I’ve gained most of my financial literacy from the Bogleheads, especially this forum, and want to start with my gratitude for getting me to this point.
To give you some background you’ve helped me establish and invest in a Roth IRA, pay off 200K+ of student loans in less than 5 years of starting a real job, save for a downpayment and buy a house. My husband and I have always maximized all retirement accounts available, even though this started relatively late for us as we were students for so long (PhD and MD). After completing these goals, I’m overflowing into the taxable account without any set “need.” While I am attempting to improve my ability to spend money instead of “save” and enjoy vacations, I still end up feeling like I should have a better plan for cash that’s not going into the retirement accounts.
I think it may be time for me to ask for a review and some questions I am pondering. Please help point out what I am missing or should think about next.
Emergency funds: I have 6 months of emergency funds
Debt: House Mortgage 460K at an Interest Rate 3.625%
Tax Filing Status: Married Filing Jointly
Tax Rate: 24% Federal, 2.5% State
State of Residence: Arizona
Age: Me 39 Husband 38
Desired Asset Allocation: 95% stocks / 5% bonds
Desired International allocation: 30% of stocks
Current assets Total Portfolio: 1.7M
Taxable
5.4% Cash in Money Market SPAXX at Fidelity
26.8% Vanguard Total Stock Market Index Fund (VTSAX) (0.04%) at Vanguard
His 403b at Fidelity Brokeragelink
10.5% Fidelity Total Market Index Fund (FSKAX) (0.02%)
Her 401k at Fidelity Brokeragelink
15.4% Fidelity Total Market Index Fund (FSKAX) (0.02%)
His 401a at Fidelity Brokeragelink
8.0% Fidelity Total Market Index Fund (FSKAX) (0.02%)
His 457 govt at Nationwide
4.2% Fidelity 500 Index Fund (FXIAX) (0.02%)
4.7% Fidelity International Index Premium (FSIVX) (0.04%)
His Roth IRA at Vanguard
7.5% Vanguard Total International Stock Index Fund (VTIAX) (0.11%)
Her Roth IRA at Vanguard
9.5% Vanguard Total International Stock Index Fund (VTIAX) (0.11%)
Joint HSA at Fidelity
3.1% Fidelity Total International Index Fund (FTIHX) (0.06%)
I bonds
4.7% Govt I bonds
_______________________________________________________________
New annual Contributions
$23K his 403b (no match)
$23K her 401k (4% match)
$10.5K his 401a (100% match)
$23K his 457 govt
$8.3K Joint HSA
$7K his Roth IRA (backdoor)
$7K her Roth IRA (backdoor)
$60K taxable (for retirement and long-term savings)
Concerns: Beyond spending more money and increasing our charitable giving, the extra is currently going into the taxable. Taxable investments are in Vanguard with VTSAX, but there is additional cash right now that should be invested as there are no plans to spend it. My initial thought was to add more to the VTSAX, but the money is sitting at Fidelity, and so I am pondering just investing there.
Our incomes get us near the top of the 24% tax bracket with few deductions other than the mortgage. I want to set us up for the future, and as part of that I would like to try and find other opportunities to limit tax liability, and consider trying to set us up for potential tax loss harvesting.
I’ve heard some say that ETFs are overall better for taxable accounts, and mutual funds for retirement accounts. My understanding is that ETFs may make tax loss harvesting easier in the future.
Questions:
1. Is there a benefit to moving our investments in taxable accounts to ETFs?
2. Would moving to ETFs help with future tax loss harvesting?
3. Many of our retirement accounts are at Fidelity, thus FSKAX. My understanding is that I should chose an ETF that is from a different index to hold in the taxable account in order to have potential for tax loss harvesting. Would something like ITOT work?
4. Is there a benefit of converting the taxable VTSAX to VTI?
5. Are there downsides of converting/moving to ETFs in our taxable accounts?
6. Is tax loss harvesting even worthwhile?
7. What else should we be considering to best set us up for the future?
To give a better sense of us, my husband is the PhD and will probably try to work forever, if he is able, as he loves his work. I may to cut back to part time 10+ years from now. We have no kids, no need to leave anything when we go. With limited personal obligations, there could be opportunities in our work or other part of our lives that come up later and I could see us making big shifts, even potentially moving outside of the US, and my goal is always to leave our options open for whatever we decide to do.
Reading multiple differing opinions on this forum has been extremely helpful for me, so please don't hold back.
