Floridasky
Confused about dryer sheets
- Joined
- Apr 11, 2014
- Messages
- 2
Thank you kindly in advance for reading.
Emergency funds: 6 months expenses in checking account
Debt: no debt – house and car paid off
Tax Filing Status: Married Filing Jointly
Tax Rate: 28% Federal, no state income tax
State of Residence: Florida
Property taxes: $9000/year ($450k house)
Age: His 34 and Her 31
Kids: two (10 & 4), no more planned
Income: $210k W-2 employee
Health: Both healthy today - parents still alive and healthy on both sides (average age 65) - grandparents on both sides have passed away (average age 90)
Marriage: Happily married for 10 year
Wife: Stay at home mother
Social Security: His should be $12k/year in 2050
Current Asset allocation: 87% stocks / 13% bonds
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 65% of stocks
Portfolio size: 2.2 million
Portfolio taxable: 89%
Portfolio tax-deferred: 4%
Portfolio tax-free: 7%
Capital loss carry-over: $450k (exchanged from sp500 to total stock during 2008-2009 downturn)
Plan on leaving W2 employment when youngest child graduates high school in 13 years and start consulting with self-employed income estimate of 30k/year. Income would be variable and would start at $0/year (i.e early retirement from employer).
Planned expenditures from year 2027 to 2077 (as long as spouse and I are still alive), is approx. $140k/year including taxes.
Portfolio / Market estimated nominal/gross returns: 8% equity [5.5% + 2.5% div] / 3.5% fixed income
Estimated inflation 2.5%
Stock % break down today:
47% vanguard total stock market
25% vanguard total international
16% vanguard small cap value
12% vanguard FTSE small international
Portfolio % break down today:
41% vanguard total stock
22% vanguard total international
14% vanguard small cap value
13% intermediate bonds (20% tax-exempt muni in taxable/ 80% vanguard intermediate bond index)
10% vanguard FTSE small international
Contributions
Annual savings today: 40k/year (17.5k Employee Roth 401k / 11k backdoor roth / 12k Employer 401k contribution)
100% of equity mutual fund dividends purchase vanguard tax-exempt intermediate fund
Questions:
My original plan was to continue on the path we are on which has fixed income reinvesting monthly, and all my contributions are into fixed income as well. The dividends from equity go straight to fixed income funds too.
This has us on a glide-path of being 65% stocks / 35% bonds in approximately 13 years.
At the beginning of this year when we were looking at our 2013 year-end statement, portfolio returns were north of 30% and we surpassed 2.0 million in savings. This had me thinking about preservation of capital.
The thought I have now is this:
Sell $382k of equity to purchase vanguard tax-exempt intermediate bond fund. This will consume approximately 150k of the 450k in capital loss carry-overs. No taxes due.
I would sell portions of vanguard total stock and vanguard total international. I would continue my contributions in the same manner as original plan. (All going into fixed income).
The new breakdown would look as follows:
Equity breakdown:
45% vanguard total stock market
20% vanguard total international
20% vanguard small cap value
15% vanguard FTSE small international
Portfolio breakdown:
30% intermediate bonds (65% tax-exempt muni in taxable/ 35% vanguard intermediate bond index)
30% vanguard total stock market
13% vanguard small cap value
13% vanguard total international
13% vanguard FTSE small international
1% cash
This has us change to 70% stocks / 30% bonds today, and a glide-path of being 55% stocks / 45% bonds in approximately 13 years.
My concern is when I look at my spreadsheets at age 47:
Original plan age 47 portfolio: 6.2million nominal / 4.5million real (65% stocks / 35% bonds) AND portfolio after 45% bear market decline = 3.3 million real
Proposed plan age 47 portfolio: 5.9 million nominal / 4.3million real (55% stocks/ 45% bonds) AND portfolio after 45% bear market decline = 3.2 million real
Both plans have a portfolio value after a bear market decline equal 3.2 or 3.3 million, (3% difference) and the pre-bear market value is about the same, 4.5 or 4.3 million (4.5% difference) – so I am questioning if I should just stay the course.
We plan on traveling while I consult and hope to bring our adult kids with us on some of the better locations – we are assuming a perpetual 3.3% withdrawal rate from Age 47 onwards.
