slamjam wrote:Thanks for all the input guys. My work told me an HSA is out of the question, so that's off the table. At this point I feel like I have a solid plan:
1. Max out my 401k (S&P 500 index), stop contributing to Wife's fee-laden 403b
2. Open Roth IRA for my wife (riskier funds a la Bogleheads portfolio suggestions) and fully fund for 2012 before 4/15
3. Convert Vanguard mutual fund account from VASGX to... something (need to do more research here since this is the only account that qualifies for admiral shares!)
4. Misc savings goals (vacation fund, house stuff)
5. Divert any extra to paying down mortgage
I think 4 and 5 I'll be doing side by side, since I want to get out of debt sooner (and I need to be below 80% LTV to stop paying PMI) but I don't think it makes sense to effectively ignore one or the other (savings vs. mortgage).
Sound good? Any suggestions on funds, especially for the post-tax account ($40k) where I can purchase admiral shares?
You need an asset allocation, and then you pick the funds to fit your desired allocation. Then you drop them in the appropriate accounts to stay tax efficient. Of course, don't let the tail wag the dog. Taxes are paid, and you stick to your plan.
I hold three funds in my taxable account. VTSAX, VTIAX and VEMAX.
I also didn't mention, but once your taxable account reaches a sufficient size, you can decrease your cash holding. I only hold about $5k in an online savings, $20k in CD's (2.6%) and $12.5k in gubimint bonds. And I'm thinking about terminating the CD's to free up a little cash to invest....when the time is right. Why? Even if I lost half of my equity value, I'd still have enough to live for many years. My cash savings builds quickly. Just something else to think about.