Author Topic: Stocks/Bonds or Both in new 401k  (Read 903 times)

soccerluvof4

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Stocks/Bonds or Both in new 401k
« on: December 13, 2017, 04:24:43 AM »
So i have been asking alot of questions to try and get this right before year end about an AA for my wifes new 401k plan. She went back to work for HC after we Fired and now gets a company match 401k.

Currently we are pretty conservative and have accumulated way to much cash about 4-5 years + so our plan is as such-

Reduce our withdrawl amount for the next 2 years or till we have 2 years cash

So Live completely off the Withdrawal amount and cash unless drop in market then will dump more in.

Her Gross pay is about 40k so max out deductions and take advantage of tax deffered accounts so
1) max out HSA of 6900 for 2018
1) 1k a month in 401k so 12k for 2018 (we will re-adjust to more if the numbers workout)(just edited this that since she turns 50 this year we could really hammer every dime into her 401k once we see how the math works out).

That reduces her gross income alone by 18k then we have Property taxes of 3400$ a year, kids deduction and  we have 4 kids* So this leads to question #1 and there was some 529 money spent this year

Startin January we will have 2 in college one will be 18 in August of 2018 and one will be 19 in February but can or do we still count them as dependents. My though was the more in her check the more we can tax defer and see if we can get the 401k even higher. The other two are 12 and 13 so claim 4 dependents or 6 or?


question two is we are pretty conservative in our funds (All vanguard) and there plan offers all the Vanguard funds .  Because of delayed stupidty our 401ks are currently only about 8% of our total portfolio of which is currently a 57/33/10cash AA but we have 30xs expenses, hence why we fired. She loves her job and the HC takes alot of stress out so dont want to get into that just want to make the best decision with the money.

Like to be a bit more aggressive with this since she gets a match and raise it to a 70/30 split she is 49 and I am 53. So what two-four Vanguard funds should I dump it in. Hoping it works out so We can take advantage of catchup with her next year.

Any other questions or suggestions I'd appreciate.



« Last Edit: December 13, 2017, 04:41:00 AM by soccerluvof4 »

NoStacheOhio

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Re: Stocks/Bonds or Both in new 401k
« Reply #1 on: December 13, 2017, 06:15:31 AM »
If you feel you have too much cash, I would start by maxing out contributions to all tax-advantaged accounts and using the cash for your regular spending. Adjust contributions as needed when your balance reaches your desired AA.

If you're 57/33 stocks/bonds at ~50 in your other accounts, you can probably afford to be more aggressive with new money in the 401k (100% total US market index, 80/20 US/Int'l total index, something like that). Figure out what overall AA you want, and just make it happen considering all accounts. Don't worry about allocation in an individual account, only how it affects your overall AA.

If you haven't already, read this: http://jlcollinsnh.com/stock-series/

soccerluvof4

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Re: Stocks/Bonds or Both in new 401k
« Reply #2 on: December 13, 2017, 10:57:15 AM »
If you feel you have too much cash, I would start by maxing out contributions to all tax-advantaged accounts and using the cash for your regular spending. Adjust contributions as needed when your balance reaches your desired AA.

If you're 57/33 stocks/bonds at ~50 in your other accounts, you can probably afford to be more aggressive with new money in the 401k (100% total US market index, 80/20 US/Int'l total index, something like that). Figure out what overall AA you want, and just make it happen considering all accounts. Don't worry about allocation in an individual account, only how it affects your overall AA.

If you haven't already, read this: http://jlcollinsnh.com/stock-series/



I agree with everything your saying and pretty much said all that in my opening piece. What I was asking was what 2 + funds would be the best in a 401k meaning more for tax implications and or overall portfolio health /wealth knowing that my 401ks are behind my taxable accounts.  So does do 70-80 VTSAX still make sense in a 401k kinda thing. So basically 2-4 stocks be it 70-30 0r 80-20.

frugaliknowit

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Re: Stocks/Bonds or Both in new 401k
« Reply #3 on: December 13, 2017, 01:20:16 PM »
Soccerluv,

I am not grasping all of your situation.  You might want to list your monies and what they are in.

1.  Why don't you look at this as "1 portfolio" (tax deferred and not) where you have equities, cash, and bonds (if any).
2.  Pick an asset allocation (70/30, 60/40, whatever).
3.  Adjust wife's portfolio (or another portfolio) to create the portfolio asset allocation you want. 
     

soccerluvof4

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Re: Stocks/Bonds or Both in new 401k
« Reply #4 on: December 13, 2017, 02:50:24 PM »
Soccerluv,

I am not grasping all of your situation.  You might want to list your monies and what they are in.

1.  Why don't you look at this as "1 portfolio" (tax deferred and not) where you have equities, cash, and bonds (if any).
2.  Pick an asset allocation (70/30, 60/40, whatever).
3.  Adjust wife's portfolio (or another portfolio) to create the portfolio asset allocation you want. 
     


Thats essentially what I want to do with this new 401k. Raise my Stock /Bond ratio and reduce some of my cash.

The root of the question was basically being a 401k what type AA should I put in there since my 401ks are such a small part of my portfolio.  After looking further at the Vanguard funds there are no Bond funds so I was think 82% S&P and 18% small caps for 100% stock portfolio.  Even at 12-15k a year its going to take a while to raise the needle on the stock side or I can increase Bonds in my other portfolios. End goal I'd like to as you said have my 1 portfolio be closer to 65/35. Thanks