Much appreciated from a longtime lurker,
Sky
Emergency funds: 6 months expenses in checking account
Debt: no debt – house and car paid off
Tax Filing Status: Married Filing Jointly
Tax Rate: 28% Federal, no state income tax
State of Residence: Florida
Property taxes: $9000/year ($450k house)
Age: His 34 and Her 31
Kids: two (10 & 4), no more planned
Income: $210k W-2 employee
Health: Both healthy today - parents still alive and healthy on both sides (average age 65) - grandparents on both sides have passed away (average age 90)
Marriage: Happily married for 10 year
Wife: Stay at home mother
Social Security: His should be $12k/year in 2050
Current Asset allocation: 87% stocks / 13% bonds
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 65% of stocks
Portfolio size: 2.2 million
Portfolio taxable: 89%
Portfolio tax-deferred: 4%
Portfolio tax-free: 7%
Capital loss carry-over: $450k (exchanged from sp500 to total stock during 2008-2009 downturn)
Plan on leaving W2 employment when youngest child graduates high school in 13 years and start consulting with self-employed income estimate of 30k/year. Income would be variable and would start at $0/year (i.e early retirement from employer).
Planned expenditures from year 2027 to 2077 (as long as spouse and I are still alive), is approx. $140k/year including taxes.
Portfolio / Market estimated nominal/gross returns: 8% equity [5.5% + 2.5% div] / 3.5% fixed income
Estimated inflation 2.5%
Stock % break down today:
47% vanguard total stock market
25% vanguard total international
16% vanguard small cap value
12% vanguard FTSE small international
Portfolio % break down today:
41% vanguard total stock
22% vanguard total international
14% vanguard small cap value
13% intermediate bonds (20% tax-exempt muni in taxable/ 80% vanguard intermediate bond index)
10% vanguard FTSE small international
Contributions
Annual savings today: 40k/year (17.5k Employee Roth 401k / 11k backdoor roth / 12k Employer 401k contribution)
100% of equity mutual fund dividends purchase vanguard tax-exempt intermediate fund
Questions:
My original plan was to continue on the path we are on which has fixed income reinvesting monthly, and all my contributions are into fixed income as well. The dividends from equity go straight to fixed income funds too.
This has us on a glide-path of being 65% stocks / 35% bonds in approximately 13 years.
At the beginning of this year when we were looking at our 2013 year-end statement, portfolio returns were north of 30% and we surpassed 2.0 million in savings. This had me thinking about preservation of capital.
The thought I have now is this:
Sell $382k of equity to purchase vanguard tax-exempt intermediate bond fund. This will consume approximately 150k of the 450k in capital loss carry-overs. No taxes due.
I would sell portions of vanguard total stock and vanguard total international. I would continue my contributions in the same manner as original plan. (All going into fixed income).
The new breakdown would look as follows:
Equity breakdown:
45% vanguard total stock market
20% vanguard total international
20% vanguard small cap value
15% vanguard FTSE small international
Portfolio breakdown:
30% intermediate bonds (65% tax-exempt muni in taxable/ 35% vanguard intermediate bond index)
30% vanguard total stock market
13% vanguard small cap value
13% vanguard total international
13% vanguard FTSE small international
1% cash
This has us change to 70% stocks / 30% bonds today, and a glide-path of being 55% stocks / 45% bonds in approximately 13 years.
My concern is when I look at my spreadsheets at age 47:
Original plan age 47 portfolio: 6.2million nominal / 4.5million real (65% stocks / 35% bonds) AND portfolio after 45% bear market decline = 3.3 million real
Proposed plan age 47 portfolio: 5.9 million nominal / 4.3million real (55% stocks/ 45% bonds) AND portfolio after 45% bear market decline = 3.2 million real
Both plans have a portfolio value after a bear market decline equal 3.2 or 3.3 million, (3% difference) and the pre-bear market value is about the same, 4.5 or 4.3 million (4.5% difference) – so I am questioning if I should just stay the course.
We plan on traveling while I consult and hope to bring our adult kids with us on some of the better locations – we are assuming a perpetual 3.3% withdrawal rate from Age 47 onwards.
Much appreciated from a longtime lurker,
Sky