Please review my holdings

[Joel]

I recently changed jobs to a new employer, and I'm reevaluating where my funds are held and where my new purchases are being directed. Married 27/28yo. $150k/yr income between the 2 of us. maxing $18k into each 401k, 5.5k into each Roth IRA, 6,650 in family HSA, plus some taxable investments. We do not own a home, but are currently saving and expect to buy in the next 3-4 years. Cannot contribute to IRAs. 6mo emergency fund in cash.

Bonds/TIPS are half our age, split evenly. Real estate is 10% of holdings, increasing 1% every 5 years, up to 15% at age 50. Remaining are in stocks, 60% U.S. / 40% international. I consider cash in my total allocation as well, which is equivalent to 6 month emergency fund, which causes my actual percentages excluding cash to be slightly higher than mentioned above.

That results in:
Bonds = 8%
TIPS = 8%
Real Estate = 11%
U.S. Stocks = 44%
International Stocks = 29%


** I hold 81% S&P500, 4% Mid Cap, and 15% Small Cap when total stock market is unavailable in many accounts. I hold 80% developed markets and 20% emerging markets in my roth IRA so that I do not create wash sales for the total international stock market index held in my taxable account.

Breakdown by account:

His new 401k at Transamerica (1% of total holdings - approx 1.7k):
57% Vanguard Institutional Index - S&P500 (VINIX 0.04%)
26% Vanguard Developed Markets Index Institutional (VTMNX 0.07%)
17% Vanguard REIT Index (VGSNX 0.10%)
0% Vanguard Mid Cap Index (VIMAX 0.09%)
0% Vanguard Small Cap Index (VSCIX 0.08%)
-- New Contributions are 33% REIT, 52% Developed Markets, and 15% S&P500. (approx. 1,7k per month)
-- Contributing 18k per year, plus a 3% company match
-- Does not offer total stock market index, total international stock market index, bonds, or TIPS.

His old 401k at Merrill Lynch (19% of total holdings - approx 40.5k):
59% Vanguard EE Benefit Index Fund - Total Stock Market (VKPMG 0.02%)
41% Vanguard REIT Index Fund (VGSNX 0.10%)
0% Blackrock MSCI ACWI Ex U.S. Index - Total International Stocks (BMSIT 0.08%)
0% State Street 1-10yr U.S. Treasury Inflation Protected Securities (TIPS) Index (ZTIPST 0.05%)
0% Vanguard Total Bond Market Index (VBPMX 0.05%)
-- No new contributions
-- When reallocating, can not choose to reallocate just traditional funds, which is why I have not reallocated to TIPS or Bonds in this account.

His old Roth 401k at Merrill Lynch (5% of total holdings - approx 11.4k):
42% Vanguard EE Benefit Index Fund - Total Stock Market (VKPMG 0.02%)
58% Vanguard REIT Index Fund (VGSNX 0.10%)
0% Blackrock MSCI ACWI Ex U.S. Index - Total International Stocks (BMSIT 0.08%)
0% State Street 1-10yr U.S. Treasury Inflation Protected Securities (TIPS) Index (ZTIPST 0.05%)
0% Vanguard Total Bond Market Index (VBPMX 0.05%)
-- No new contributions

Her 401k at Prudential (13% of total holdings - approx. 27.6k):
49% BlackRock Equity Index - S&P500 (C!XE9 0.03%)
4% BlackRock Mid Capitalization Equity Index (C!XF7 0.05%)
14% BlackRock Russell 2000 Index - Small Cap (C!XF6 0.06%)
33% BlackRock U.S. Debt Index - Bonds (C!XF8 0.05%)
-- New Contributions are 48% Bonds, 34% S&P500, 4% Mid Cap, and 15% Small Cap. (approx. 1.6k per month)
-- Contributing 18k per year, plus a 5% company match
-- Does not offer total stock market index, international stocks, real estate, or TIPS.

Her Roth 401k at Prudential (3% of total holdings - approx. 6k):
84% BlackRock Equity Index - S&P500 (C!XE9 0.03%)
16% BlackRock Russell 2000 Index - Small Cap (C!XF6 0.06%)
0% BlackRock Mid Capitalization Equity Index (C!XF7 0.05%)
0% BlackRock U.S. Debt Index - Bonds (C!XF8 0.05%)
-- No new contributions

Her HSA at Wells Fargo (2% of total holdings - approx. 4.3k):
100% Wells Fargo Index Adm - S&P 500 (WFIOX 0.25%)
-- Contributing 6,650 per year, including 1,200 by the company at the start of the year.
-- Does not offer U.S. Treasury bonds, TIPS, total stock market index, international stocks, real estate, or TIPS.

