401k allocation advice

[kvrreddy]

Attached is my current allocation today. I'm 30 years old and with the current market down, i'm planning to make some changes to my portfolio. Can someone advice me on this? I like to reduce my foreign to 10%.

[jpg7n16]

At the time of me writing this response, your allocation wasn't attached - but just as well. There are a few questions I'd need you to answer before I'm able to give you a better answer:

-At what age are you planning to retire? An age range is okay if you don't know exactly.
-How comfortable are you with financial risk? Very uncomfortable, uncomfortable, about normal, comfortable, very comfortable (or somehwere inbetween two of these options)
-What percentage of your income are you saving? Don't consider any employer match for this number
-How much wiggle room is there each month in your budget?


Now you may be asking yourself, why does he need to know about my budget surplus to decide my 401k allocation? Answer: If you have a low risk tolerance, you'll need to put a higher amount away than if you have a high risk tolerance. If you're planning to retire earlier than conventional retirement age, and would like to maintain your risk tolerance, you'd need to contribute even more. My question is seeing if that's an option given your budget.

[paul_btam]

I don't see your attached allocation. I might just not be able to find it, I'm new to the forum.

Anyway, I'm currently using "target retirement" funds in both my 401k and Roth IRA accounts. You pick a fund that matches as closely as possible with your target retirement date. It will then automatically adjust its allocation to be less aggressive as the target date gets closer.

For example, If I plan to retire in 2035, I would pick the "Target Retirement 2035 Fund", or something similarly named. Right now, the investment allocation in that fund will be mostly stocks, few bonds, and probably little to no cash. However, around the year 2030 it will have slowly reduced the stock allocation to around 50% or so, and have much more bond and cash investments. Typically these funds do include some international stocks as well.

Hopefully such things are available in your 401k account.

[kvrreddy]

I'm 30 years old, with single income and my wife stays at home and with the current market down, i'm planning to make some changes to my portfolio. Can someone advice me on this? I like to reduce my foreign to 10%.is this a right choice?

I'm kind of COMFORTABLE taking some risk and i contribute about 12% of paycheck income to 401k.

Sorry, FORUM DIDN'T ALLOW ME TO ATTACH IN MY EARLIER POST. PLEASE SEE MY ALLOCATIONS TODAY,


Bond Investments
Intermediate-
Term
PIMCO TOT RETURN ADM
10%

Bond Investments
Intermediate-
Term
SPTN US BOND IDX INV
5%

Bond Investments
Stable Value
FID MGD INC PORT II
5%

Stock Investments
Large Cap
Growth
AF GRTH FUND AMER R4
10%

Stock Investments
Large Cap Blend
SPTN 500 INDEX INV
10%

Stock Investments
Large Cap Value
VANG WINDSOR II ADM
5%

Stock Investments
Mid-Cap Growth
COLUMBIA ACORN A
5%

Stock Investments
Mid-Cap Blend
VANG MIDCAP IDX INST
5%

Stock Investments
Small Cap Blend
ICM SM CO INST
5%

Stock Investments
Small Cap Blend
VANG SM CAP IDX SIG
0%

Stock Investments
Foreign
AF EUROPAC GRTH R4
20%

Stock Investments
Foreign

SPTN INTL INDEX INV
view restriction(s)
20%

Blended Fund Investments
Asset Allocation
BTC LIFEPATH 2020 S
0%

Blended Fund Investments
Asset Allocation
BTC LIFEPATH 2030 S
0%

Blended Fund Investments
Asset Allocation
BTC LIFEPATH 2040 S
0%

Blended Fund Investments
Asset Allocation
BTC LIFEPATH 2045 S
0%

Blended Fund Investments
Asset Allocation
BTC LIFEPATH 2050 S
0%

Blended Fund Investments
Asset Allocation
BTC LIFEPATH RET S
0%

Blended Fund Investments
Asset Allocation
VANG STAR
0%

Thanks in advance, VJ

[jpg7n16]

Well, let's make that a little more readable:

Bonds: 20%
Large cap: 25%
Mid cap: 10%
Small cap: 5%
Foreign: 40%

I think you are very overweighted in foreign, and overweighted in bonds.

I think I'd do something like:

Bonds: 10%
Large cap: 30%
Mid cap: 20%
Small cap: 15%
Foreign: 25%

This would still keep it fairly risky, but not max out the risk factor. I'd also look to slowly raise your contribution up to 15-20% over the next few years.

Hope this helps!

<PS - you can just reply to this thread, there are two 'Post Reply' buttons, one at the top left of the posts, and one at the bottom left of the posts. This would save you from having to create a new thread every time.>

[LMA]

I agree with JPG but I would do a bit more foreign, like 35%. You are young and you should be on the aggresive side. Just because Europe is tanking now does not mean you should stay away from Foreign. You got 20+ years of investing ahead of you and with the reshaping of the US economy there is a good chance that you will see more growth outside of the US in the coming years.

[bjl584]

Originally Posted by LMA

I agree with JPG but I would do a bit more foreign, like 35%. You are young and you should be on the aggresive side. Just because Europe is tanking now does not mean you should stay away from Foreign. You got 20+ years of investing ahead of you and with the reshaping of the US economy there is a good chance that you will see more growth outside of the US in the coming years.

Just a side note:

Foreign doesn't necessarily mean Europe. It usually includes emerging markets in Asia.

[ez1]

Lots of good advice in this thread already. I just wanted to point out one of my favorite asset allocation tools is at Bankrate.com