Originally Posted by DaFace:
I'm not following the point of a target date plan if the allocation can be adjusted. If you're doing that, just buy index funds and decide what you actually want.
Maybe it’s the wording but it’s the ability to adjust the asset mix within the fund or rebalancing [Reply]
Originally Posted by Buehler445:
Really? Mine in my IRA doesn’t.
IDK maybe its plan specific but I've adjusted my 2035 target fund asset mix
From a company 401k standpoint, you pick it when you're in your 20s, so 2035 sounds good even though I'll still be in my 50s because what the fuck do I know at 25. So the fund rebalances to market conditions for the target but also allows me to adjust as my life progresses
Maybe I'm misreading the original ask but it sounds like 2035 might not be enough so the choices are managing it yourself or working within your fund, if it allows it, to adjust your asset mix [Reply]
Originally Posted by Wallymo:
I'm 53, and had all my retirement in Schwab's "retirement 2035" account. My son is a business major and went over the individual investments that make up the retirement 2025 account. Turns out that 18% of my retirement investment was in bonds.
At my son's recommendation, I changed my allocation to 100% in Vanguard Institutional Index I ("VINIX"), which tracks the S&P 500.
It's a few days later, and I'm a bit nervous. I've read this string for years, but don't post on it as I don't have the disposable income to make trades for singular stocks. Any advice from the group here? Do you think it was the correct choice? You guys have such a deeper knowledge base than I do. My goal is to have my current account double twice in the next 15 years (which would be boosted by my yearly contribution). That should hopefully be enough for my and my wife's retirement. Based on family history, I'm likely to die before I hit 75 but my wife will live to be 100.
Thanks in advance!
Yeah, you're at the age where you have to minimize the risk to the portfolio. IMO, with these wild swings we're seeing in a scared market, well, it isn't worth taking the chance of another 2008. [Reply]
Originally Posted by GloryDayz:
Yeah, you're at the age where you have to minimize the risk to the portfolio. IMO, with these wild swings we're seeing in a scared market, well, it isn't worth taking the chance of another 2008.
He’ll need to go the stocks route if he wants any hope of doubling his account twice in the next 15 years, though.
He’ll have to get very lucky but I believe he’d need an average of 10% return per year in order to double your investment in 7 years. [Reply]
Originally Posted by GloryDayz:
Yeah, you're at the age where you have to minimize the risk to the portfolio. IMO, with these wild swings we're seeing in a scared market, well, it isn't worth taking the chance of another 2008.
I'd disagree.
He reasonably has a 30 year time horizon. He's at the age where you typically start ratcheting down risk a bit, but 10+ years out from retirement isn't unreasonable to keep risk in the market. [Reply]
Originally Posted by lewdog:
Message is plan sooner, don’t wait and try to play catch-up needing “for sure gains” to meet your needs.
I save planning for 6% return. If we get another lost decade for stocks, 6-8% return is much more likely.
If I get 10% return over next 2 decades, I’ll be so set, but I don’t plan on that.
Agreed.
He also did say that he’s contributing $30k per year to his 401k so I’d imagine that will do a lot of heavy lifting in the effort to double the investment. [Reply]
Hog's Gone Fishin 08-12-2024, 07:47 AM
This message has been deleted by Hog's Gone Fishin.
Reason: Doesn't matter
Originally Posted by ThaVirus:
He’ll need to go the stocks route if he wants any hope of doubling his account twice in the next 15 years, though.
He’ll have to get very lucky but I believe he’d need an average of 10% return per year in order to double your investment in 7 years.
Agree; the risk is too great (IMO) to achieve that in these skittish times and this crazy market.
We all had out formula, mine was to go all out (putting everything I could into the high risk/high-reward retirement options) until ~45, cool it from 45 to 50, even cooler from 50 to 55. It worked very well for me, I was able to retire a couple months after my younger son graduated high school and now I'm traveling the world every other month before I turned 60, and will do it for as long as I can still dive. I've been blessed with good genes, the Mrs. and I stay and live a pretty healthy life, so life is good.
But you're right, this advise is for our younger readers.
I was blessed to have a pretty financially savvy father and early on after I got out of the military I had a boss who sat me down and talked retirement with me - I was in my mid 20s - and it paid off. Later in my career I did the same for my subordinate staff and encouraged the leadership structure under me to do the same. I'd hold a high level "Think about YOUR financial future", and I encouraged the department heads and supervisors under them to incorporate a "YOUR financial future" segment into annual reviews. Over time they became shorter, but new hires, especially younger hires, need to hear what the employer offers in terms of matching, take advantage of it, and the basics of how retirement works. I'm shocked how many kids fresh out of college have little clue about 401Ks and other investment options.
Anyway, I was blessed to make what I made and was able to largely avoid huge damage during times like 2008, so life is good. [Reply]
He reasonably has a 30 year time horizon. He's at the age where you typically start ratcheting down risk a bit, but 10+ years out from retirement isn't unreasonable to keep risk in the market.
I had subordinate staff change their retirement plans because of having too much risk (too much risk) in 2008 and not watching their money closely enough. While none worked for me at the time, but that same happened in 2000/2001. They got greedy.
It's just me, I wasn't going to work into my 60s, there's too much life to live, so I planned accordingly and wasn't going to let a squirrelly market change those plans. Again, that's just me. [Reply]
Originally Posted by GloryDayz:
I had subordinate staff change their retirement plans because of having too much risk (too much risk) in 2008 and not watching their money closely enough. While none worked for me at the time, but that same happened in 2000/2001. They got greedy.
It's just me, I wasn't going to work into my 60s, there's too much life to live, so I planned accordingly and wasn't going to let a squirrelly market change those plans. Again, that's just me.
All that's fair. Everybody has a different risk tolerance. [Reply]
Originally Posted by ThaVirus:
He’ll need to go the stocks route if he wants any hope of doubling his account twice in the next 15 years, though.
He’ll have to get very lucky but I believe he’d need an average of 10% return per year in order to double your investment in 7 years.
Depends a little what the OP includes in doubling his money. He did say he will continue contributing to the fund over this time. So if doubling the money includes the additional dollars being contributed on a regular basis, it would be much easier to double the value of the account at a lower rate of return. Big question is, how much is he continuing to add? Best plan regardless of investment choice would be to continue to contribute as much as you can as soon as you can to give that money time to grow. [Reply]
Originally Posted by lewdog:
Message is plan sooner, don’t wait and try to play catch-up needing “for sure gains” to meet your needs.
That's the message I missed (or, to be honest with myself, ignored). I worked in NYC the first six years of my career ('97-'03) and only put a total of $12k in retirement. That $12k is now worth over $150k. Instead of saving, I lived the full NYC life above my means and racked up so much credit card debt that I only got clear about a decade ago. I kick myself daily for my foolishness, but have made a concerted effort to teach our three kids to emphasize retirement early.
If I'm going to retire at 65, I think I need to take the risk of no bonds. At least for the next 5-8 years. Hope isn't a great plan, but I see no other way to get where we need to be to take care of my wife after I'm gone. [Reply]
For those retired, I'd be interested to hear how and when you came to the realization you could comfortably retire? I'm still about 20 years out, and always fearful I won't have enough money. That being said, the 401k is really starting to grow from the 20+ years of contributions and the online calculators make it appear I'm in good shape. I still don't know how much I trust them. Is the pessimism normal, or did you feel you were in good shape financially years before you actually retired? [Reply]