Hi, I'm new here. Been lurking for a few days, but I have a question.
A little background: I'm 35, married, one kid, our incomes combined are $94,000. Taxable savings are approx. $750,000 and tax-deferred savings are approx $250,000. Current allocation is 97% stock, 2% bonds, 1% cash. In addition, there's about $90,000 in a 529 for my daughter which is in a lifecycle fund for her college entrance date. I plan to retire at 55-60, depending on how much of a drag work is and whether the whole health insurance mess is figured out by then. Neither of us has a pension.
I am thinking I need to move a little more into bonds to add some diversification and stability to my accounts. The Vanguard Financial Planner I spoke with is suggesting I move some of my taxable money into bonds, but I'm unsure. I just can't see paying the Cap Gains taxes at this point. I'm considering moving my Traditional IRA (about $150,000) into bonds, but I'm also thinking I should convert my Traditional IRA (all tax-free contributions) to a Roth IRA for all the benefits that it confers. The planner said that you should never put bonds in a Roth because...? I'm not sure of the reason actually.
Is it a better idea just to put any additional savings into bonds to increase my asseet allocation? We save about $20,000/year, sometimes more if my parents are able to gift us money, which they've been doing for several years.
Any thoughts?
A little background: I'm 35, married, one kid, our incomes combined are $94,000. Taxable savings are approx. $750,000 and tax-deferred savings are approx $250,000. Current allocation is 97% stock, 2% bonds, 1% cash. In addition, there's about $90,000 in a 529 for my daughter which is in a lifecycle fund for her college entrance date. I plan to retire at 55-60, depending on how much of a drag work is and whether the whole health insurance mess is figured out by then. Neither of us has a pension.
I am thinking I need to move a little more into bonds to add some diversification and stability to my accounts. The Vanguard Financial Planner I spoke with is suggesting I move some of my taxable money into bonds, but I'm unsure. I just can't see paying the Cap Gains taxes at this point. I'm considering moving my Traditional IRA (about $150,000) into bonds, but I'm also thinking I should convert my Traditional IRA (all tax-free contributions) to a Roth IRA for all the benefits that it confers. The planner said that you should never put bonds in a Roth because...? I'm not sure of the reason actually.
Is it a better idea just to put any additional savings into bonds to increase my asseet allocation? We save about $20,000/year, sometimes more if my parents are able to gift us money, which they've been doing for several years.
Any thoughts?