I would like to have your comments on the following portfolio
allocations for a couple in RMD. It is assumed that that the
taxable and sheltered accounts are equal and all are with Vanguard.
Also assume that income is needed from both accounts.
Taxable Accounts:
25% Tax Managed Growth & Income
12.5% Tax Managed International
12.5% Tax Managed Small Cap
25 % 5 year CD ladder with Penfed
15% Intermediate Term Bond Index
10% Prime Money Market
Sheltered:
25% Windsor II
12.5% Small Cap Value
12.5% REIT
10% Prime Money Market
10% Unhedged Foreign Bond (GIM)
30% CPI linked bonds paying 2+% plus CPI
Another alternative would be to split the stock accounts up
as per the "coffeehouse" approach with 8.33% to each
account. Thus the 3 tax managed funds in the taxable
account would have equal weight with the 3 value funds
in the sheltered account and the combined ports would be 50/50.
Some of you may recall that my IRA is currently allocated
via coffeehouse with equal weight to Large Cap, Windsor II
Small Cap, Small Cap Value, Small Cap International, Total
international and REIT while the taxable account is in
Wellesley.
I believe the 1st approach would be a little more conservative
than the 2nd and it would allow me to go with the Admiral
class on Windsor II and Tax Managed Growth and Income.
8.33% of the combined ports would be allocated to each
stock fund under the coffeehouse method.
My thinking on the S&D taxable account is to rebalance stocks with
income from the bonds/cash and just let them drift higher (I hope)
until the 5 year penalty period has expired. In any case if we hit
a bad downturn I can add to the stocks with money from bonds/cash.
My hope is to let the taxable stock funds grow and pass on to
my children that which will inevitably come from my Mom in the
next few years.
To some, this exercise may be "counting your chickens too soon",
but I have enough in my taxable account now to start the clock
ticking on the penalty and just add to the funds later.
I am looking forward to your comments.
Cheers,
Charlie
allocations for a couple in RMD. It is assumed that that the
taxable and sheltered accounts are equal and all are with Vanguard.
Also assume that income is needed from both accounts.
Taxable Accounts:
25% Tax Managed Growth & Income
12.5% Tax Managed International
12.5% Tax Managed Small Cap
25 % 5 year CD ladder with Penfed
15% Intermediate Term Bond Index
10% Prime Money Market
Sheltered:
25% Windsor II
12.5% Small Cap Value
12.5% REIT
10% Prime Money Market
10% Unhedged Foreign Bond (GIM)
30% CPI linked bonds paying 2+% plus CPI
Another alternative would be to split the stock accounts up
as per the "coffeehouse" approach with 8.33% to each
account. Thus the 3 tax managed funds in the taxable
account would have equal weight with the 3 value funds
in the sheltered account and the combined ports would be 50/50.
Some of you may recall that my IRA is currently allocated
via coffeehouse with equal weight to Large Cap, Windsor II
Small Cap, Small Cap Value, Small Cap International, Total
international and REIT while the taxable account is in
Wellesley.
I believe the 1st approach would be a little more conservative
than the 2nd and it would allow me to go with the Admiral
class on Windsor II and Tax Managed Growth and Income.
8.33% of the combined ports would be allocated to each
stock fund under the coffeehouse method.
My thinking on the S&D taxable account is to rebalance stocks with
income from the bonds/cash and just let them drift higher (I hope)
until the 5 year penalty period has expired. In any case if we hit
a bad downturn I can add to the stocks with money from bonds/cash.
My hope is to let the taxable stock funds grow and pass on to
my children that which will inevitably come from my Mom in the
next few years.
To some, this exercise may be "counting your chickens too soon",
but I have enough in my taxable account now to start the clock
ticking on the penalty and just add to the funds later.
I am looking forward to your comments.
Cheers,
Charlie
