Please give me feedback on my portfolio's asset mix

[ESRwannabe]

Hello all,

I have 80k in an IRA with Vanguard, 390k in a taxable acct with Vanguard, 8k in a 401(k) with empower retirement, and 80k in cash. We rent in a HCOL area. No debt of any kind. My income is to high for her to have an IRA. Please let me know how my asset mix looks and where I should allocate future contributions. Thanks!

Your portfolio is fine. I do have a suggestion though. I would suggest that you try to optimize things for tax efficiency.

In the 401k and Traditional IRA I would fill it up with taxable fixed income and/or REITs (or really anything that is tax inefficient. there are a lot more options out there than just stocks and bonds). In taxable I would trade the STAR fund for the tax managed balanced fund. The other stuff is fine. Index funds are tax efficient as is.

You might want to consider increasing your fixed income. I personally like 50/50 stocks and fixed income. I also use leverage (CEFs).

For someone in your tax bracket I would be loading up on municipal bond funds and CEFs. You can buy high credit quality municipal bond CEFs that have better 10 year returns than most balanced funds. Likewise you can buy CEFs of 100% qualified-dividend preferred stocks with better 10 yr total returns than most stock funds.

P.S. I only read the first post. So I don't know if my suggestions were already mentioned or not.

 

[DrRoy]

I make 480k and my wife makes 100k. I don't qualify for much. I can't have a roth. We can't deduct for her IRA. We don't have much in terms of deductions anymore either. Any other options out there?

That does limit things. Perhaps just put all future $ into the new options, and let the others ride. You can then cash out the small accounts first when you start to spend down after RE.

 

[target2019]

Thanks for all of your help and making all the charts!

You're welcome.
Tax-exempt fund was a good suggestion, too, by someone else.

 

[LOL!]

As noted, it looks like tax efficiency is the bugaboo here. Consider that if you had a hot fund, but all the profits/gains were taxed away leaving you less money than you would have had in a Total US Stock Market index fund and/or a Total International Stock Index fund, then what's the point?

Also consider the future: It may be harder to unwind tax inefficient positions in the future because they may have more gains than they do now.

So you are on the path to better tax efficiency, but not simplicity in the taxable account. You can make things complicated in the tax-advantaged accounts if you want because buying, selling, exchanging in the tax-advantaged accounts have no tax consequences.

So the taxable accounts should probably have only 3 investments:
Total US Stock Market Index
Total International Stock Market Index
A tax-exempt bond fund of your choice, maybe one from your state to avoid state taxes, too.

You don't need every fund in every account either.