Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
35 Year Old Progress
Old 05-31-2015, 02:09 PM   #1
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
35 Year Old Progress

Hi All - I have been working to improve my focus on investing and wanted to get some input on how I have things invested/allocated. Now, let me preface my post by acknowledging I have too much in cash. There are reasons for this that are not worth getting into here. Currently I am in the process of DCA from my high yield savings account into my individual account ETF's. So, be patient with me on that. . With that said, here it goes...

High Yield Savings (1% interest): $145K
Other Various Savings (0.04% interest): 32K
Individual Investment Account: $306K VTI (30%), VEU (20%), FUSVX (40%), F (10%)
Traditional IRA $134K in VTI (50%), VEU (30%), BND (20%)
Roth IRA: $34K in VTI (50%), VEU (30%), BND (20%)
401K: $170K in VINIX
TOTAL ASSETS: $821K

Other Comments:
  • I have no debt
  • I do not own a home. I rent.
  • I own a car.
  • I max out my 401K, and my employer matches my contributions at 7% (4% retirement contribution & 3% employer match).
  • I cannot contribute anything to my Roth now because my compensation is above the allowed contribution limit. The current money showing in my Roth is from contributions many years ago.
  • I will eventually get out of F and FUSVX in my individual account and DCA that money into the index funds. There are some of my legacy investments that still linger. They are making money now, so there is no sense getting out of them at the moment until I can put those funds to work (after I DCA my high yield savings account money).

One thing I want to specifically ask the group is around back-door Roth contributions. Currently I have a Traditional IRA from a previous company roll-over. I like this account because I have the VTI, VEU, BND investment options...and anything else I may want to invest in...vs and 401K where the investment options are limited to what the plan provides. My current 401k plan offers quite a few investment options...but all except 2 have fairly high management fees. So, these two low management fee funds are what I stick to. Anyway, my question is, do you think it's worth rolling everything from my Traditional IRA into my current employers 401K so that I can easily do a back-door Roth contribution every year? I'm really struggling with this one and am not sure if it is worth losing the investment options I have in my current Traditional IRA account.

Thanks for your input and look forward to your comments!
__________________

__________________
BergLust is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-31-2015, 08:49 PM   #2
Recycles dryer sheets
 
Join Date: Jan 2015
Location: Midwest (Not Quite The Boondocks)
Posts: 65
Welcome to E-R.org!

What's your timeline to FIRE?

The answer to that question may help answer some of your others
__________________

__________________
DROPOUT is online now   Reply With Quote
Old 06-01-2015, 01:35 PM   #3
Confused about dryer sheets
 
Join Date: Jun 2015
Location: Boise
Posts: 4
Quote:
Originally Posted by BergLust View Post
High Yield Savings (1% interest): $145K
Other Various Savings (0.04% interest): 32K
Individual Investment Account: $306K VTI (30%), VEU (20%), FUSVX (40%), F (10%)
Traditional IRA $134K in VTI (50%), VEU (30%), BND (20%)
Roth IRA: $34K in VTI (50%), VEU (30%), BND (20%)
401K: $170K in VINIX
TOTAL ASSETS: $821K

Do you think it's worth rolling everything from my Traditional IRA into my current employers 401K so that I can easily do a back-door Roth contribution every year
Well a) you're way ahead of me, and most 35 year olds.

b) If your current employer offers low-fee style funds, like the Admirals from Vanguard, or the Spartan funds from Fidelity, it seems like it could be a win.
__________________
CloudNine is offline   Reply With Quote
Old 06-01-2015, 06:49 PM   #4
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
Quote:
Originally Posted by DROPOUT View Post
Welcome to E-R.org!

What's your timeline to FIRE?

The answer to that question may help answer some of your others

Hi dropout. It should be achievable in 10 years. I use early retirement planner as my gauge. Your comments and suggestions are appreciated!
__________________
BergLust is offline   Reply With Quote
Old 06-04-2015, 07:14 AM   #5
Recycles dryer sheets
 
Join Date: Nov 2013
Posts: 357
You don't need to do a rollover of your tIRA in order to make backdoor roth IRA contributions easily... You should be able to do it anyway. I suspect that if your income is too high to make Roth IRA contributions, you'd not want to take the tax hit of rolling your tIRA over.

Another way to get more Roth IRA savings is to do After tax contributions to your 401(k), if those are allowed, you can roll those contributions over into a Roth IRA. My company allows 9% after tax contribution on top of the $18,000 to the 401(k). I roll that over every month into a Roth IRA.
__________________
NgineER is offline   Reply With Quote
Old 06-04-2015, 08:53 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,904
Quote:
Originally Posted by molof View Post
You don't need to do a rollover of your tIRA in order to make backdoor roth IRA contributions easily... You should be able to do it anyway. I suspect that if your income is too high to make Roth IRA contributions, you'd not want to take the tax hit of rolling your tIRA over.

