Author Topic: Financial guidance-asset allocation(dividends or not?) for a 35 y/o married dude  (Read 2861 times)


  • 5 O'Clock Shadow
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  • Posts: 1

Hi guys,
I'm in need of some financial guidance. Specifically I'm trying to develop a strategy to implement dividend paying taxable funds into our retirement allocation. After reading posts here, and other sites, it just makes sense to me to have supplemental income from dividend paying accounts before retirement age. I am 35 y/o and my wife is 30. However, given my situation, maybe I'm being unrealistic. I don't have any magical number as to when I want to retire, but am motivated to make the necessary sacrifices.

Our gross income is $89k, and after deductions/ exemptions we are in the 15% bracket. We can afford to put around $1,500 monthly towards retirement, after my 12% pretax contribution to my 401k. We currently have 2 incomes and I would like to be aggressive as possible in the next year and a half, because after that we plan on having children and will go to one income. Hopefully by then I will be making more $$$.

Our current assets:
$20k in savings
$4k in my 401(k) (Fidelity 80/20 stock to bond ratio, index funds)
$14k in my wife's IRA (Vanguard target fund 2050) - I plan on letting this money sit there and am not contributing towards it. Thoughts?

$43k in student debt at 4.25%. I was going to start paying this down in the next few years after we increase our retirement base. Any thoughts?

Future considerations:
We plan on buying a house in a year or two. I qualify for a VA loan which is 0% down. We also plan on having a child in approximately 1.5 years. My wife will prob. not work, so we will have to make due with my income ( currently $53k).

The current 401(k) plan is to contribute approximately 12% of my salary annually ($6,360), which should give me around 600k at age 65, assuming 5% growth, and the same employer match. I used a bankrate calculator to get this number. This strategy is partly based off of MMM "How much is too much in your 401(k) - strategy #1, old man money." Does this look good to you guys?

The next part of my plan is where any guidance or feedback would be much appreciated. I'm wondering if I should:
1. focus on taxable capital gain dividend paying funds with the remaining money after my 401k contribution.
2. OR allocate remaining money towards Roth contributions.
3. OR do both Roth and taxable accounts.

I get caught up on figuring out how to balance all of these contributions.

I'd like to keep this plan simplified. It seems that many of you use total stock market index funds, or S&P 500 type funds for your taxable accounts. I'm not looking for fancy complicated plans, because I would obsess about them :).

Thanks for the help!


  • Pencil Stache
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  • Posts: 524
I'd typically recommend:
You can open Roth IRAs for both you and your wife, and contribute $11k (combined) there.  That would take care of most of your un-allocated $18k of yearly investment funds.  I can't think of a reason why you'd prefer to use plan-vanilla taxable accounts rather than Roth IRA accounts.  Especially since you're planning to work through to 60-ish years of age (rather than an earlier retirement).  If you have an emergency, the funds your contributed to the Roths (but not the growth) can be withdrawn penalty-free.

But ...
With the big changes coming up in your life (house, baby, single income), whatever you decide to do must be evaluated according to your situation a year or two from now.  Do you have any sense of what your mortgage payment will be (compared to your current rent, and remembering to include insurance, taxes, HoA dues, home repairs, etc.)?  Or whether you'll be able to continue your current rate of long-term savings when you lose your wife's salary?

You might want to consider living on your $53k salary now, and putting all of your wife's into savings.  Better to make the adjustment in a controlled manner over some time, than to have to do it quickly when baby arrives.


  • Handlebar Stache
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  • Location: San Francisco
I have mine in the vanguard total stock market and total bond market fund, 85/15 split.  I have the bonds to lower volatility, I can't stomach a 100% stock market fund.  Kind of similar situation 35 y/o, married, two kids.

It's good that your thinking about retirement and what to invest in, but your energy might be better spent at focusing on your savings rate vs investment allocation or returns.

Here is MMM post and a good link to demonstrate that your savings rate will have a much bigger impact on your retirement than investment returns:

Also agree with what shuffler said about living on one salary now to get used to it and learn how to actually live on that salary and save when you have kids and she stays home.

As for the VA loan, it's great that you can get 0% down, but that tends to make people buy too much house than they can really afford.  So just be aware of that.

As for the liability, most can make the case that interest is low enough that it's a toss-up between paying it down and saving for retirement.  I personally am debt averse and would pay it off quickly to get it out of the way, especially when you start a family or get a mortgage.