AbenaKParticipantStatus: PhysicianPosts: 2Joined: 09/12/2018
This is my first time posting on this forum, but I visit this website (along with Physician on Fire & Bogleheads) almost daily. My husband and I were lucky enough to start our financial literacy journey during the beginning of my anesthesia sub-specialty fellowship and it has prevented us from making significant mistakes since I took my first attending job this past summer. I am starting this thread because my husband and I have a total of seven retirement accounts (he as a 403b, rollover IRA, and Roth IRA while I have an ORP, 403b, 457, and Roth IRA). We have been making max contributions to all of our pre-tax accounts and have decided on an asset allocation of 70/30 with a three fund portfolio. This asset allocation seems to be perfect for our risk tolerance so far. My questions is what to with my employer contribution to my retirement account. My employer has a 10% match of base salary, bonuses etc. However, only 4% of that money is immediately vested and the other 7% becomes vested after 5 years. So far, the employer contribution is turning into a significant amount of money. Should we include the non-vested contributions in our overall asset allocation when we balance our portfolio? I love my job and plan to stay for the long-term, but plans can change. I’m estimating that the cash contribution once vested in five years will be around $200k. I’m just afraid that if we don’t include this amount in our overall asset allocation now that in five years when I do become vested in the contributions our portfolio will be far off from where we want it in terms of asset allocation.
I hope that my question makes sense. Thanks in advance.January 3, 2019 at 9:21 am MST #178275justlearningParticipantStatus: Other Professional, SpousePosts: 92Joined: 08/15/2017
welcome to forums. I will let pros to chime in. I would not change my asset allocation for that and i would not count in my net worth as well until it is vested.January 3, 2019 at 9:47 am MST #178296jhwkr542ParticipantStatus: PhysicianPosts: 905Joined: 02/15/2016
I don’t know why you wouldn’t include it. I’d include it in your allocation. It’s your money. How would you even invest it differently? Our profit sharing contributions are vested but it just gets tossed in like all the other contributions. If we leave, then the contributions would be removed.January 3, 2019 at 10:02 am MST #178300jacoavluModeratorStatus: Physician, Small Business OwnerPosts: 1676Joined: 03/01/2018
There’s no right or wrong answer. I’d probably include it in my numbers if I thought it was likely I’d still be at the job for the funds to vest
The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVATimParticipantStatus: AccountantPosts: 1095Joined: 09/18/2018
1) I’m just afraid that if we don’t include this amount in our overall asset allocation now that in five years when I do become vested in the contributions our portfolio will be far off from where we want it in terms of asset allocation.
You plan to stay, so include it.
2) Your allocation is based on your best estimate.
When the facts change, change as needed to adjust.
One way or another, in between, how would think one would best address it? I can’t think of a reason to exclude it. You plan on staying there, best wishes.January 3, 2019 at 10:40 am MST #178316