Another way to get more Roth IRA savings is to do After tax contributions to your 401(k), if those are allowed, you can roll those contributions over into a Roth IRA. My company allows 9% after tax contribution on top of the $18,000 to the 401(k). I roll that over every month into a Roth IRA.
This +1

We did this when we found out about it up until retiring this year. $20k extra a year into a Roth beats a $5500 backdoor Roth (although my wife also did the backdoor Roth since she had no tIRA).
__________________
Fermion is offline   Reply With Quote
Old 06-04-2015, 11:11 AM   #7
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
Hello molof. Thanks for the comments.

Quote:
Originally Posted by molof View Post
You don't need to do a rollover of your tIRA in order to make backdoor roth IRA contributions easily... You should be able to do it anyway. I suspect that if your income is too high to make Roth IRA contributions, you'd not want to take the tax hit of rolling your tIRA over.
I am aware that I do not NEED to roll my tIRA into my 401K, but I think I would want to do this otherwise I have to pay tax on ALL of the money in the tIRA...even if I just convert a small amount to the rIRA. This is a website from boggleheads that I was reading on this topic. Backdoor Roth: A Complete How-To. Does this seem correct to you?

Quote:
Originally Posted by molof View Post
Another way to get more Roth IRA savings is to do After tax contributions to your 401(k), if those are allowed, you can roll those contributions over into a Roth IRA. My company allows 9% after tax contribution on top of the $18,000 to the 401(k). I roll that over every month into a Roth IRA.
Unfortunately, this is not an option for me. My employer only offers a Roth 401K and not after tax contributions into the 401K. Disappointing.
__________________
BergLust is offline   Reply With Quote
Old 06-04-2015, 08:12 PM   #8
Recycles dryer sheets
 
Join Date: Nov 2013
Posts: 357
Yes,
I'd trust the bogleheads guide
__________________
NgineER is offline   Reply With Quote
Old 06-05-2015, 04:59 PM   #9
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 406
Quote:
Originally Posted by BergLust View Post
Hello molof. Thanks for the comments.



I am aware that I do not NEED to roll my tIRA into my 401K, but I think I would want to do this otherwise I have to pay tax on ALL of the money in the tIRA...even if I just convert a small amount to the rIRA. This is a website from boggleheads that I was reading on this topic. Backdoor Roth: A Complete How-To. Does this seem correct to you?
You're correct. I was in a similar situation last year but my megacorp has better low cost options so I rolled over my IRA to current 401K and used backdoor Roth. I also found out that my mega corp allows after tax 401K(maxed out at 10% of salary) so I've been funding that as well. This way..I'm saving 24K in 401K, 12 K company Match, 6.5K backdoor Roth IRA and about 20K in Roth 401K - total of about 62K.
__________________
Retired at age 52 on 12/1/2016
AA:60/40 WR:3% until 2022 then 4% is the plan
retire2020 is online now   Reply With Quote
Old 06-05-2015, 05:09 PM   #10
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 406
Quote:
Originally Posted by BergLust View Post
Hello molof. Thanks for the comments.

Unfortunately, this is not an option for me. My employer only offers a Roth 401K and not after tax contributions into the 401K. Disappointing.
I think you are confused. You may want to check again with your employer. Roth 401K is after tax contribution in to 401K. My megacorp has the same option but you're still allowed to max out pretax 401K and then additional whatever % they allow in Roth 401K. However total contribution(PreTax 401K + Company match + Roth 401K) can not be greater than Annual Defined Contribution which is 53K for 2015.
__________________
Retired at age 52 on 12/1/2016
AA:60/40 WR:3% until 2022 then 4% is the plan
retire2020 is online now   Reply With Quote
Old 06-05-2015, 09:35 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Quote:
Originally Posted by retire2020 View Post
I think you are confused. You may want to check again with your employer. Roth 401K is after tax contribution in to 401K. My megacorp has the same option but you're still allowed to max out pretax 401K and then additional whatever % they allow in Roth 401K. However total contribution(PreTax 401K + Company match + Roth 401K) can not be greater than Annual Defined Contribution which is 53K for 2015.

I think you are confused.


Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 11-08-2015, 09:19 AM   #12
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
Hi All,
Thought I'd give an update of things since it has been a while. The biggest move I made was to tax loss harvest FUSVX in my individual account during the dip in September. TLH is -$6,321. I will use that loss to balance gains on some company stock that I was granted and I exercised. I still need to sell that company stock this year. I will only sell the amount that equals the TLH amount on the FUSVX. When I did the TLH I immediately reinvested some of that money in VTI and VEU (also in my individual account), which was part of my plan to begin with. So, I think it was a good move. Feel like I got some things "on sale" :-) Your comments are welcome on that move.

Below are my holdings and value now. One note, if you compare this to my original post you will see 'F' is in my Roth account now. I made a mistake in my original post and reported it to you in the wrong account. I still intend to sell that and reallocate into VTI, VEU, BND in my Roth. I just haven't done it yet.

High Yield Savings (1% interest): $12,585
Other Various Savings (<0.04% interest): $31,906
Individual Investment Account: $432,588, VTI (49%), VEU (25%), COMPANY STOCK (7%), CASH (19%)
Traditional IRA: $130,560, VTI (52%), VEU (31%), BND (16%), CASH (1%)
Roth IRA: $32,577, VTI (28%), VEU (19%), BND (7%), F (44%), CASH (2%)
401K: $183,160, VINIX (100%)
TOTAL ASSETS: $823,356

My YTD IRR (calculated by quicken) is shown below. I'm not sure if this is a good measure or not, but the thing that is dragging the YTD IRR down seems to be the VEU in the accounts. Thoughts on my measure, allocation or strategy?

Individual Investment Account: -1.84%
Traditional IRA: +0.02%
Roth IRA: -1.29%
401K: +4.45%
Total: +0.32%

Finally, after much frustrating discussion my company will not allow AFTER TAX dollars in their 401K plan. It's simply not a priority for them to administer. There are other priorities they are working on and the business climate is such they cannot take on things like this in addition to their current priorities. At least I have an answer, I guess.

Well, that's all for now and I look forward your feedback!
__________________
BergLust is offline   Reply With Quote
Old 11-08-2015, 12:49 PM   #13
Dryer sheet wannabe
 
Join Date: Nov 2015
Posts: 12
I feel like it is good to see that you've transferred a lot of that excess cash into your investments, that just seemed like a lot to have sitting in cash at your age.
__________________
teej1985 is offline   Reply With Quote
35 Year Old Progress
Old 11-08-2015, 01:28 PM   #14
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
35 Year Old Progress

Quote:
Originally Posted by teej1985 View Post
I feel like it is good to see that you've transferred a lot of that excess cash into your investments, that just seemed like a lot to have sitting in cash at your age.

Hi and thanks for the response. Yes, way too much cash and the plan was to start DCA in investments from the first of this year. So far, so good! Still doing monthly DCA...one extra in September due to the TLH of FUSVX.
__________________
BergLust is offline   Reply With Quote
Old 11-12-2015, 09:55 PM   #15
Recycles dryer sheets
 
Join Date: Jan 2014
Posts: 70
If you are looking for some excitement in your diversification, I would suggest investing in something more tangible. Stocks in a way are quite boring to own. I found when we bought a couple rental properties that I really enjoyed the tangible-ness of it. The fact that I owned a place down the road that had someone paying the mortgage was/is fun.

Also, using some of that money to invest in your life experiences could be beneficial as well. We've made some choices that would seem non-optimized on paper but have contributed greatly to our happiness in life (IE, buying a boat and meeting subsequent friends in the boating community). Of course the experience (boat) we bought was bought smartly....it was used and most of the depreciation has been lost before we bought it and even if we own it for 5-6 years we will come out close to even on price.
__________________
YeahNo is offline   Reply With Quote
Old 11-16-2015, 02:35 PM   #16
Full time employment: Posting here.
 
Join Date: Aug 2013
Location: North
Posts: 708
Haha, you are doing way better than I am. I picked the wrong career hehehe.

If I had that kind of money I would retire in 5-10yrs easily.
__________________
AA (Stock/Bond/Cash ): 99/0/1% MIX (Small/Mid/Large): 50/25/25% BLEND(US/Foreign): 100/0%, (Value/Growth/Blend): X/X/X% REIT (Real Estate Equity): 50% of Assets

FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
kgtest is offline   Reply With Quote
Old 11-17-2015, 01:58 PM   #17
Recycles dryer sheets
Exit 2024's Avatar
 
Join Date: Jun 2015
Posts: 127
OP, Looks like you are doing great!!! especially for your age, congratulations!

