Personal Investments • when/how to separate from sibling financial advisor

Late to the party.

Keep things as simple as possible, until you know enough to make an educated guess about what might work better for you.

Simple.
--A TDR fund is the simple answer, as it contains stocks/bonds, US/international, and a manager is worrying about the AA and rebalancing for you.
--TDR funds, and all all-in-one funds can never conflict with your ability to TLH discrete funds: https://www.bogleheads.org/wiki/Tax_loss_harvesting
--All you have to do is make your annual contributions.

Exception. TDR funds are not tax-efficient so belong in tax-advantaged retirement accounts, not in taxable. In taxable, you want to use the most tax-efficient discrete funds (TSM, TISM,...).

...
Emergency funds: Six months of expenses + addl cash equivalents as savings towards down payment on a house

Debt: None other than a mortgage on a rental property at 4.5% - rent payments from tenants cover mortgage payments + some cash flow

Tax Filing Status: Married Filing Jointly

Tax Rate: 24% Federal What is your CA tax bracket?

State of Residence: CA

Age: 49

Desired Asset allocation: 85% stocks / 15% bonds
Desired International allocation: 10-15% of stocks

At ~50, your AA could be 50/50 (conservative), 60/40 (aggressive), or accept whatever a TDR fund uses. You could skew toward a TDR fund that contains more/less bonds to take less/more risk with stocks. Your choice.

Total portfolio mid/high six-figures.

Current retirement assets:

Taxable at Morgan Stanley
0.09% Berkshire Hathaway (BRKB)
0.32% Morgan Stanley Institutional Fund, Growth Class C (MSGUX) (exp ratio 1.57, back end load 1%)
0.39% Morgan Stanley Institutional Fund, Growth Class A (MSEGX) (exp ratio 0.82, front end load 5.25%)
0.44% AT&T (T)
0.49% Pfizer (PFE)
0.94% The Southern Co. (SOJE), Corporate Fixed Income CPN: 4.2, Due 10/25/2060
0.98% Invesco QQQ Trust (QQQ) (exp ratio 0.2)
1.08% Hartford Balanced Income Fund, Class C (HBLCX) (exp ratio 1.63, back end load 1%)
2.18% Morgan Stanley (MS)
2.78% Apple (AAPL)
3.17% Chevron (CVX)
3.30% SPDR S&P 500 ETF Trust (SPY) (exp ratio .0945)

16.17% Total Taxable at Morgan Stanley

Your idea is acceptable, to move to Fidelity. You want to move your investments in-kind, to avoid MS transaction fees, then at Fidelity, sell gains netted against losses for $0 CGs, as you get the chance, to buy TSM and munis (more on this later).

But before execution, verify with Fidelity that everything can be moved over in-kind. Things that can't be moved in-kind will need to be sold to cash before move.

Ensure you have all cost basis information before moving. This is especially true for your tax-deferred accounts as you'll not need the cost basis information for a few decades. (If you bought funds before Jan 2012, then you own uncovered shares and it’s your responsibility to know your cost basis.)

His Roth IRA at Morgan Stanley
3.37% Morgan Stanley Institutional Fund, Growth Class A (MSEGX) (exp ratio 0.82, front end load 5.25%)
3.04% Invesco QQQ Trust (QQQ) (exp ratio 0.2)
2.35% SPDR S&P 500 ETF Trust (SPY) (exp ratio .0945)
0.22% First Trust Global Wind Energy ETF (FAN) (exp ratio 0.6)
0.24% ARK Innovation ETF (ARKK) (exp ratio 0.75)
0.33% Invesco Equally-Weighted S&P 500 Fund Class A (VADAX) (exp ratio 0.52, front end load 5.5%)
0.85% Franklin Mutual Global Discovery Fund Class A (TEDIX) (exp ratio 1.21, front end load 5.5%)
1.10% Invesco Health Care Fund Class A (GGHCX) (exp ratio 1.06, front end load 5.5%)
1.11% Delaware Ivy Asset Strategy Fund Class A (WASAX) (exp ratio 1.06, front end load 5.75%)
1.15% iShares iBoxx Investment Grade Corporate Bond ETF (LQD) (exp ratio 0.14)
1.22% American Funds American Balanced Fund Class A (ABALX) (exp ratio 0.57, front end load 5.75%)

14.98% Total Roth IRA at Morgan Stanley

Your idea is acceptable, move to Fidelity in-kind, then to avoid transactions fees, sell at Fidelity to buy stock funds (to maximize expected growth), that don't interfere with your ability to TLH. A TDR fund would also be acceptable.