His Roth IRA at Vanguard (22% of total holdings - approx. 47.2k):
43% Vanguard Developed Markets Index (VTMGX 0.09%)
11% Vanguard Emerging Markets Index (VEIEX 0.33%)
47% Vanguard Total Stock Market Index (VTSAX 0.05%)
-- Contributing 5,500 per year, 45% developed and 55% emerging
-- Emerging Market shares will be upgraded to VEMAX 0.15% admiral shares once I reach 10k (currently around 5k)
-- I do not own the International Stock Market index here since I have it in my taxable account and want to avoid wash sales.

Her Roth IRA at Vanguard (5% of total holdings - approx. 11.1k):
100% Vanguard Total Stock Market Index (VTSAX 0.05%)
-- Contributing 5,500 per year - 100% total stock market

His IRA at Vanguard (7% of total holdings - approx. 13.8k):
49% Vanguard Inflation-Protected Securities Fund -TIPS (VIPSX 0.20%)
51% Vanguard Total Bond Market Index (VBMFX 0.20%)
-- No new contributions
-- Exchanging $389 in Bonds for TIPS each month.

Our Taxable at Vanguard (17% of total holdings - approx. 36.1k):
100% Vanguard Total International Stock Market Index (VTIAX 0.14%)
-- Not consistently making new contributions.

My Pension / Private Investment (5% of total holdings - approx. 10.1k):
Pension from Big 4 accounting firm that returns 5% guaranteed or the 30-year treasury rate if greater - cash value readily available and will be upon retirement. I consider this part of my TIPS allocation.

Totals:
44% U.S. Stocks
29% in International Stocks
11% in Real Estate
8% in TIPS
8% in Bonds

The monthly contributions use my target asset allocation.

I've considered moving some of my international stock allocation in my former 401k, but my only option for new purchases in our 401ks or HSAs is the developed international stock market index in my 401k, and I'm offsetting that with the emerging markets index in my roth IRA. I don't have enough excess to consistently make enough purchases in my taxable account.

I'm considering moving my former 401k into my new 401k and my former roth 401k into my roth IRA.

I'm also considering the need for TIPS instead of Bonds in my allocation, as well as the need for mid cap and small cap to approximate the total stock market.

Let me know your thoughts.

[MustacheAndaHalf]

It's too much to take all of that in.  Could you condense it into categories, by percentage?  For example, % US stock market, % REIT, etc.  Even condensing the 80/14/15 into "Total US Market" is probably okay (actual percent is about 72/19/9 for lg/mid/sm).

You're not alone in contributing so much to Emerging Markets.  If you look at the portfolio pages for VWO and VEA (ETF classes of emerging & developed markets), they show not just ETF assets but all "share classes" of assets: $46 billion emerging markets, and $51 billion developed markets.  While that seems overly risky to me, that's a lot of money doing something similar to what you plan to do.

I see your bond allocation in an old 401k and in an IRA, and agree that's a good place for it.

[capitalninja]

You didn't mention whether you had any significant debt such as student loans or auto debt. If not, great. If so, you'll want to put some of your income towards eliminating that.

Overall I'd say just keep doing what you're doing. You're 28 and you have a clue about your finances which is more that can be said for most 28 year olds.

Were it me, I wouldn't have any money in bonds or TIPs, but that's me. Keep up the good work.

[moustache79]

I suggest consolidating all old accounts into active roth/ ira.   Given your strategy im finding vanguard is cheapest/ simplest / best.  Otherwise your stategy and organization is impressive

[Joel]

You didn't mention whether you had any significant debt such as student loans or auto debt. If not, great. If so, you'll want to put some of your income towards eliminating that.

Overall I'd say just keep doing what you're doing. You're 28 and you have a clue about your finances which is more that can be said for most 28 year olds.

Were it me, I wouldn't have any money in bonds or TIPs, but that's me. Keep up the good work.

No debt. And thanks!

[Heckler]

It's too much to take all of that in.

Agreed.  Have you considered consolidating accounts and treating your portfolio as one asset allocation?   That must be a nightmare to rebalance. 

https://www.bogleheads.org/wiki/Asset_allocation_in_multiple_accounts

http://canadiancouchpotato.com/2014/08/13/managing-multiple-family-accounts/

[Louisville]

TIPS at age 28? I'd only do that if I were planning on drawdown within 5 years. That 8% could be making you some money, rather than just keeping up with inflation. But I'm sure someone else will come along with a reason to hold TIPS.

Other than that, it's a perfectly reasonable overall allocation. Stick to it and keep shoveling money at it. As others have said, try to consolidate accounts, while keeping the overall asset allocation the same.

[Rufus.T.Firefly]

Pretty good overall in my opinion. I'll echo other comments about TIPS. I don't think there's any reason to be in them during the accumulation phase.

This allocation seems a little heavy in international for my taste. I personally would prefer something closer to the 15-20% range and a higher US percentage.