Managing My Asset Allocation between Different Accounts

In term of asset allocation, the ideal thing is to have your asset allocation from your different accounts to reflect the true asset allocation. But it is a hard thing to do when you have to deal with 401k, 403b or 457 accounts that have limited selection. This discussion is trigger by the article on FundAdvice.com - When your 401(k) plan doesn't have everything you need.

We have four different accounts where we invest our money

• Joint Vanguard Taxable account
• His Vanguard Roth IRA account
• Her Vanguard Roth IRA account
• His 457b Retirement account

I decided that I am going to look at each account separately and handle it that way. It is not ideal solution, but I think I still can get good diversification without over complicating my asset allocation. I modified slightly from FundAdvice.com suggested Vanguard Portfolio. Here is my target asset allocation for each account:

Joint Vanguard Taxable Account

Fund	Asset Class	Percentage
Vanguard Tax Managed G&I	LCB	15%
Vanguard Value Index	LCV	15%
Vanguard Tax Managed Small Cap Index	SCB	15%
Vanguard Small Cap Value Index	SCV	15%
Vanguard Tax Managed International	Intl LCB	10%
Vanguard International Value Index	Intl LCV	10%
Vanguard FTSE All-World ex-US Small-Cap Index Fund	Intl SCB	10%
Vanguard Emerging Markets Stock Index	EM	10%

For our joint taxable account, we invest in 60% US and 40% International. Yes, for some people, this is quite a lot of international equities. FundAdvice.com suggestion is actually 50-50 US-International. I feel comfortable with 60-40 US-International split. Again, remember that I am not financial expert and I do not even consult with financial professional for this asset allocation.

His or Her Roth IRA

Fund	Asset Class	Percentage
Vanguard 500 Index	LCB	8.40%%
Vanguard Value Index	LCV	8.40%
Vanguard Small Cap Index	SCB	8.40%
Vanguard Small Cap Value Index	SCV	8.40%
Vanguard Developed Market Index	Intl LCB	7%
Vanguard International Value Index	Intl LCV	7%
Vanguard FTSE All-World ex-US Small-Cap Index Fund	Intl SCB	7%
Vanguard Emerging Markets Stock Index	EM	7%
Vanguard Short Term Treasury	Bond	9%
Vanguard Intermediate Term Treasury	Bond	15%
Vanguard TIPS	Bond	6%

Similar to Joint Taxable Account, we have 60-40 US-International split on the equity portion. And fixed income portion of our allocation total to 30%. This may seems high for someone in early 30s, but since we don't have any bonds outside our Roth IRA, from our total investments, our bonds allocation is actually rather small, around 15%.

His 457b Account

Fund	Asset Class	Percentage
Stock Index Fund	LCB	30%
Extended Market Fund	MCB & SCB	18%
EAFE Equity Index Fund	Intl LCB	32%
Aggregate Bond Index Fund	Bond	20%

For my 457b account, as expected, the option is limited. There are other options available, but I feel this allocations is the best for me. I could have increase my extended market fund and decrease my stock index fund, thus moving toward my preference of small cap and value fund. However, I don't feel comfortable with that option for this account and funds selection. Also, you will notice 60-40 US-International split for the equity portion.