New to the Board

[OutAt50]

Hi all,

Ive been lurking for the past 3 months or so but this is my first post. Ive found lots of great information here. A little background - my wife and I are both 33 and recently married. There are no kids as of yet although they are in the plans in the next couple of years. My goal is to be retired at 50 at the latest, preferebly earlier. I like my job but I there are tons of things Id rather be doing that I like better. My wife has a lot of responsibilty, likes her job to an extent but works way to many hours and quality of life is suffering. We live in the DC Metro area. Combined salary of approx 210K with another 60K in bonus. Only debt is our mortgage of $525K. We have $250K in retirement accounts,50K in taxable, 200K in equity. We both are maxing our 401K's and Im currently trying to set up our taxable portfolio. Im trying to get a handle on our expenses but we do spend a fair amount right now getting settled into our house we bought last year and we also go out to nice restaurants probably twice a week.

I am currently setting up a taxable portfolio at Vanguard and have looked into the tax managed funds they offer. Someone here had posted a 20 year portfolio and I was looking at doing something similar.

Taxable Account 20 year account: William Bernstein
30% Vanguard Tax-managed Growth & Income
20% Vanguard Intermediate Term Tax exempt
20% Vanguard Limited Term Tax exempt
15% Vanguard Tax-Managed Small Cap
15% Vanguard Tax-Managed International

Is this what I should be looking for with lets say 15-17 years left until retirement? Should I be that concentrated into bonds(40%) or should I look into adding another fund or so. I'll consider any recommendations you all have.

thanks for listening, sorry it was so long winded.

RetireAt50

 

[maddythebeagle]

welcome, have you thought of just adding index funds?, but if you like active management, vanguard is probably the best. I am a little younger than you, but havent considered bonds. I am starting to think more about them as I get older and am taking the time to understand them. On FIRE, from what you indicated, your net worth is in the 500k range? I think with that salary, you are a "a below average accumulator" and you might need to lower your cost of living to retire early, but that is what I see on the surface. You need to run your own numbers. I just did a poll here and it looked like folks on these boards are about split 50/50 on being "average" and "over achievers", so that says something on getting a leash on expenses.

 

[OutAt50]

maddythebeagle,

I agree with you that we are probably a little below avg in accumulation and our expenses are high right now. We are sitting on 100K in cash(which part is going to go towards the Vanguard investment) so net worth is in the 600K range. The salarys/bonus just took a decent jump in the last year so that also skews it a little ... we were at 175K/30K salary/bonus to start 2005.

I have thought about index funds. Would they we more tax efficient than the tax-managed funds I listed? Because of our income, I was hoping to keep the taxable portfolio from producing much taxable income. What do you think my Stock/Bond % should be at my age? I was thinking 80/20?

RetireAt50

 

[tozz]

Outat50Outat39,

Setting aside your investment question, with your income you could be well positioned to retire before 40, much less 50.  As maddy mentioned, this would involved a lifestyle change.  I lived in DC for a few years.  Despite the dollar sucking distractions, it is certainly possible to live modestly but quite comfortably for less than $100K.  "Pinch" a little and sock away the rest and you could have the independance that most could only dream of in their late 30's.  We should introduce you to another (former?) regular, Donner, and you can put your heads together and figure out whether its the water or the air that causes the live large phenomenon in the DC area.

Good luck.

Tozz
(Not a criticism of you or Donner--I'm envious of you both!)

 

[poyet]

Come on, 600k$ @33 is not bad at all !!!
The biggest danger over 18 years for your savings is inflation.
You can hedge against only with stocks and real estate (I would recommend commercial RE to have an income to pay for the mortgage on the investment). Hedge means here a positive inflation adjusted return. Therefore the big decision is to chose between 100% stocks (index, funds, whatever...) or 50% NNN props and 50% stocks. Of course you need to live somewhere and the equity in the house should match your living requirements but not more, i.e. not too big of a house...
My two euro cents.
Patrice.

 

[maddythebeagle]

I have thought about index funds. Would they we more tax efficient than the tax-managed funds I listed?

YES, VERY MUCH SO. A LOT LESS TURNOVER.

Because of our income, I was hoping to keep the taxable portfolio from producing much taxable income. What do you think my Stock/Bond % should be at my age? I was thinking 80/20?

- Some people put their bond exposure in 401k or ira. That is what I would do and keep the taxable in more equities.