How do you guys have your 401k allocated? I'm pretty heavy in the S&P 500 as I feel like its a historically good option so I go with 50% S&P, then a mix of target retirement, small/mid cap, international, and company stock.
Retirement Targets
- Thread starter yowza
- Start date
The company stock kicked the hell out of me when my employer failed.
Just a heads up.
Doing my best to not think about how I'm limited to garbage actively managed American Century funds
Your health will determine the quality of your retirement years and the length of your retirement much more than the money you have. And the money you have saved and invested wisely will impact the quality and length of your retirement a tremendous amount. Its a hard truth that some people need to hear. However, both saving for retirement and improving/taking care of your health can be looked at with the the old adage: The best time to plant a tree was 20 years ago. The second best time is now.
Mine is set to approximate the total US stock market with S&P, small cap, and mid cap funds. 100% equities at this point.
For my 401k, I keep it in a S&P 500 index fund. Generally the options suck in a 401k, so I just pick a broad, low cost fund.
In my IRA's, I invest in dividend aristocrat stocks in addition to some international etfs, and bond etfs.
From 20-32 years old I thought I was some kind of investing genius. I had a mix of about 15 different funds (most having high costs). Who knows how I did overall but I promise you that it was worse than the S&P500. The good things is that I didn't have a lot to lose.
At around 32, I heard about people going 100% S&P500 and its advantages. I went 80% S&P500, 10% employee stock, and 10% Reit. A few years later I went 90% S&P500, 10% Reit.
At around 47-Now, I went 90% Retirement Fund 2030 and 10% Reit. I'm currently in the 3rd month of waiting to get out of the Reit position. I thought the 2030 fund would provide a little more protection with it's bond allocation, it hasn't.
I have 50% in the Total US Stock market index, 30% in Total International Stock market index, and 20% in the US Total Bond fund. It is simple, easy to maintain, and low cost.
Target retirement funds will have a large percentage already in the SP500, so I would not bother having both. Either pick a target retirement fund that matches your desired allocation, or create your own like I did above. With the total stock market fund, you get large, mid and small cap all in one. FYI, the S&P500 is approximately 75% of the Total US market.
Usually, you are correct. Bond prices tend to not be correlated with stock prices, so they tend to act like ballast during downturns in the stock market. This last downturn was a bit of an exception to the norm, as the bond fund prices went down (due to high inflation) at the same time as the stock market downturn.
Roughly:
25% SP500
25% US Mid/Small
20% Intl Large
15% Intl Mid/Small/Emerging
10% REIT
5% Bonds
I am 51, so still 5+ years til retirement. Probably too aggressive. Bonds finally fallen enough to start buying them; for the last 10 years made no sense to buy bonds at 0.1% coupon.
Most people I talk to don't put enough in international; decent level of diversification. Nothing provides as much diversification as REITs; just can't overdo it on a single sector though.
I was leaning towards that. Was curious about their non taxable ones too. I don’t suppose you’ve messed with those have ya? I should just park in SWVXX and call it a day
Yes, you need to at least look into this option. A relative of mine retired before 65, and his company allowed him to keep his health insurance in retirement. However, the cost was around $1,000 per month. He looked into an ACA plan and discovered that he could get a Silver plan for around $150 per month. The plan does have a $5,000 deductible versus $1,000 for his employer plan. However, the premium savings of $10,200 per year more than offsets.
With that high of a deductible you should still be able to contribute to a HSA until you're covered by Medicare as well
I would recommend that the following allocation:
60% Large Cap;
30% Mid/Small Cap;
10% International
I would go 100 percent in equities/stocks until your are at least 10 years from retirement. At that point, you could back off and start investing some in fixed income if you want, but always have at least 60 percent in stocks. I personally kept 100 percent in stocks right up to retirement and continue to do so because I have enough to handle a bear market and won’t panic when another inevitably comes.
As far as fund types, I recommend passive funds, such as the S&P 500, versus activity managed funds, such as Fidelity Contrafund. Also, make sure your equity portion is a mixture of growth and value funds. These investment styles do not move in tandem. Large cap growth trounced large-cap value for 10 years right up until the most recent downturn. Some funds are a blend of growth and value, such as the S&P 500.
In order to implement this strategy, list all the funds are are currently invested in along with there balances. This will allow you to see your current percentages/allocations and make tweaks if necessary. As far as company stock, I would either pass completely or go up to 5 percent if you feel real strongly about its prospects.
Thanks. My family deductible is $4K. Next year I will have about $10K in rental income and maybe $15K in SSI (wife is deceased and can claim part of her SSI, I beleive), so it won't be alll brokerage money. I basically took the company plan because it was easy and they paid January.
Yes, I strongly recommend people with high-deductible plans through their employer contribute to an HSA. However, if you get a high-deductible ACA plan, I don’t think you allowed to contribute to an HSA. Others can correct me if I am mistaken.
