Critique investment plan for first time investors

[Hatton]

OK.  I would not put more than 20% in bonds at your age.  The solok is an ok place.  If you expect a big taxable account then you could put muni bonds in there.  Any tax protected space is really good for non-muni bonds, reits, and anything that has a dividend. I would just get started.  No one knows what the market will do. Yes we recently hit a new high but remember the 600 point drop with Brexit? People have been hyperventilating about bonds for years.  It is all noise.  You have a plan just do it. No allocation is perfect, no plan is perfect.  Just shoot for good enough.

[Rifampin]

hatton1 wrote:

Congrats you seem to be doing well.  Is the question whether to sell of the stock fund in the solok. Are you planning to do just bonds? I think your asset allocation is good for your age.  You have a good amount of international stock as well.  Vanguard recommends 30%.  Try to think of your portfolio as one.  The allocation 80/20 is across all accounts. You do have a out 7 months of emergency funds.  Most people recommend 3-6 months.  If your husband is going back to school the extra could help pay for that expense.

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Hi thanks for your reply. This is just a plan. Currently all of the money is just sitting in a money market. As far as the Solo 401k, I was wondering whether I should just hold all $135K in bonds since I can take advantage of placing tax-inefficient funds in the Solo 401k. I anticipate that our taxable account will far outweigh my Solo 401k since I will now only be able to contribute $18k + backdoor Roth IRA money each year. Meanwhile, we anticipate investing close to $60-70k a year in the taxable after maxing out each others 401k.

[Hatton]

Congrats you seem to be doing well.  Is the question whether to sell of the stock fund in the solok. Are you planning to do just bonds? I think your asset allocation is good for your age.  You have a good amount of international stock as well.  Vanguard recommends 30%.  Try to think of your portfolio as one.  The allocation 80/20 is across all accounts. You do have a out 7 months of emergency funds.  Most people recommend 3-6 months.  If your husband is going back to school the extra could help pay for that expense.

[Rifampin]

Hello WCI we would appreciate your opinions of our plan as first time investors. Background info:

Emergency funds: $35k
Debt: Only liabilities are the mortgage $277k balance 15 yr fixed @3% (Home valued at $400k)
Tax Filing Status: Married filing jointly
Tax Rate: 28% Federal, 0% State
Gross income: $230K
Monthly expenses: $5k (includes mortgage)
Age: Me:35 (EM Physician transitioning into Urgent Care) Husband: 27 (Resp Therapist looking into the possibility of PA school in the near future) No plans of children.
Desired Asset allocation: 80/20 --48/32/20
HSA: $6,500 invested through TD Ameritrade(VTI ETF + COP)

I am currently paid as a 1099 but will start my new job as W2 in Oct hence the reason I am interested in opening a Solo 401k at Fidelity. My husband currently contributes $18k to his 401k (Fidelity® 500 Index Fund - Premium Class FUSVX)

As soon as I get 401k options for the new job starting Oct I will update this post.

Taxable at Vanguard -- $290K -- 68%
$205k 48% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)
$85k  20% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.14%)

Solo 401k at Fidelity -- $135K -- 32%
$50k 12%(FSGDX) Spartan Global ex U.S. Index Fund Advantage Class (0.14%)
$85k 20% (FSITX) Spartan U.S. Bond Index Fund Advantage Class (0.07%)

Is there any reason to have stocks in my Solo 401k seeing as how I will no longer be able to contribute $50k a year to a Solo 401k or SEP-IRA, since I will no longer be self-employed?

I understand that we should not "time" the market but with current volatility and going from a 10% correction earlier this year to current all-time highs, would it not be best to wait a little longer to go all in?

Are we holding too much cash in our emergency fund? Any other comments/opinions are welcomed.