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Old 08-20-2019, 10:41 AM
 
7 posts, read 844 times
Reputation: 15

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Hello guys! I've been pretty aggressively risky with my 401K, because I started rather late (age 43). 98% in stocks with a 13% average rate of return since starting (2009) saving 15% of my income with a 2% match.


At what point should I scale down my risk. I keep hearing a recession is coming and I ideally would like to retire by age 60/62. What percentage of bonds/mutual fund is appropriate if I don't want to take a huge risk anymore or should I even change the allocation.


Thanks for your help.
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Old 08-20-2019, 12:03 PM
 
Location: The Berk in Denver, CO USA
14,131 posts, read 20,602,556 times
Reputation: 23045
Start reading a lot over the next year at https://www.bogleheads.org/forum/viewforum.php?f=10
If you do a lot of research, they are kind to newbies.
Another good forum is https://www.early-retirement.org

You have a choice.
1. You can read a lot, learn, and manage your own money. This will cost you about 0.15% of your assets annually.
2. You can hire a financial advisor who will charge you 1% annually. For us, the difference equals a 3-week trip to Europe.
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Old 08-20-2019, 12:29 PM
 
7 posts, read 844 times
Reputation: 15
Quote:
Originally Posted by davebarnes View Post
Start reading a lot over the next year at [URL]https://www.bogleheads.org/forum/viewforum.php?f=10[/URL]
If you do a lot of research, they are kind to newbies.
Another good forum is [URL]https://www.early-retirement.org[/URL]

You have a choice.
1. You can read a lot, learn, and manage your own money. This will cost you about 0.15% of your assets annually.
2. You can hire a financial advisor who will charge you 1% annually. For us, the difference equals a 3-week trip to Europe.

Thanks so much for responding. I started to think I had the dumbest question ever! WOW.....3 weeks vacation to Europe! You're loaded. LOL LOL
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Old 08-20-2019, 12:31 PM
 
11 posts, read 1,817 times
Reputation: 42
This is an interesting chart you will find researching Bogleheads...



I am 52yo and currently 95/5.

I will probably transition to 70/30 as nearing retirement.
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Old 08-20-2019, 12:44 PM
 
7 posts, read 844 times
Reputation: 15
Quote:
Originally Posted by Audie Murphy View Post
This is an interesting chart you will find researching Bogleheads...



I am 52yo and currently 95/5.

I will probably transition to 70/30 as nearing retirement.

Very interesting. Good to know. Yeah, I'm sitting at 98/2 and according to this chart I'm at 50% risk. That's the highest level. I'm not a scary type person. I'm pretty aggressive at most things, but I will scale the stock percentage down.
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Old 08-20-2019, 12:55 PM
 
6,443 posts, read 4,848,247 times
Reputation: 13411
You want to retire in roughly 10 years. After that you should be planning for another 30 plus years in retirement. So you are investing with a 40 year window in mind. To me that means a high stock allocation. As you reach retirement, you might want to drop down to about a 70% allocation. Many people make a major error in being too conservative. This can cost them a huge amount over the decades of retirement.
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Old 08-20-2019, 12:59 PM
 
4,632 posts, read 4,789,745 times
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Do you still have a mortgage? If so, I'd rather be paying off my mortgage than investing in bonds. I'd go 100% stocks in my 401k and pay off my mortgage with what would have been the bond allocation.
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Old 08-20-2019, 01:19 PM
 
Location: Colorado Springs
78 posts, read 12,893 times
Reputation: 334
Quote:
Originally Posted by jrkliny View Post
You want to retire in roughly 10 years. After that you should be planning for another 30 plus years in retirement. So you are investing with a 40 year window in mind. To me that means a high stock allocation. As you reach retirement, you might want to drop down to about a 70% allocation. Many people make a major error in being too conservative. This can cost them a huge amount over the decades of retirement.

I agree.
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Old 08-20-2019, 01:39 PM
 
72,908 posts, read 72,721,455 times
Reputation: 50416
Quote:
Originally Posted by Audie Murphy View Post
This is an interesting chart you will find researching Bogleheads...



I am 52yo and currently 95/5.

I will probably transition to 70/30 as nearing retirement.
2008 was worse. My 60/40 was down in the 35% range
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Old 08-20-2019, 01:40 PM
 
6,443 posts, read 4,848,247 times
Reputation: 13411
Quote:
Originally Posted by mizzourah2006 View Post
Do you still have a mortgage? If so, I'd rather be paying off my mortgage than investing in bonds. I'd go 100% stocks in my 401k and pay off my mortgage with what would have been the bond allocation.
Paying off a mortgage has nothing to do with investing in bonds. If you pay off the mortgage your money is tied up in the house. It may be very slow and difficult to get it back out.
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