I think you are looking pretty good so far. More information would be helpful but I see a couple things that I would consider.
1. I think an asset allocation for your entire portfolio of 65/35 is likely appropriate for your situation. However I would make both your Roth accounts, 100% stock index funds. The rational is that we would expect stocks to out-perform bonds over a 10-20 year investment horizon. Since the Roth will always be tax free on both growth and withdrawals, generally you want that account to grow faster than your 401k or traditional IRA. So typically, the suggestion is to hold your bond funds in a 401k or IRA and put equities only in Roth.
Of course that all depends on what the total balances are. In your situation, with $700k total investment portfolio, you could then have $200k of stock funds in your Roth accounts and then $255k equities in your wife's 401k and then then the $245k of bond funds. There is no cost to changing allocations inside retirement accounts so those changes could/should be made right away. (if you wife agrees). Then future contributions to the 401k could be 50/50 stock/bonds and future Roth contributions would be 100% stocks. You can then rebalance yearly inside the 401k as desired or adjust the ratio of future 401k contributions.
2. There is a lot of difference of opinion on whether an international allocation is important, and if so, what that should be. My ignorant opinion is that a market cap weighting is a good place to start. Right now that is about 62% US and 38% ex-US. I think a great argument can be made for anything between a 20% to 50% international position.
I tend to try to make things easy on me. You could put your Roth 100% in VXUS (Vanguards total international ETF), put your Wife's Roth into VT (Vanguards total world ETF) and then keep the equity position in the 401k in US equities. All together, this would give you roughly a 30% international position in your stock portfolio. In my situation, my Wife's Roth is 100% US and my Roth is 83% ex-US and 17% US. Not having to rebalance my wife's Roth account makes things easy. My Roth will soon be 100% ex US and all rebalancing will be done inside my IRA.
3. If you have additional funds to invest after maxing out the 401k, IRAs, and any HSA, then start to invest in a taxable brokerage account. I would use low-cost, broad market ETFs. Since you are invested in VTSAX in your Roth accounts, I would avoid using VTI in your taxable. Instead look at SCHB, ITOT, SPTM, or DFUS. They are all reasonably tax efficient and provide good US market coverage yet won't create potential wash sale issues with your Roth accounts if you ever decide to tax loss harvest. DFUS is an outlier as it has a higher ER than the others and isn't strictly an index fund. However, its performance has been better than the others and it is marginally more tax efficient.
I would avoid putting any fixed income in your taxable account since they will produce taxable income which will create a tax drag. Much better to let it grow and then spend out of it at long term capital gains rates or to donate appreciated funds if you are charitably minded.
Other's will likely offer better, more reasoned advice.
1. I think an asset allocation for your entire portfolio of 65/35 is likely appropriate for your situation. However I would make both your Roth accounts, 100% stock index funds. The rational is that we would expect stocks to out-perform bonds over a 10-20 year investment horizon. Since the Roth will always be tax free on both growth and withdrawals, generally you want that account to grow faster than your 401k or traditional IRA. So typically, the suggestion is to hold your bond funds in a 401k or IRA and put equities only in Roth.
Of course that all depends on what the total balances are. In your situation, with $700k total investment portfolio, you could then have $200k of stock funds in your Roth accounts and then $255k equities in your wife's 401k and then then the $245k of bond funds. There is no cost to changing allocations inside retirement accounts so those changes could/should be made right away. (if you wife agrees). Then future contributions to the 401k could be 50/50 stock/bonds and future Roth contributions would be 100% stocks. You can then rebalance yearly inside the 401k as desired or adjust the ratio of future 401k contributions.
2. There is a lot of difference of opinion on whether an international allocation is important, and if so, what that should be. My ignorant opinion is that a market cap weighting is a good place to start. Right now that is about 62% US and 38% ex-US. I think a great argument can be made for anything between a 20% to 50% international position.
I tend to try to make things easy on me. You could put your Roth 100% in VXUS (Vanguards total international ETF), put your Wife's Roth into VT (Vanguards total world ETF) and then keep the equity position in the 401k in US equities. All together, this would give you roughly a 30% international position in your stock portfolio. In my situation, my Wife's Roth is 100% US and my Roth is 83% ex-US and 17% US. Not having to rebalance my wife's Roth account makes things easy. My Roth will soon be 100% ex US and all rebalancing will be done inside my IRA.
3. If you have additional funds to invest after maxing out the 401k, IRAs, and any HSA, then start to invest in a taxable brokerage account. I would use low-cost, broad market ETFs. Since you are invested in VTSAX in your Roth accounts, I would avoid using VTI in your taxable. Instead look at SCHB, ITOT, SPTM, or DFUS. They are all reasonably tax efficient and provide good US market coverage yet won't create potential wash sale issues with your Roth accounts if you ever decide to tax loss harvest. DFUS is an outlier as it has a higher ER than the others and isn't strictly an index fund. However, its performance has been better than the others and it is marginally more tax efficient.
I would avoid putting any fixed income in your taxable account since they will produce taxable income which will create a tax drag. Much better to let it grow and then spend out of it at long term capital gains rates or to donate appreciated funds if you are charitably minded.
Other's will likely offer better, more reasoned advice.
Statistics: Posted by WeakOldGuy — Fri Feb 06, 2026 2:01 pm — Replies 6 — Views 294