An advanced thank you! to any posters who are inclined to offer an opinion. I am not financially savvy. Over the years Ive put taxable $$ in a potpourri of funds without much of a plan. We live a comfortable middle class lifestyle, and have frugal inclinations. Lately Ive been voraciously trolling the WCI website trying to learn and the more I read, the more difficulty I have understanding what I need to do.
I'm 50 years old, employed in private practice, salary $400k/yr, no partnership or business buy-in offered. Would like to (hopefully) go part time at age 55.
My spouse is 50 years old, part time worker, salary $25k/yr. We both max out our 401k each year.
2 children: 15 and 11 years old.
Only debt is 350k mortgage at 2.875% on a home worth $650k.
Our current asset allocation is 96% stock funds/2.6% bond funds/1% cash. Again, I had no plan. But here we are.
All of our assets are in Vanguard except 401ks, which are in employers fund houses.
Amounts are roughly........
401K/IRAs 1.25m, of which 800k in Vanguard IRAs (mostly in 500 index/Total St Mkt index), 450k in employees 401k, mostly aggressive growth funds.
Vanguard 529s 217k total, evenly split between both kids, in TSM index
taxable 5.3m, of which 40% is in 500 index/TSMI. The other 60% is in 8 other funds including
328K extended mkt index
123k global equity fund
688k health care fund
237k REIT
737k small cap index
260k target retirement 2045 fund
274k tax managed balance fund
430k tax managed cap appreciation fund
Question 1. Im thinking of selling some appreciated funds, paying the cap gains tax and paying off the mortgage in order to 'take some chips off the table.' The market has been very red hot. The paper gains could disappear in a downturn. I have no desire to open a business, and little desire to become a landlord/own rental real estate as this can be burdensome. In the past I've been inclined to hold a low mortgage rate for a long time, but in this case, given the market status I may pay off the house. Does this make sense?
Question 2. I know I need to address my asset allocation. I want to do this soon. Im way too heavy in stocks. How do I do this while minimizing the tax hit?
Question 3. I think the REIT is in the wrong place. It kicks off large tax-inefficient dividends. Should I sell it?
Thank you WCI and many of the other financially smart posters for helping me with my rudimentary financial education! At this point however I would kindly ask for some direction because I cant seem to figure out the next moves. Thank you to anyone who is willing to offer an opinion.
Respectfully,
Redpen1
I'm 50 years old, employed in private practice, salary $400k/yr, no partnership or business buy-in offered. Would like to (hopefully) go part time at age 55.
My spouse is 50 years old, part time worker, salary $25k/yr. We both max out our 401k each year.
2 children: 15 and 11 years old.
Only debt is 350k mortgage at 2.875% on a home worth $650k.
Our current asset allocation is 96% stock funds/2.6% bond funds/1% cash. Again, I had no plan. But here we are.
All of our assets are in Vanguard except 401ks, which are in employers fund houses.
Amounts are roughly........
401K/IRAs 1.25m, of which 800k in Vanguard IRAs (mostly in 500 index/Total St Mkt index), 450k in employees 401k, mostly aggressive growth funds.
Vanguard 529s 217k total, evenly split between both kids, in TSM index
taxable 5.3m, of which 40% is in 500 index/TSMI. The other 60% is in 8 other funds including
328K extended mkt index
123k global equity fund
688k health care fund
237k REIT
737k small cap index
260k target retirement 2045 fund
274k tax managed balance fund
430k tax managed cap appreciation fund
Question 1. Im thinking of selling some appreciated funds, paying the cap gains tax and paying off the mortgage in order to 'take some chips off the table.' The market has been very red hot. The paper gains could disappear in a downturn. I have no desire to open a business, and little desire to become a landlord/own rental real estate as this can be burdensome. In the past I've been inclined to hold a low mortgage rate for a long time, but in this case, given the market status I may pay off the house. Does this make sense?
Question 2. I know I need to address my asset allocation. I want to do this soon. Im way too heavy in stocks. How do I do this while minimizing the tax hit?
Question 3. I think the REIT is in the wrong place. It kicks off large tax-inefficient dividends. Should I sell it?
Thank you WCI and many of the other financially smart posters for helping me with my rudimentary financial education! At this point however I would kindly ask for some direction because I cant seem to figure out the next moves. Thank you to anyone who is willing to offer an opinion.
Respectfully,
Redpen1
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