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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.
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.
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
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.
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.
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.
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.
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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