Author Topic: am i tax efficient enough / pensions calcs  (Read 538 times)


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am i tax efficient enough / pensions calcs
« on: August 03, 2021, 05:28:35 AM »
Emergency funds: 66k cash

Debt: Mortgage 179k 20 yr 2.625
Tax Filing Status: MFJ

Tax Rate: 22% Federal, 5.75% State

Age: 36 and 39

Desired Asset allocation:  85% stocks / 15% bonds
Desired International allocation: ?% of stocks

Not sure what my desired allocation really is but Iím OK with 85/15. No idea on international.

457s together: 488k
IRAs together: 172k
Taxable: 5k
Pension cash out values for both 1 & 2: 82k
Cash: 66k (was going to be for closing on house)

Invested assets: 747k
With cash: 813k
With cash and house equity: 993k
Asset allocation of 457s and IRAS: 84% stock / 16%

Partner 1:
457: 195,000 (In Morning Star, Old ICMA, 83% stock (SP 500) fund 17% bond fund)

Expense ratios super low, .01% and .03% respectively. $35 yearly fee.

IRAS (IRA balance 82.5% stocks 17.5% bonds)

VFORX Vanguard Target Date 2040 Fund - 51k
VTTSX Vanguard Target Date 2060 Fund - 5k

VFORX Vanguard Target Date 2040 Fund - 32k

Partner 2:
457: 277,000 - 84% stock 16% bond (same as above for funds)
Expense ratios super low, .01% and .03% respectively. $35 yearly fee.

IRAS (vanguard says 88.5% stock 11.5% bonds)
Roth: VTSAX - 16k

VBTLX Vanguard Total Bond Market Index Fund - 4k
VFIFX Vanguard Target Date 2050 Fund - 55k
VTTSX - 6k

Vanguard target date 2050 - 2k
VTSAX - 3k


New annual Contributions
457: 39k (maxed for 2)
Trad. IRA: 9k (IRA maxed for 2)
Roth IRA 3k (income probably just over  limit for trad this year)
Pretax pension 1: 4426
Pretax pension 2: 3727
Brokerage: starting this year 14k (expenses lowered and raise)
Employer contribution: 1k

74k saved a year.


1. Any way to improve these investments? (I could just go to VTSAX and total bond in the IRAs I guess which have lower fees?)
2. How to improve tax efficiency (I was planning to charge partner 1s Roth to all VSTAX and put more bonds in the 457 but wasnít sure and wanted to make this post first)
3. What should future contributions to my taxable be? I assume all VTSAX since bonds are tax inefficient and just rebalance more bonds to the 457s once a year?
4. Is the asset allocation appropriate?
5. I will move to a new house in a few years and have $180k equity. One suggestion I got was to invest my cash now and get a HELOC for the next downpayment, which would be paid off when I sell current home. I could dump 60k of my cash in my taxable if this would work.
6. If either partner leaves their job how can I calculate whether to keep my pension or cash out the value (Details at end of post)

Pension details: If I leave before 2041 I need to wait until 2050 to collect the pension. If I leave employment at the qualifying time at age 60 in 2041 I get 53% of salary at the time. If I leave now I could get 20% of salary starting in 2050 (no inflation adjustment until 2050) or get $48,000 to roll into an IRA. This would increase roughly 1.7% each year for next 20 years.

More details in case study here, where I really didn't get into investments too much.'t-track-spending/


Wow, a phone plan for fifteen bucks!