His Rollover IRA at Morgan Stanley
3.15% Invesco QQQ Trust (QQQ) (exp ratio 0.2)
3.33% Hartford Balanced Income Fund, Class C (HBLCX) (exp ratio 1.63, back end load 1%)
9.06% SPDR S&P 500 ETF Trust (SPY) (exp ratio .0945)
1.04% ARK Innovation ETF (ARKK) (exp ratio 0.75)
3.46% Invesco Equally-Weighted S&P 500 Fund Class A (VADAX) (exp ratio 0.52, front end load 5.5%)
1.73% Franklin Mutual Global Discovery Fund Class A (TEDIX) (exp ratio 1.21, front end load 5.5%)
1.74% Invesco Health Care Fund Class A (GGHCX) (exp ratio 1.06, front end load 5.5%)
1.33% iShares iBoxx Investment Grade Corporate Bond ETF (LQD) (exp ratio 0.14)
0.30% iShares Global Clean Energy ETF (ICLN) (exp ratio 0.41)
0.34% Coinbase Global (COIN)
0.46% iShares MSCI Emerging Markets ETF (EEM) (exp ratio 0.7)
0.58% Visa (V)
0.90% JP Morgan Chase (JPM)
1.11% iShares MSCI KLD 400 Social ETF (DSI) (exp ratio 0.25)
1.54% Amazon (AMZN)
1.63% Sutter Health, Corporate Fixed Income CPN: 3.161, Due 8/15/2040
1.82% iShares iBoxx High Yield Corporate Bond ETF (HYG) (exp ratio 0.49)
2.58% iShares S&P Mid-Cap 400 Value ETF (IJJ) (exp ratio 0.18)
3.02% Invesco S&P Ultra Dividend Revenue ETF (RDIV) (exp ratio 0.39)
3.05% Morgan Stanley Institutional Fund, Growth Class L (MSHLX) (exp ratio 1.31)
4.07% Federated Hermes Strategic Value Dividend Fund Class C Shares (SVACX) (exp ratio 1.94, back end load 1%)

46.22% Total Rollover IRA at Morgan Stanley

I’m assuming this is your tIRA. If so...

Your idea is acceptable, move to Guideline in-kind, then to avoid transactions fees, sell at Guideline to buy stock funds (to maximize expected growth), that don't interfere with your ability to TLH. A TDR fund would also be acceptable.

His 401k at Guideline
0.47% Vanguard Real Estate Index Fund (VGSLX) (exp ratio 0.13)
0.77% Vanguard Mid Cap Index Fund (VIMAX) (exp ratio 0.05)
0.95% Vanguard Total Bond Market Index Fund (VBTLX) (exp ratio 0.05)
0.95% Vanguard Short-Term Inflation-Protected Securities Index Fund (VTAPX) (exp ratio 0.06)
0.96% Vanguard Developed Markets Index Fund (VTMGX) (exp ratio 0.08)
1.14% Vanguard Mid Cap Value Index Fund (VMVAX) (exp ratio 0.07)
1.44% Vanguard Small Cap Value Index Fund (VSIAX) (exp ratio 0.07)
2.89% Vanguard 500 Index Fund (VFIAX) (exp ratio 0.04)

9.57% Total 401k at Guideline
Company match is 4%
AUM fee is .08%

Her 401k at Guideline
0% Starts Oct 1st
Company match is 4%

These seem be to okay, but busy. You could convert to TDR fund.

I like your idea to move your tIRA (to eliminate it) into your 401k to allow you to continue using backdoor Roth technique.

At Guideline, can you also use the mega-backdoor Roth technique? If so then it’s another arrow in your quiver to save for retirement.
See: https://www.bogleheads.org/wiki/Mega-backdoor_Roth

Taxable at Fidelity
Cash is all in short-term treasuries and money market - all allocated for down payment on a house
1.8% Berkshire Hathaway (BRKB)
0.16% Dexcom (DXCM)
0.22% iShares Core S&P Total US Stock Market ETF (ITOT) (exp ratio 0.03)

2.19% Total Taxable at Fidelity

When you begin taxable investing for retirement, consider using only TSM, TISM, and muni funds.

