How is your IRA/401K retirement allocated?

[NikolaeVarius]

What's a good retirement account balance to shoot for by time you are 30? ~150k?

Should be doable.

I'm 23 and I've paid about 20k into my student loans in the past year. Once I pay it off next year, hopefully I will take that money and put it into investments. 150k should be viable by the time I'm 30.

 

[Herr Kutz]

100% vfiax

 

[Nograts]

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

I'm not at home to x-ray these but I bet your VFFVX is overlapping quite a bit into your other funds.

 

[Engineer]

As high as you can afford?

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

100% this.

(even if it's substandard based on ATOT standards).

Don't recall how much I had at 30. I watched it drop by that much or more in 2008 though (64%). Talk about a tough time. Just keep in mind youngsters, WHEN it drops, it typically does go back up (always has but history is no guarantee). The NASDAQ just now hit where it was in 1999 (and I think it's too high now). The key is to keep on keeping on. It takes time to build wealth.

 

[ghost recon88]

I'm not at home to x-ray these but I bet your VFFVX is overlapping quite a bit into your other funds.

Maybe so, I know it includes both international and domestic stock funds and bond funds. The VINIX (one of the large caps) basically replicates the S&P 500, the other one (TRLGX) has been on a tear this year at already over 7%.

I figure adding the mid/small cap fund just helps give me more diversity.

 

[xeemzor]

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

It's tough but doable. I lived at home for 3 years so I could pay off student loans and max out my retirement accounts. For the first year or so I only allocated ~$300/month for myself. Some of my friends drifted away because of how tight my spending was but I'm glad that I did it.

 

[LegendKiller]

Surprised we had to get to the second page before somebody brought this up.

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.

 

[purbeast0]

i just have my stuff in the target retirement funds on vanguard. i think my roth is in the target 2040 and my rollover ira is like the 2045 one.

my 401k i believe i have set to the trowe price 2040 one as well, whatever that is.

 

[xeemzor]

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, exactly, they own them.

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.

Do you feel confident that stocks will continue to grow in value? Where else should one keep money to counteract the volatility of the market?

 

[dave_the_nerd]

It's in a target-date fund. I don't pay attention.

 

[Engineer]

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

Because people tell us to own them (to be diversified). I have at most 5% of bond funds and I doubt it's that much, to be honest considering my other funds have run off and left them, pushing them down even further.

Besides, bonds, for some reason, just confuse the shit out of me (as do options - such as calls, puts, etc).

 

[LegendKiller]

Because people tell us to own them (to be diversified). I have at most 5% of bond funds and I doubt it's that much, to be honest considering my other funds have run off and left them, pushing them down even further.

Besides, bonds, for some reason, just confuse the shit out of me (as do options - such as calls, puts, etc).

Bonds are probably the easiest thing to understand. It's just a PV of future cashflows (P&I) with the discount rate being the current prevailing rate for those types of bonds. Rates (Libor, swaps...etc + risk spread) goes up, discount rate goes up, prices go down.

 

[Dr. Zaus]

Do you feel confident that stocks will continue to grow in value? Where else should one keep money to counteract the volatility of the market?

1) Yes. They are an inflation-adjusting instrument and volatility is not dangerous unless you are playing short-term

2) A different kind of stock: like he mentioned, a non-cyclical stock or counter cyclical stock. Perhaps something that pays out a steady dividend if you want something bond-esque. or, as mentioned, a preferred stock ETF with a strong track record.

 

[Exterous]

Currently:
45% Domestic Index
32% International Index
8% Small Cap
10% REIT
3% Bonds
2% Cash

Surprised we had to get to the second page before somebody brought this up.

noob

 

[Tweak155]

Haven't invested anything into the market yet... I invested in a business a few years back and it is starting to pay off more and more. I took my cash over that period and eliminated all debt... will likely end up "paying" for it in the long run, but having a worry free mind throughout my life is worth whatever I end up losing from not investing earlier.

Going to start up some investments this month... we'll see how it goes.

