How is your IRA/401K retirement allocated?

[Dulanic]

Glad to see I'm not the ONLY person in the vanguard target funds. Honestly, I don't know enough about the markets to really allocate it better myself, so I trust Vanguard to do that for me and it looks like it is pretty well diversified.

Every once in a while I'll dabble in a stock here and there if I feel strongly about it at the time. I hit a nice payday on SIRI, almost wish I hadn't cashed out when I did because it would have been much nicer. But still was happy with overall return.

 

[nk215]

I didn't always have a match available to me and my career basically started with the downturn (~2007/2008). Goal was to be debt free by 30 and I reached that goal.

I have a simple view on how much to save throughout the coming years that doesn't focus as much on X times salary, X money at age Y, etc. I consider that if I can live on 33% or less of my income (after tax) over the next 30 years, then I will have 67% (or more) of my income available to me for the next 30 after retiring, at minimum, without any investment payoffs.

Likely I will still be working after 30 years... but I can't guarantee how long I will live or how good my QOL will be in the future, so I focus on what I can control NOW, and right now I'm really happy.

Debt free at 30 is an amazing effort.

 

[Markbnj]

Vanguard Index fun. 80% Stocks, 20% Bonds. Lowest Expense ratio I could find.

It's doing pretty well.

I have all mine in Vanguard as well. Seems to do well over time.

 

[Gunslinger08]

Roughly 60/30/10 to domestic stocks/international stocks/bonds. I'm a fan of the 3 fund lazy portfolio. Vanguard target year funds are great for that. You can get slightly lower expense ratios if you build them yourself with admiral shares in the constituent funds (or similar - I don't think their bond fund can be purchased by individuals), but it's probably not enough cash to worry about.

 

[ghost recon88]

The 5 year returns on vanguard target funds always seems lower than just building your own portfolio with near the same funds. I think they are skewed a bit too much towards the conservative funds.

 

[overst33r]

Roughly 60/30/10 to domestic stocks/international stocks/bonds. I'm a fan of the 3 fund lazy portfolio. Vanguard target year funds are great for that. You can get slightly lower expense ratios if you build them yourself with admiral shares in the constituent funds (or similar - I don't think their bond fund can be purchased by individuals), but it's probably not enough cash to worry about.

FYI the TR funds are made up of 4 funds, VG added international bonds some time ago.

 

[Tweak155]

Debt free at 30 is an amazing effort.

Can't take all the credit, my wife contributed quite a bit. But she can make the same claim as a 27yo!

 

[xeemzor]

Can't take all the credit, my wife contributed quite a bit. But she can make the same claim as a 27yo!

When I became debt free at 26 it was like a mountain of stress melted away. I finally was in control of my life and didn't owe anyone anything.

 

[Zor Prime]

With a single income that seems a bit high for age 30, but it's good to be optimistic I guess.

Here is how I have my retirement allocated, someone speak up if it's too skewed towards any one thing :hmm:

All through TIAA
50% Large cap fund(s) TRLGX/VINIX
25% Mid/Small cap fund VIEIX
25% Retirement target date fund VFFVX

Here's my TIAA ...

50% traditional,
25% mid-cap value,
25% real estate securities.

The real estate securities just slaughtered this past year.

10.4% rate of return in 2014. Can't bitch too much about that while still being somewhat conservative.

 

[Tweak155]

When I became debt free at 26 it was like a mountain of stress melted away. I finally was in control of my life and didn't owe anyone anything.

Sounds a little dramatic but yeah, I like reducing the number of monthly bills as much as possible. I was never OVERLY stressed but it sucked a little bit to have to manage paying everything, and knowing I was paying extra on top of it.

From a technical standpoint, we were debt free on and off over the years but we were renting. Beginning of last year we bought the house. And from an even more technical stand point, we have 0% debt but only because we choose not to pay it completely, because why would we pay it off? We currently save more in a month than the remainder of it, but a 0% debt doesn't bother me at all like other debts.

 

[Genx87]

I'm in my low 30's. Currently investing 15% of income with a company discretionary match (usually 2-3% every year). Plan to save enough for both my wife and I to retire. She also has a pension that I'm leaving out of my savings calculations entirely. Mortgage currently at 4%, all cc debt from younger less responsible times is transferred back and forth at 0% and minimum payments, one car payment at $150 a month. At current market growth rates, I'm not paying any debt off I don't have to.

At vanguard:
7.31% Vanguard 500 Index Fund Investor Shares (VFINX) 0.17% expense
34.12% Vanguard Extended Market Index Fund Investor Shares (VEXMX) 0.24% expense
36.97% Vanguard PRIMECAP Fund Investor Shares (VPMCX) 0.44% expense
21.60% Vanguard Windsor II Fund Investor Shares (VWNFX) 0.36% expense

At Schwab (current 401k)
I basically chose similar funds.
74.86% Vanguard Primecap ADM VPMAX 0.35% expense
11.22% Vanguard 500 Index ADM VFIAX 0.05% expense
7.10% Vanguard Mid Cap Index ADM VIMAX 0.09% expense
6.81% Vanguard Small Cap Index ADM VSMAX 0.09% expense

Does schwab charge you to buy into those funds? I found some of my Vanguard funds I tried buying into within my 401k at Schwab had ridiculous fees. Like 50-100 per transaction.

 

[jagec]

I love bonds. I am a bond research analyst. I'd be better off financially if more people bought bonds. But how the hell does anybody justify bonds?

Look at "high yield" bonds. Maybe 4-6% yield at this point. Risk spreads are way too rich. Even on the corp side things are too rich.

But nobody who posts they own bonds replies why they own them. I don't think there are that many people here that are 50+.

Bonds are my life but I don't have a single penny in them right now. Nor will I for at least another 15 years.

I'll bite. My wife is much less risk tolerant than I am...when we married and I took over our finances, she had 0% in the stock market. Keeping 20% in bonds will save me a LOT of stress when the market crashes again and our net worth plummets on paper. But yeah, not the most cold-blooded, economically rational decision.

That said, at least we're in the TSP G fund, which won't lose value as rates begin to rise.

 

[NoCreativity]

I'll bite. My wife is much less risk tolerant than I am...when we married and I took over our finances, she had 0% in the stock market. Keeping 20% in bonds will save me a LOT of stress when the market crashes again and our net worth plummets on paper. But yeah, not the most cold-blooded, economically rational decision.

That said, at least we're in the TSP G fund, which won't lose value as rates begin to rise.

Ouch. You've lost out on some solid gains from the S and C funds. But I do understand that everyone has a different level of risk tolerance and you have to go with what you are comfortable with. At least it's made a little money in addition to the matching.

 

[Printer Bandit]

what happens if vanguard goes bust and doesn't exist in 30 yrs? will the invested money be gone too?

 

[JM Aggie08]

Can't take all the credit, my wife contributed quite a bit. But she can make the same claim as a 27yo!

This. My soon to be wife was fortunate enough to not have any student debt. I on the other hand have a decent amount.

I can't help but feel like a burden :\

 

[NikolaeVarius]

Ugh. time to move my money out of Bonds..

 

[Kelvrick]

Does schwab charge you to buy into those funds? I found some of my Vanguard funds I tried buying into within my 401k at Schwab had ridiculous fees. Like 50-100 per transaction.

We don't have any fees to make transactions in our plans. I would assume a partial benefit of having a department that also does investments for clients.

 

[stlc8tr]

what happens if vanguard goes bust and doesn't exist in 30 yrs? will the invested money be gone too?

http://www.bogleheads.org/wiki/Vanguard_safety

 

[dr150]

what happens if vanguard goes bust and doesn't exist in 30 yrs? will the invested money be gone too?

If you elected a margin trading account at Etrade for example, when opening your account, then your money is mixed with the firm's money, so if they go bust, creditors can come after your assets as there's no distinction on the assets.

if you were to have a margin trading account at Lehman, for instance, you would be beyond fucked when they went bust.

That's why it's advisable to not have a margin account on your "rainy day" money account so your money is not mixed with the firm's.

Without a margin account, your assets would stay protected if the firm were to fail.

 

[Engineer]

If you elected a margin trading account at Etrade for example, when opening your account, then your money is mixed with the firm's money, so if they go bust, creditors can come after your assets as there's no distinction on the assets.

if you were to have a margin trading account at Lehman, for instance, you would be beyond fucked when they went bust.

That's why it's advisable to not have a margin account on your "rainy day" money account so your money is not mixed with the firm's.

Without a margin account, your assets would stay protected if the firm were to fail.

Don't ever, ever, ever, ever, ever, ever, ever, ever do margin unless you know 500% what you're doing.....and I mean ever.

My $60,000 warning to you all!

 

[BurnItDwn]

I have everything in stock market indexes.
about 3/8ths in Russell 2000 (small cap)
about 3/8ths in S&P 400 (Mid cap)
about 1/4 in S&P 500 (large cap)
I like the Small caps the best, but they are very high risk, during financial collapse, they tend to lose more, faster, than large caps and mid caps, but, they typically spring back up after the crisis pretty quickly.

 

[zanemoseley]

I decided on a portfolio:

60% VOO (S&P 500 index)
20% VXF (small/mid cap blend)
20% FESGX (international)

The FESGX didn't do that well last year but prior did well so I'm sticking with it but at a lower quantity.

 

[evident]

As high as you can afford?

If you are at 150K by 30 you are doing really well.

I would say that's a very good goal to have, along with being debt free ( minus mortgage)


My Roth IRA right now is

50% VFIFX (Target retirement fund 2050)
50% Vanguard S&P500 admiral fund

I know i need to change it up, but not sure what to change it to.

 

[brianmanahan]

FACT! Very safe without a doubt, but the have no place in somebodys portfolio if you are less than 50. They are not having their money work very well for them by having a bunch of money in bonds.

i am 32 and have %25 bonds

but im gonna retire when im 45, so i guess that makes me 52?

i probably won't ever go any higher than %25 bonds, because my pension should provide 30$k or so per year

 

[NikolaeVarius]

Wait, would it be feasible for me to transfer my bond money to a non bond based Vanguard fund or is it not worth the effort?

I could easily just start putting in 2015 contributions into a brand new fund right and just leave the current fund alone.