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  • New Attending-need help with Retirement Plans

    I finished training and started my first job last July. I don't love the investment options with my employer-most of them have high fees.

    I have already maxed out my 457 B and will max out my 401 K for the year.  All of my contributions are in the Vanguard Institutional Index.

    I want to continue contributing 20% of my income to retirement planning and am trying to have a more diversified portfolio.

    My plan at this point is to invest in a Vangaurd total bond fund with after tax dollars but how can I rebalance my portfolio if all of my pre-tax investments are through work in one fund and all my post tax investments are in a separate bond fund.

    I'm only 32 so I don't mind having all my money in stocks currently but I need to have a long term plan where I can start rebalancing and placing money in less risky investments.

     

     

     

     

     

     

  • #2




    I finished training and started my first job last July. I don’t love the investment options with my employer-most of them have high fees.

    I have already maxed out my 457 B and will max out my 401 K for the year.  All of my contributions are in the Vanguard Institutional Index.

    I want to continue contributing 20% of my income to retirement planning and am trying to have a more diversified portfolio.

    My plan at this point is to invest in a Vangaurd total bond fund with after tax dollars but how can I rebalance my portfolio if all of my pre-tax investments are through work in one fund and all my post tax investments are in a separate bond fund.

     
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    If your plan is to place money that you will not need for 30 - 40 years in a bond fund, then you aggregate all of your holdings in some kind of app or a spreadsheet and adjust all annually. This may necessitate adding equities to the outside portfolio. I acknowledge my advice runs contrary to the conventional wisdom put forth on this site, however, because I'm not an advocate of bonds for any long-term investments.

    You are on the right track about having a plan so you can invest in equities (mutual funds,/ETFs, not stocks). Simple Wealth, Inevitable Wealth (2013 version) explains exactly how to do this. Before someone gets onto me about his advice to hire an advisor, simply ignore that part and read it for the value of portfolio management alone. It is very logical and is an easy read. Once you digest the information, you will see how obvious the planning is and the value of having a plan before returning investing. This method may not be the right one for you, but at least you will have increased your knowledge.

    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      Don't forget the backdoor roth!

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      • #4
        I agree with Johanna on this.   There's no good reason to have bonds if your time horizon is 10 years or more away.  Personally, I will probably never have bonds.  I plan on a 2% withdrawal rate, provided by the Total Market index dividends.

        If you want to diversify, there are lots of acceptable options out there.  Read the WCI post "150 portfolios better than yours" on the home page for a quick and dirty look at some options.

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        • #5
          Don't put bonds in a taxable account. If you want bonds in a taxable account use municipal bonds. I think about 10% bonds is ok at 32. Make sure you have exposure to small caps especially small cap value. You also want 20-30 % in foreign stocks. Vanguard offers all these at really cheap prices

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          • #6
            Hatton1 is correct. Optimal tax efficient asset placement has bonds in a tax-deferred or tax-free account OR muni bonds in taxable.

            I like stock funds in taxable and bonds in the 401(k) for reasons I've discussed here, which also has a link to WCI's 150 portfolios post.

            If you start filling taxable with VTSAX (total stock market) or VFIAX (S&P 500), you'll be able to do some valuable tax loss harvesting eventually. If you choose to include international in your portfolio, start with VGTSX, and there are a couple good tax loss harvesting partners for it.

            It's a lot to take in. The fact that you found this site and forum is a great start!

            Best,

            PoF

             

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            • #7
              Thanks for all the suggestions and advice!!

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