{"id":19460,"date":"2025-01-09T15:38:50","date_gmt":"2025-01-09T15:38:50","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/566-qa-breaking-up-with-total-market-funds-after-10-years\/"},"modified":"2025-01-09T15:38:50","modified_gmt":"2025-01-09T15:38:50","slug":"566-qa-breaking-up-with-total-market-funds-after-10-years","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=19460","title":{"rendered":"#566: Q&A: Breaking Up with Total Market Funds After 10 Years"},"content":{"rendered":"


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\"\"Jackie is sold on Paul Merriman\u2019s \u201cFour Funds\u201d approach, but she\u2019s overwhelmed by the logistics of diversifying her single fund portfolio.. What are the best practices to redistribute her investments, handle taxes, and manage rebalancing?<\/p>\n

Heidi\u2019s mother recently passed and she\u2019s struggling to decide between distribution options, their tax implications, and investment options for the annuity she inherited.<\/p>\n

An anonymous caller and her husband want to buy a second home, pay for their children\u2019s college, buy a car in cash, travel well, and save $3 to $4 million for retirement. How do they prioritize and manage their competing goals?<\/p>\n

Former financial planner Joe Saul-Sehy and I tackle these three questions in today\u2019s episode.<\/p>\n

Enjoy!<\/p>\n

P.S. Got a question? Leave it here<\/a>.<\/p>\n

_______<\/p>\n

Jackie asks (at 02:26 minutes<\/strong>): My husband and I are in our late 30s, and your insights have convinced us to shift away from our current approach of keeping everything in Total Stock Market and S&P 500 index funds. Instead, we\u2019d like to follow a strategy similar to Paul Merriman\u2019s \u201cFour Funds\u201d approach.<\/p>\n

But here\u2019s where we\u2019re stuck: the logistics.<\/p>\n

We have $1 million in investments spread across nine accounts: we each have a 401(k) through our employers, a Roth IRA, a traditional IRA, and an HSA. We also share a brokerage account.<\/p>\n

They\u2019re all invested in broad index funds, but we don\u2019t have much experience selecting investments beyond that.<\/p>\n

Do we need to pick new funds for each account to diversify? If so, managing nine accounts seems overwhelming and far beyond the \u201c45 minutes a year\u201d approach Joe recommends.<\/p>\n

We\u2019re also unsure about tax implications. Will selling our current funds to buy others trigger taxes? And how often will we need to rebalance all these accounts\u2014every year?<\/p>\n

Heidi asks (at 32:39 minutes<\/strong>): My mother recently passed, leaving an annuity of $500,000. The advisor suggested a 10-year distribution at $5,000 monthly, but I\u2019m considering a 15-year option to reduce the tax impact.<\/p>\n

My husband and I are in our early 30s. We have a combined income of $160,000 and are in the 22 percent tax bracket. Which approach is most beneficial, and what else should we know about investing this money?<\/p>\n

Anonymous asks (at 52:30 minutes<\/strong>):\u00a0 I\u2019m struggling to figure out how to prioritize our financial goals, and I\u2019d love your advice.<\/p>\n

I\u2019m 34, my husband is 40, and we have two kids, ages one and five. We earn $265,000 annually (pre-tax) and have the following financial snapshot:<\/p>\n