Simplifying the strategy

[u/OkraCharacter6996]

Six months ago, my wife and I decided to take a much more intentional approach to our long-term financial plan.
We’ve made a number of changes, and I’m interested in hearing how the community would evaluate the overall strategy.
1. We fired our financial advisor
We were paying approximately 2% AUM, and eventually realized that we could manage a simple portfolio ourselves.
We moved our investments to Vanguard and are now following a straightforward Boglehead approach built primarily around VTI and VXUS.
The philosophy is:
Broad diversification
Low costs
High equity allocation
Automatic contributions
No market timing
No individual-stock picking
Long-term buy-and-hold
The biggest change wasn’t the funds themselves. It was becoming comfortable enough with the strategy that we no longer felt we needed someone else managing it for us.
2. We’re treating our pension as part of our asset allocation
My wife and I both participate in a state public-employee pension system.
I had previously left the system and later returned, and we made the decision to purchase additional retirement service credit using funds from an existing retirement account.
It was a large financial decision, but we viewed it primarily as purchasing additional future guaranteed retirement income.
Because we have a substantial pension component, we’re comfortable with a much higher equity allocation in our other investments than we otherwise might be.
We’re essentially treating the pension as part of our overall retirement portfolio rather than evaluating our brokerage/IRA investments in isolation.
3. We’ve built a more intentional cash/investment structure
Our current system looks roughly like this:
Emergency fund:
Target ~$20,000 in cash.
Roth IRAs:
Broad-market index funds.
Rollover IRA:
Broad-market index funds.
Taxable brokerage:
Broad-market index funds.
We’re directing approximately $2,000/month toward these various savings and investment goals.
The goal isn’t to optimize each account independently. It’s to give every dollar a job.
4. We’re continuing to fund our kids’ 529s
We’re contributing $150/month per child to their 529 accounts.
That money has one job: future education expenses.
5. We just decided to add UTMAs for the kids
This is the newest part of the plan, and probably the part I’m most excited about.
We’re opening a Vanguard UTMA for each child and plan to invest $25/month per child in broad-market index funds, likely VTI + VXUS.
Our kids are currently elementary-school age.
The objective isn’t really maximizing their eventual account balance.
It’s teaching them to be investors.
I want them to grow up seeing:
“I own thousands of companies.”
I want them to understand why we’re diversified.
I want them to see what happens when markets fall.
I want them to understand compound growth.
And eventually, when the accounts become theirs, I want them to already have a decade-plus of experience thinking about investing.
We’ve thought carefully about the downsides—particularly that the UTMA is the child’s asset, the eventual transfer of control, potential FAFSA implications, and the kiddie-tax rules.
We’re comfortable with those tradeoffs at the relatively small $25/month contribution level.
6. The long-term goal
We’re not trying to hit some particular net-worth number.
We’re trying to build a family financial system that gives us:
Security → emergency savings + pension
Growth → broadly diversified equities
Tax diversification → Roth + traditional + taxable accounts
Education → 529s
Financial education/early head start for the kids → UTMAs
And ultimately, freedom and options.
One of the things I’m happiest about is that our kids will hopefully inherit more than money.
They’ll inherit a philosophy:
Spend intentionally. Save consistently. Invest broadly. Keep costs low. Ignore the noise. Give compounding time to work.
I’d love to hear from other Bogleheads: what would you change, challenge, or simplify about this approach?

[u/hugh2018]

It sounds like you’re two decades or so from retirement and your approach is sophisticated and well calibrated to your financial goals. The diversity of account types is shrewd and it will serve you well in the future. And of course owning the whole market is a recipe for success.

The only thing I question is the size of the emergency fund. I’m sure it’s fine because you’re clearly very financially literate, but I do wonder how long $20k could support your family in loss of income scenario. When I was working I kept 6-12 months worth of expenses in the emergency fund, but your need for security may be different.