 

[Engineer]

Haven't invested anything into the market yet... I invested in a business a few years back and it is starting to pay off more and more. I took my cash over that period and eliminated all debt... will likely end up "paying" for it in the long run, but having a worry free mind throughout my life is worth whatever I end up losing from not investing earlier.

Going to start up some investments this month... we'll see how it goes.

I took a hybrid approach to what you did. I made sure to invest enough to get the match (and a little more) but put most of my extra money into paying off debt (interest rates were much higher then - running 7% on mortgages). I was roasted at the time (by many on this forum) but don't regret it for a second. Having my home (all debt actually) paid off at the age of 37 (over 9 years now) has been wonderful. Top it off with the luck that the market tanked during that period allowing me to put more of my previous mortgage money into funds allowing it to grow pretty quickly.

No complaints at this point on that decision.

Also, what are the thoughts on having X times salary at ages throughout life? I just read an article that said that you should have 1X salary in retirement at 35, 3X salary at 45, 5X salary at 55 and 8 times salary at 67 if you want to retire with 85% of your salary for 25 years of retirement. That seems somewhat sensible to me.

http://www.boston.com/businessupdat...-retirement/0XyV8OuLWyT8ZF4RCeq6xN/story.html

Based on those numbers from the article, the OP is in good shape as far as salary amount and age.

 

[jaha2000]

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.

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.

 

[zanejohnson]

i like your name

 

[JM Aggie08]

20% Stock
30% Domestic Index Funds
20% International Index Funds
30% Extended Market ETF

 

[Tweak155]

I took a hybrid approach to what you did. I made sure to invest enough to get the match (and a little more) but put most of my extra money into paying off debt (interest rates were much higher then - running 7% on mortgages). I was roasted at the time (by many on this forum) but don't regret it for a second. Having my home (all debt actually) paid off at the age of 37 (over 9 years now) has been wonderful. Top it off with the luck that the market tanked during that period allowing me to put more of my previous mortgage money into funds allowing it to grow pretty quickly.

No complaints at this point on that decision.

Also, what are the thoughts on having X times salary at ages throughout life? I just read an article that said that you should have 1X salary in retirement at 35, 3X salary at 45, 5X salary at 55 and 8 times salary at 67 if you want to retire with 85% of your salary for 25 years of retirement. That seems somewhat sensible to me.

http://www.boston.com/businessupdat...-retirement/0XyV8OuLWyT8ZF4RCeq6xN/story.html

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.

 

[Engineer]

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.

:thumbsup:

 

[Elbryn]

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.

by that math, 67% * 30 years = 20.1x salary assuming salary stays the same.

personally, i'm still aiming for the stated 4% safe withdrawal rate / 25 x 100% salary at retirement. no ssn. no pension. very likely an annuity of some sort will be purchased to get some guaranteed income.

looking back 2007/2008 was a great investing period for us. we got married, in 2006 and entered the DINK, live on one income, save the entirety of the other, banking a hefty sum for retirement.

 

[Tweak155]

by that math, 67% * 30 years = 20.1x salary assuming salary stays the same.

personally, i'm still aiming for the stated 4% safe withdrawal rate / 25 x 100% salary at retirement. no ssn. no pension. very likely an annuity of some sort will be purchased to get some guaranteed income.

looking back 2007/2008 was a great investing period for us. we got married, in 2006 and entered the DINK, live on one income, save the entirety of the other, banking a hefty sum for retirement.

Similar to the 85% * 25yrs which is 21.25... Only mine is for 30 years so I think I'm ahead on a 25yr scale in comparison. But things are going good right now, I will need other investments to cover my ass which starts this month!

 

[Genx87]

100% this.

(even if it's substandard based on ATOT standards).

Don't recall how much I had at 30. I watched it drop by that much or more in 2008 though (64%). Talk about a tough time. Just keep in mind youngsters, WHEN it drops, it typically does go back up (always has but history is no guarantee). The NASDAQ just now hit where it was in 1999 (and I think it's too high now). The key is to keep on keeping on. It takes time to build wealth.

Absolutely, selling locks in losses. So many people bailed in 08 and ate the losses and set themselves back years. If they just held on they would have recovered all that wealth within a couple years.

 

[Kelvrick]

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