I don't think I have any tax implications for quite a while... we'll probably only need rIRAs and tIRAs and/or my 403b.
I've been through just about all the wiki pages, and the reason for my post was that I never had a concrete answer on how to make the AA/rebalancing thing actually happen (new cash in or actually moving $ from one fund/account to another or a combination of both).
I'd really like to set my monthly investing on auto-pilot and periodically rebalance within our rIRAs by transferring funds. Isn't selling from the high side to put into the low side in effect the same thing as adding $ towards the low (assuming my tax/account situation)? I'm pretty sure I read that you can transfer money from one IRA to another as long as it is reinvested before the 60 days is up (I would never take that long...) to avoid the withdraw penalty and taxes.
Again, sorry I'm showing my youthful "spots" when it comes to the nuts and bolts of investing. Just trying to fully understand.
With regard to tax considerations, if you don't have a taxable account, your life gets easier when you rebalance because you have fewer tax issues to worry about.
If the main question you have is about *how* to rebalance, then yes--you have it. You can rebalance either by adding new contributions or rebalance by buying/selling within your accounts.
One thing to think about is the extent to which you'll be able to rebalance if you have to rely on new contributions to do it. This would be especially difficult if you rebalanced when you hit a band, for example. So if you have only one type of fund in each account, rebalancing can be a pain. If it's feasible it's nice to have one account that has sufficient amounts of all of the kinds of funds you have so you can pretty much rebalance just by shifting around the funds in one account.
In my case, I didn't follow a template in a book--I just started with the advice in the wiki pages I linked, then I put paper to pencil and tried to game out all of the different possibilities for how to set up my AA given the array of fund options and accounts I had. Then I figured out a plan for contributions so future deposits would go into the accounts in the same proportion as my AA. It took a number of tries to come up with something that made sense, but eventually I figured it out.
One key is to start with your 403b/401k type plans first since you typically have the fewest fund options with those plans. I identified the few really good funds that our 401ks were offering and started there. Then I went on down the line, trying to arrange everything so I could get Admiral shares whenever possible and put bond funds in a tIRA and international funds in a taxable account. I recommend getting a calculator, a legal pad, a pencil and then just some elbow grease and thinking to work it out.
If I would break it down into steps it would look like:
1. Decide upon asset allocation
2. Get current balances of all investable monies
3. Learn investment options for 401ks
4. Allocate assets per my desired AA by spreading them among 401ks, tIRAs, rIRAs, and taxable accounts.
5. Prioritize picking 401k funds first because 401ks have very limited options for okay funds
6. Once assets in 401k are set, then decide how to allocate left over monies among the various accounts: prioritize making rebalancing easy by splitting largest account into domestic stock, bond, and international funds. Place bond funds into tIRA. Place international funds in taxable account.
7. