54 years old, DW is 51
Total Retirement Portfolio is 785K and DW has a pension that, assuming she works until 64 or 65 will pay about 1800 / month. I try not to even think about the pension, it's going to be our gravy (for lack of a better term).
Emergency Fund: Adequate (3 months) both of our jobs seem to be very secure
Only debt is a mortgage at 4.875% (377K). Home value is conservatively 520K.
We have a 12 y/o and currently 75K in her 529. Grandparents will likely contribute a bit more and based on current contribution levels would anticipate 125K (conservatively) in the 529 when college starts.
We essentially have a portfolio that looks like this:
33% of our portfolio is in VTTXH (VG 2035 Target Date)
9.6% in VFIAX (VG Index)
3.5% in VSGAX (VG small cap growth)
25% in FXAIX (Fidelity 500 Index)*
5.8% in FSMAX (Fido Extended Market)*
6.4% in FSGGX (Fido International)*
4.6% in FSNAX (Fido Bond Fund)*
*The 4 funds with the asterisks above are in my 401K and receive the vast majority of contributions going forward.
1.4% in TIAA Trad
0.5% in TIAA RE
2.4% in CREF Stock
1.4% in CREF Growth
0.8% in CREF Global
1.2% in CREF Equity Index
1.4% in a combination of TSLA and F (Ford)
0.6% in VTI
1.4% Cash (Mostly in VG MM earning 5.27%)
0.76% in NC Large Cap Index Fund which shows an ER at 0.016%
I didn't post ER's, the VG and Fido ER's are very low and TIAA is what it is, we aren't moving out of TIAA. In short, ER's are not a concern. Most everything but the individual stocks and Cash is in tax deferred. I do have a Roth IRA and Roth 401K, but the amounts in them are miniscule.
Current combined salary is 170K (we both work). I make more, and should be close to maxing the 30.5K tax advantaged 401K space. My employer is pretty generous and I get 3% match @ 100% and 12% profit sharing (so total of 15% of salary). My wife is a state employee and 6% of her salary goes to the state pension plan. We are putting 7% into her 457B, but this is fairly recent.
So, here's my question ... If you add all the above up, my AA is 82% stock / 14% Bonds / 4% Other (mostly cash).
I've always been pretty risk tolerant, but I'm starting to get queasy about being so equity heavy. It's never bothered me before, but I'd like to retire in 8-10 years, my wife would likely work at least a year or two past me (maybe more) and a significant downturn would hurt. That said, I have some time to ride things out. I recently upped my bond allocation in my 401K slightly for future contributions, which made me feel better, but I think that was primarily because I think interest rates are going to start to fall. It's also something that will barely move the needle.
I'm also cognizant of the last market disaster in which bonds failed to be a ballast. Sure, they fell slightly less than stocks, but it was pretty ugly. So, I'm not sure where the safe haven is. I could look into allocating more to TIAA Trad, which is guaranteed not to lose money, but I can only reallocate the funds that are already in those accounts, we can't contribute more.
Second Question: For calculation purposes, what is a reasonable rate of return to use for the next 8-10 years ... I realize it's a crap shoot, the market could tank, or it could go gangbusters. My historical rate of return is 8.5%.
I guess I'm starting on a period of uncertainty for me. I've always been comfortable with a pretty aggressive risk tolerance, but the time horizon is getting shorter. Plus, I'm not in a position where I have so much money it doesn't matter much; I need to both protect and grow. If there is a big downturn, I'm confident i won't panic, I might have to live with working longer, but I won't panic. That said, it would be really painful if the market took a 30+ percent nosedive.
So, I guess ultimately, the question is about AA. Do I take some steps to get immediately more conservative, should I just up my bond allocation in my 401K drastically, should I look into moving money in TIAA to up our investments in TIAA Traditional drastically? Or should I stay the course, which has worked quite well for us. 1/3 of the portfolio is in a 2035 Target date, which will get more conservative. That said, almost all of my investments going forward are going into Fidelity 401K and nothing into the VG Target date fund.
Total Retirement Portfolio is 785K and DW has a pension that, assuming she works until 64 or 65 will pay about 1800 / month. I try not to even think about the pension, it's going to be our gravy (for lack of a better term).
Emergency Fund: Adequate (3 months) both of our jobs seem to be very secure
Only debt is a mortgage at 4.875% (377K). Home value is conservatively 520K.
We have a 12 y/o and currently 75K in her 529. Grandparents will likely contribute a bit more and based on current contribution levels would anticipate 125K (conservatively) in the 529 when college starts.
We essentially have a portfolio that looks like this:
33% of our portfolio is in VTTXH (VG 2035 Target Date)
9.6% in VFIAX (VG Index)
3.5% in VSGAX (VG small cap growth)
25% in FXAIX (Fidelity 500 Index)*
5.8% in FSMAX (Fido Extended Market)*
6.4% in FSGGX (Fido International)*
4.6% in FSNAX (Fido Bond Fund)*
*The 4 funds with the asterisks above are in my 401K and receive the vast majority of contributions going forward.
1.4% in TIAA Trad
0.5% in TIAA RE
2.4% in CREF Stock
1.4% in CREF Growth
0.8% in CREF Global
1.2% in CREF Equity Index
1.4% in a combination of TSLA and F (Ford)
0.6% in VTI
1.4% Cash (Mostly in VG MM earning 5.27%)
0.76% in NC Large Cap Index Fund which shows an ER at 0.016%
I didn't post ER's, the VG and Fido ER's are very low and TIAA is what it is, we aren't moving out of TIAA. In short, ER's are not a concern. Most everything but the individual stocks and Cash is in tax deferred. I do have a Roth IRA and Roth 401K, but the amounts in them are miniscule.
Current combined salary is 170K (we both work). I make more, and should be close to maxing the 30.5K tax advantaged 401K space. My employer is pretty generous and I get 3% match @ 100% and 12% profit sharing (so total of 15% of salary). My wife is a state employee and 6% of her salary goes to the state pension plan. We are putting 7% into her 457B, but this is fairly recent.
So, here's my question ... If you add all the above up, my AA is 82% stock / 14% Bonds / 4% Other (mostly cash).
I've always been pretty risk tolerant, but I'm starting to get queasy about being so equity heavy. It's never bothered me before, but I'd like to retire in 8-10 years, my wife would likely work at least a year or two past me (maybe more) and a significant downturn would hurt. That said, I have some time to ride things out. I recently upped my bond allocation in my 401K slightly for future contributions, which made me feel better, but I think that was primarily because I think interest rates are going to start to fall. It's also something that will barely move the needle.
I'm also cognizant of the last market disaster in which bonds failed to be a ballast. Sure, they fell slightly less than stocks, but it was pretty ugly. So, I'm not sure where the safe haven is. I could look into allocating more to TIAA Trad, which is guaranteed not to lose money, but I can only reallocate the funds that are already in those accounts, we can't contribute more.
Second Question: For calculation purposes, what is a reasonable rate of return to use for the next 8-10 years ... I realize it's a crap shoot, the market could tank, or it could go gangbusters. My historical rate of return is 8.5%.
I guess I'm starting on a period of uncertainty for me. I've always been comfortable with a pretty aggressive risk tolerance, but the time horizon is getting shorter. Plus, I'm not in a position where I have so much money it doesn't matter much; I need to both protect and grow. If there is a big downturn, I'm confident i won't panic, I might have to live with working longer, but I won't panic. That said, it would be really painful if the market took a 30+ percent nosedive.
So, I guess ultimately, the question is about AA. Do I take some steps to get immediately more conservative, should I just up my bond allocation in my 401K drastically, should I look into moving money in TIAA to up our investments in TIAA Traditional drastically? Or should I stay the course, which has worked quite well for us. 1/3 of the portfolio is in a 2035 Target date, which will get more conservative. That said, almost all of my investments going forward are going into Fidelity 401K and nothing into the VG Target date fund.
Statistics: Posted by Money_Badger — Sat Mar 02, 2024 11:32 pm — Replies 3 — Views 537