If you could find an acceptable CA muni bond fund, it would be triple tax-exempt.

For national muni funds (fed TE, but state taxable) could consider:
--FXNAX (taxable national IT index bonds) SEC yield = 4.24%; see: https://fundresearch.fidelity.com/mutua ... /316146356
--FMBIX (national IT muni) SEC yield = 3.37%; TEY = 3.37/(1-.24)= 4.43%; see: https://fundresearch.fidelity.com/mutua ... /31635T765
--VTEB (national IT muni) SEC yield = 3.40%; TEY = 3.40/(1-.24)= 4.47%; see: https://investor.vanguard.com/investmen ... ofile/vteb
--MUB (national IT muni) SEC yield = 3.35%; TEY = 3.35/(1-.24)= 4.41%; https://www.ishares.com/us/products/239 ... i-bond-etf

For single-state muni funds (triple TE) could consider:
--FCTFX (CA IT muni) SEC yield = 3.20%; TEY = 3.35/(1-.24 -CA tax bracket)=??; see: https://fundresearch.fidelity.com/mutua ... /316061209
--VCAIX (CA IT muni) SEC yield = 3.09%; TEY = 3.09/(1-.24 -CA tax bracket)=??; see: https://investor.vanguard.com/investmen ... file/vcaix
--VCLAX (CA LT muni) SEC yield = 3.52%; TEY = 3.52/(1-.24 -CA tax bracket)=??; see: https://investor.vanguard.com/investmen ... file/vclax
--VCTXX (CA mmkt) SEC yield = 2.68%; TEY = 2.68/(1-.24 -CA tax bracket)=??; see: https://investor.vanguard.com/investmen ... file/vclax

?? I’ll edit this after Vanguard’s system is back up from weekend maintenance, and you tell us your CA tax bracket.

Compare muni TEY (taxable-equivalent yield) to taxable bond SEC yield and bank interest APY. Higher is better.

You'll need a Vanguard account for its funds that don't have an ETF share class. Can search for similar munis/ETFs at Fidelity, iShares,....

The nice thing about TE muni dividends is that they don’t add to taxable income, so don’t advance our tax bracket.

Her Roth IRA at Fidelity
0.10% Fidelity MSCI Energy Index ETF (exp ratio 0.084)
0.11% Fidelity Small Cap Index Fund (FSSNX) (exp ratio 0.025)
0.12% Fidelity Real Estate Index Fund (FSRNX) (exp ratio 0.07)
0.23% Fidelity Mid Cap Index Fund (FSMDX) (exp ratio 0.025)
0.25% Fidelity Contrafund (FCNTX) (exp ratio 0.39)
0.46% Fidelity Total International Index Fund (FTIHX) (exp ratio 0.06)
0.99% Invesco ETF S&P500 EQL WGT (RSP) (exp ratio 0.20)
1.18% iShares Core S&P 500 ETF (IVV) (exp ratio 0.03)
1.67% Fidelity Zero Large Cap Index Fund (FNILX) (exp ratio 0.00)

5.12% Total Roth IRA at Fidelity

A little busy, could convert to TDR fund.

HSA at Fidelity
1.18% Berkshire Hathaway (BRKB)
0.48% Fidelity Small Cap Index Fund (FSSNX) (exp ratio 0.025)
0.28% Fidelity Mid Cap Index Fund (FSMDX) (exp ratio 0.025)
0.58% Fidelity Contrafund (FCNTX) (exp ratio 0.39)
0.56% Fidelity Total International Index Fund (FTIHX) (exp ratio 0.06)
0.37% Invesco ETF S&P500 EQL WGT (RSP) (exp ratio 0.20)
1.39% iShares Core S&P 500 ETF (IVV) (exp ratio 0.03)
0.90% SPDR S&P 500 ETF Trust (SPY) (exp ratio .0945)

5.75% Total HSA at Fidelity

A little busy, could convert to TDR fund.



Welcome.

Statistics: Posted by dratkinson — Sun Nov 03, 2024 1:01 am — Replies 58 — Views 6118

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