Thank you very much for all the advice, @bonesly. The proposed allocation/layout above makes sense to me.
I have a few follow-up questions:
1. Tax Loss Harvesting (TLH) Strategy
If I hold VTI and VOO in a taxable brokerage account, and the market goes down, some tax lots could be eligible for tax loss harvesting (TLH). For example, if I sell some tax lots of VTI and buy VV or sell some tax lots of VOO and buy VUG, I would end up with four positions: VTI, VOO, VV, and VUG.
- Would this complicate my portfolio management moving forward?
- Is it generally better to sell the entire position to keep things simple when doing TLH?
- Given recent market volatility, for example, VOO had certain recent tax lots with a loss of $3k. With my net worth, is it worth doing a tax lot swap or a full position swap with VUG?
2. 401(k) Allocation and Roth Conversions
Our 401(k) accounts are allocated as follows:
- He/Spouse: $350k (pre-tax + Roth of $45k) that has PRIMECAP investment option. The plan allows "in-plan Roth conversions." Should we wait until early retirement to do Roth conversions, or start now? 100% is invested in VIIIX (S&P500 index).
- She: $110k (pre-tax). The plan recently allowed Roth contributions, which we will start next month. This account does not include PRIMECAP (mainly John Hancock funds with high ER). I’m checking plan details (takes time to obtain those from HR), but it seems that in-plan Roth conversions are not allowed. The plan has a 0.42% admin fee on AUM per year (!!!). 100% is invested in JHVIT (S&P500 index) with 0.05% ER.
With a MFJ gross income of ~$230k and AGI of ~$190k for MFJ, does it make sense to shift to Roth for both of us?
3. Taxable vs. Roth Allocation
Our current allocation has about 63% in a taxable account. Given our situation, does it make sense to shift more to Roth accounts?
4. Actively Managed Funds
You mentioned PRIMECAP, which I wasn't aware of—thank you for that. Are there any other well-managed actively managed funds I should consider? I've mostly focused on passive index funds so far.
I have a few follow-up questions:
1. Tax Loss Harvesting (TLH) Strategy
If I hold VTI and VOO in a taxable brokerage account, and the market goes down, some tax lots could be eligible for tax loss harvesting (TLH). For example, if I sell some tax lots of VTI and buy VV or sell some tax lots of VOO and buy VUG, I would end up with four positions: VTI, VOO, VV, and VUG.
- Would this complicate my portfolio management moving forward?
- Is it generally better to sell the entire position to keep things simple when doing TLH?
- Given recent market volatility, for example, VOO had certain recent tax lots with a loss of $3k. With my net worth, is it worth doing a tax lot swap or a full position swap with VUG?
2. 401(k) Allocation and Roth Conversions
Our 401(k) accounts are allocated as follows:
- He/Spouse: $350k (pre-tax + Roth of $45k) that has PRIMECAP investment option. The plan allows "in-plan Roth conversions." Should we wait until early retirement to do Roth conversions, or start now? 100% is invested in VIIIX (S&P500 index).
- She: $110k (pre-tax). The plan recently allowed Roth contributions, which we will start next month. This account does not include PRIMECAP (mainly John Hancock funds with high ER). I’m checking plan details (takes time to obtain those from HR), but it seems that in-plan Roth conversions are not allowed. The plan has a 0.42% admin fee on AUM per year (!!!). 100% is invested in JHVIT (S&P500 index) with 0.05% ER.
With a MFJ gross income of ~$230k and AGI of ~$190k for MFJ, does it make sense to shift to Roth for both of us?
3. Taxable vs. Roth Allocation
Our current allocation has about 63% in a taxable account. Given our situation, does it make sense to shift more to Roth accounts?
4. Actively Managed Funds
You mentioned PRIMECAP, which I wasn't aware of—thank you for that. Are there any other well-managed actively managed funds I should consider? I've mostly focused on passive index funds so far.
Statistics: Posted by pualius38 — Wed Sep 11, 2024 6:05 pm — Replies 7 — Views 2352
