Alright lets crunch some numbers shall we? For 2016
I'm going to assume each of you makes less than $118.5k (the SS tax of 6.2% is assessed on the first $118.5k in income per person)
$140k household income
-$18k 403b (earner 1)
-$18k 403b (earner 2)
-$18k 457b (but if this is not a
governmental 457b, then please say so, because there are some downsides if it isn't one)
$-11k 2x tIRAs
= $75k AGI
-12600 standard deduction (idk if you itemize, I assumed not)
-8100 exemptions (4050x2)
= $54300 federal taxable income
Fed tax: $7217.50
State tax: $3616 (idk what state you live in, but I'm going to just use GA numbers because I know these brackets)
FICA: $10710
Take home pay (Gross - fed - state - FICA tax - 403b/457b/IRA contributions) = $53456.50
I don't see the need for you to sell any shares in VTSAX.
I've read some about tax loss harvesting, which is what I think you're alluding to, and I'll confess it seems a bit confusing to me to lock in losses when the stock is down. I'm open to the idea, though. Just figuring it out.
No you don't lock in losses. The idea is you sell and then either
1) Buy a similar security, thereby maintaining your overall investment position while grabbing a tax deduction
2) Sit out of the market in 30 days. So long as the market hasn't moved upwards in excess of the value of your tax deduction, you come out ahead*. Of course, we don't know what the market will do.
I advocate option 1, but there are people who use option 2 and still do well.
*This makes some implicit assumptions about tax brackets now and in retirement, but I don't want to get you too bogged down in the details just yet.