To give you some background you’ve helped me establish and invest in a Roth IRA, pay off 200K+ of student loans in less than 5 years of starting a real job, save for a downpayment and buy a house. My husband and I have always maximized all retirement accounts available, even though this started relatively late for us as we were students for so long (PhD and MD). After completing these goals, I’m overflowing into the taxable account without any set “need.” While I am attempting to improve my ability to spend money instead of “save” and enjoy vacations, I still end up feeling like I should have a better plan for cash that’s not going into the retirement accounts.
I think it may be time for me to ask for a review and some questions I am pondering. Please help point out what I am missing or should think about next.
Emergency funds: I have 6 months of emergency funds
Debt: House Mortgage 460K at an Interest Rate 3.625%
Tax Filing Status: Married Filing Jointly
Tax Rate: 24% Federal, 2.5% State
State of Residence: Arizona
Age: Me 39 Husband 38
Desired Asset Allocation: 95% stocks / 5% bonds
Desired International allocation: 30% of stocks
Current assets Total Portfolio: 1.7M
Taxable
5.4% Cash in Money Market SPAXX at Fidelity
26.8% Vanguard Total Stock Market Index Fund (VTSAX) (0.04%) at Vanguard
His 403b at Fidelity Brokeragelink
10.5% Fidelity Total Market Index Fund (FSKAX) (0.02%)
Her 401k at Fidelity Brokeragelink
15.4% Fidelity Total Market Index Fund (FSKAX) (0.02%)
His 401a at Fidelity Brokeragelink
8.0% Fidelity Total Market Index Fund (FSKAX) (0.02%)
His 457 govt at Nationwide
4.2% Fidelity 500 Index Fund (FXIAX) (0.02%)
4.7% Fidelity International Index Premium (FSIVX) (0.04%)
His Roth IRA at Vanguard
7.5% Vanguard Total International Stock Index Fund (VTIAX) (0.11%)
Her Roth IRA at Vanguard
9.5% Vanguard Total International Stock Index Fund (VTIAX) (0.11%)
Joint HSA at Fidelity
3.1% Fidelity Total International Index Fund (FTIHX) (0.06%)
I bonds
4.7% Govt I bonds
_______________________________________________________________
New annual Contributions
$23K his 403b (no match)
$23K her 401k (4% match)
$10.5K his 401a (100% match)
$23K his 457 govt
$8.3K Joint HSA
$7K his Roth IRA (backdoor)
$7K her Roth IRA (backdoor)
$60K taxable (for retirement and long-term savings)
Concerns: Beyond spending more money and increasing our charitable giving, the extra is currently going into the taxable. Taxable investments are in Vanguard with VTSAX, but there is additional cash right now that should be invested as there are no plans to spend it. My initial thought was to add more to the VTSAX, but the money is sitting at Fidelity, and so I am pondering just investing there.
Our incomes get us near the top of the 24% tax bracket with few deductions other than the mortgage. I want to set us up for the future, and as part of that I would like to try and find other opportunities to limit tax liability, and consider trying to set us up for potential tax loss harvesting.
I’ve heard some say that ETFs are overall better for taxable accounts, and mutual funds for retirement accounts. My understanding is that ETFs may make tax loss harvesting easier in the future.
Questions:
1. Is there a benefit to moving our investments in taxable accounts to ETFs?
2. Would moving to ETFs help with future tax loss harvesting?
3. Many of our retirement accounts are at Fidelity, thus FSKAX. My understanding is that I should chose an ETF that is from a different index to hold in the taxable account in order to have potential for tax loss harvesting. Would something like ITOT work?
4. Is there a benefit of converting the taxable VTSAX to VTI?
5. Are there downsides of converting/moving to ETFs in our taxable accounts?
6. Is tax loss harvesting even worthwhile?
7. What else should we be considering to best set us up for the future?
To give a better sense of us, my husband is the PhD and will probably try to work forever, if he is able, as he loves his work. I may to cut back to part time 10+ years from now. We have no kids, no need to leave anything when we go. With limited personal obligations, there could be opportunities in our work or other part of our lives that come up later and I could see us making big shifts, even potentially moving outside of the US, and my goal is always to leave our options open for whatever we decide to do.
Reading multiple differing opinions on this forum has been extremely helpful for me, so please don't hold back.
Statistics: Posted by Kleina — Wed Jun 12, 2024 9:47 pm — Replies 0 — Views 54