What is the best way to allocate 401 K funds for a 31 year old?

**Seeker** · 11-16-2010, 10:32 PM

First off a "target" retirement account refers to the decade (in your case with those funds) nearest when you will be of retirement age which will probablly be mid-to-late-2040 since you are 31 years old and it is 2010 now.

Secondly, if you have no other 401k out there, then that Target Retirement fund would probably be the best to select.

Generally (and I did not look up the specifics on the plans listed), most target funds put together a mixture of stocks/bonds that make sense (to them) for investing long-term for that age group until retirement. They "change" the mixture over time, so 20 years from now, there will be more "safe" investments in the 2040 mix than there should be "risky" investments (ie stocks).

You need to research, and determine how much risk you are willing to take with your 401k.

**jIM_Ohio** · 11-17-2010, 03:46 AM

the easy and simple choice is this

SSgA Target Retirement 2050

Or you could research and learn more and do something like this

20% S & P 500 Index Fund
20% Large Cap Equity Fund
30% Small Cap Equity Fund
25% International Equity Fund
5% Company Stock Fund
Stable Value Fund
Bond Market Fund

Before you choose those percentages, you need to ask why... and then do some homework. You need to know the risks of each, and know why those risks go down as time passes, and risks go down as you invest in other things.

If you do the second choice, expect to see +30% returns one year then -10% the next year. If wild swings like that bother you, take advice from someone else.

**fiscallyprudent** · 11-18-2010, 11:45 PM

grab a copy of the CoffeeHouse Investor or The intelligent investor. They're easy reads and they are the answer to the question you just ask.

What is the best way to allocate 401 K funds for a 31 year old?