016, 12:27:45 PM

Goal is to mirror what I have in my 401k through out all 4 accounts. We have a 17-20 year time horizon before retirement. Any tips/advice are welcome.

Allocation

Wife:

401k (will be maxed every year going forward) - Balance: 26,000

- 10% Bond Index / Bond Market Index Separate Account-R6 / Expense: 0.41%
- 65% SP500 Index / LargeCap S&P 500 Index Separate Account-R6 / Expense: 0.31%
- 10% SmallCap Index / SmallCap S&P 600 Index Separate Account-R6 / Expense: 0.31%
- 10% International SmallCap Index / International SmallCap Separate Account-R6 / Expense: 1.46%

Can switch the International to REREX at 0.84% or get rid of it all together if it makes sense.

ROTH IRA (will be maxed every year going forward) - Balance:  6,000

- 100% Vangaurd Target 2055 / Exp: 0.16%

Me:

401k (will be maxed every year going forward) - Balance: 100,000

- 10% Bond Index / NT AGGREGATE BD IDX / Expense: 0.0525%
- 65% SP500 Index / NT S&P 500 INDEX / Expense: 0.02%
- 20% International Index / NT ACWI EX-US INDEX / Expense: 0.15%
- 5% Small Cap Index / NT RUSSELL 2000 IDX / Expense: 0.009%

ROTH IRA (will be maxed every year going forward) - Balance:  21,000

- 100% Vangaurd Target 2055 / Exp: 0.16%

Title: Re: Anyone mind taking a look at my investment allocations
Post by: tonysemail on June 29, 2016, 12:35:09 PM

I followed the advice here-
https://www.bogleheads.org/wiki/Tax-efficient_fund_placement

since your roth ira is tax free, it would be optimal to weight it 100% equities.
you can maintain your target asset allocation by holding more bonds in your 401k.

are you going to have an after-tax account too?
If so, then international stocks should be held in after-tax accounts.

Title: Re: Anyone mind taking a look at my investment allocations
Post by: MrD on June 29, 2016, 01:29:25 PM

Quote from: tonysemail on June 29, 2016, 12:35:09 PM

I followed the advice here-
https://www.bogleheads.org/wiki/Tax-efficient_fund_placement

since your roth ira is tax free, it would be optimal to weight it 100% equities.
you can maintain your target asset allocation by holding more bonds in your 401k.

are you going to have an after-tax account too?
If so, then international stocks should be held in after-tax accounts.

I hadn't though about this before. I will now target this allocation balance of:

- 65% SP500 Index
- 10% Bond Index
- 20% International Index
- 5% Small Cap Index by doing the following.

My 401K: 15% SP500 / 25% Bond / 48% Int / 12% Smallcap
Wife 401k and both IRAs: 100% SP500

This will give us a total allocation of what is above. It will also maximize the fact that the SP500 index in my wife's 401k his the lowest expense ratio. The 100% absolute goal is to mirror a total stock index fund of 90% and a total bond index fund of 10%. Since I don't have those options in either 401k this is my best balance I have come up with.