About back door Roth, yes you need to move Traditional IRA first, but your employer's 401k seems being not that good to plunge such sizable amount there.
We had the same issue but luckily for us we had tiny side business that was bringing about $1k revenue 7-8 years ago and now it brings almost nothing. For that business we got EIN from IRS (specifically requested) and opened Solo 401k (Keogh 401k) with Fidelity. Best part about it is that it will allow incoming rollovers (for example Vanguard Solo 401k does not allow)
That is where all former employers 401ks along with Traditional IRA went.
Yes there is hassle every year to file Schedule C with our tax return but that totally worth it for us.

Not sure if that is any help for you but if you have something going on the side (or can easily organize) - you may want to consider solo 401k.
__________________
Exit 2024 is offline   Reply With Quote
Old 11-17-2015, 06:24 PM   #18
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
Quote:
Originally Posted by YeahNo View Post
If you are looking for some excitement in your diversification, I would suggest investing in something more tangible. Stocks in a way are quite boring to own. I found when we bought a couple rental properties that I really enjoyed the tangible-ness of it. The fact that I owned a place down the road that had someone paying the mortgage was/is fun.

Also, using some of that money to invest in your life experiences could be beneficial as well. We've made some choices that would seem non-optimized on paper but have contributed greatly to our happiness in life (IE, buying a boat and meeting subsequent friends in the boating community). Of course the experience (boat) we bought was bought smartly....it was used and most of the depreciation has been lost before we bought it and even if we own it for 5-6 years we will come out close to even on price.
Thanks for the post and suggestions. I have thought about "investing" in a home, that could be a duplex. Currently, I don't own...mostly because I have a fear of being tied down somewhere. But, perhaps a duplex could ease that a bit.

In terms of life experiences - I do not short myself here and have been pretty happy with my choices. I've been to more countries than I can count (someday I'll do that) for business, and I make it a point to spend extra time there on my own to experience the culture. I have a love for travel and cultures. I also enjoy the outdoors and being in the mountains. I surround myself with people that enjoy the same thing in that regard. I'm happy to splurge on these things, as I realize I can't take money with me and it could all end suddenly tomorrow!
__________________
BergLust is offline   Reply With Quote
Old 11-17-2015, 06:31 PM   #19
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
Quote:
Originally Posted by Exit 2024 View Post
OP, Looks like you are doing great!!! especially for your age, congratulations!

About back door Roth, yes you need to move Traditional IRA first, but your employer's 401k seems being not that good to plunge such sizable amount there.
We had the same issue but luckily for us we had tiny side business that was bringing about $1k revenue 7-8 years ago and now it brings almost nothing. For that business we got EIN from IRS (specifically requested) and opened Solo 401k (Keogh 401k) with Fidelity. Best part about it is that it will allow incoming rollovers (for example Vanguard Solo 401k does not allow)
That is where all former employers 401ks along with Traditional IRA went.
Yes there is hassle every year to file Schedule C with our tax return but that totally worth it for us.

Not sure if that is any help for you but if you have something going on the side (or can easily organize) - you may want to consider solo 401k.
Hi Exit 2024, thanks for the post. So, let me make sure I understand. YOu were able to open a Solo 401K because you officially have a business. Is this a LLC or something else? Anyway, you rolled your Traditional IRA into your Solo 401K, then are doing a backdoor Roth from your Solo 401K into your Roth IRA. Is that correct? I don't understand the Schedule C comment. Why do you have to do that every year?

Sounds interesting, just need some help understanding! Thanks!
__________________
BergLust is offline   Reply With Quote
Old 11-17-2015, 06:34 PM   #20
Dryer sheet aficionado
 
Join Date: May 2015
Posts: 30
Quote:
Originally Posted by kgtest View Post
Haha, you are doing way better than I am. I picked the wrong career hehehe.

If I had that kind of money I would retire in 5-10yrs easily.
Ha! Well, everybody is different I guess. But I was reading your footer and sounds like you will have some nice real estate property in your portfolio, which I don't have. What is your philosophy with real estate? This is something I'm wanting to learn about as an "investment". Would appreciate your comments and experience here.
__________________

__________________
BergLust is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
39 year old doing retirement analysis for 70 year old parents grayparrot Hi, I am... 21 01-07-2012 11:14 PM
10-Year Old Releases Demon of 55-Year Old Opera Singer calmloki Other topics 9 08-12-2010 12:09 PM
44 year old woman takes advantage of 13 year old boy Dawg52 Other topics 37 05-25-2006 12:15 AM
Progress Paradox Interview dimwit FIRE and Money 3 07-13-2005 01:10 AM
Good book - The Progress Paradox Telly Other topics 18 09-07-2004 05:03 PM

 

 
All times are GMT -6. The time now is 12:17 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.