Inspired by Mrs. Micah's financial confession, I confessed that I needed to rebalance my almost 50K in retirement funds. Clearly, Fidelity 2050 and Vanguard 2050 are just not aggressive enough for me.
The problem. All of that money is in a billion different accounts! We have old his and hers ROTH IRAs & Rollover IRAs. The active accounts are a SEP-IRA (his) and a 401K (mine). Whew.
One of the rollovers and the SEP have less than 1K in them. This makes reallocation really difficult. The largest account, the 401K, also has the most limited options, and it will continue to grow the fastest. Yikes! How am I going to rebalance that?
I decided to make my 401K about 2/3 international, and make it all international going forward. That will continue to make my portfolio more and more international. As for the rest, well, ugh.
I went to Jonathan's portfolio. He also has a lot of model portfolios from various books and such. I just stole his categories and added mid cap because I have a good mid cap fund in my 401K. I got rid of the bonds, that left me with these categories, and these rough percents. I wrote down what I want ideally, though I knew this would not happen with my strange account balances and choice. I had to break out a pencil I revised this so much.
US Total (large cap) 25%
Mid Cap 15%
Small Cap 15%
REIT 5%
International 20%
International - Emerging 20%
Off to a good start!
1 comments:
Actually, it doesn't sound like you have all that many accounts. My husband and I have just as many. You and your fiance will always have separate accounts because you cannot have combined retirement accounts. You'll also have accounts from current and past employer-sponsored plans. Unless you convert your rollover IRAs to Roth IRAs (and I think you earn too much to be able to do that), those will always be separate, too. What you can do is have one rollover IRA apiece and each time you leave an employer, rollover the 401(k) from the company you're leaving into that IRA. I think my rollover IRA has funds from three different 401(k)s in it.
Barb1954
p.s. Having 40% or more in international funds is higher than financial advisors usually suggest. I think the allocation for international is usually about 15-20%. Fidelity and other companies have online calculators to help you figure out asset allocations based on your risk tolerance. You might want to give them a try.
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