**New to investing. Need help with asset allocation/location
I was hoping I could get your input on my asset allocation/location. I am new to all of this so apologies in advance if my verbiage sounds off. I have recently started putting money away and am now deciding how to invest it and would really appreciate any help. I have broken down the total amount I have saved below.
Quick background. I am relatively young (35 years old) with plans to retire in 30years. I am a high income earner in the highest income tax bracket with $7800 employer contribution in my 401k with plans to contribute my $18k before the year end. In our own account, I have done a "backdoor Roth conversion" for myself and my wife (total of $11k) and have an additional $7500 in a brokerage. I figured I'm mainly going to focus on ETF's given their tax efficiency. I want to start off with an aggressive portfolio and adjust as I get older. I welcome any comments to help me fine tune my plan. Thanks
In summary: total currently saved ($26k). With the $18k I will soon add to my 401k, I will be at $44k.
a. 65% U.S.
i. 16.25% VTI (total market)
ii. 16.25% VYM (large value, high dividend)
iii. 16.25% VOT (mid growth)
iv. 16.25% VBR (small value)
b. 30% International
i. 20% VEA (developed)
ii. 10% VWO (emerging)
a. VTEB (municipal)
I feel like deciding on an asset allocation has not been as difficult as figuring out asset location. To simplify it for myself, I have tried to break it down into tax efficient and inefficient asset classes. My employer 401k plan does not have great funds in there but I have found a few worth considering. My biggest problem is not knowing which asset class is best put into the 401k.
My plan has NAESX which is a small blend Vanguard fund and two international funds that look appealing, Dodge and Cox International (which I believe is closed to new investors) and Pimco total return. Which should I consider in the 401k? Do international funds perform best in a taxable or tax-advantaged account? I know bonds are tax inefficient and are normally recommended in 401k/Roths but I will focus on municipal bonds and since they are slow growth and a smaller portion of my portfolio, I figured leaving them in a taxable account would be better to maximize the growth potential of other asset classes in the 401k. Anyways, I hope this does not sound too confusing. Would love to hear some input on both my allocation and what to emphasize in the 401k and Roth conversion accounts. Thanks
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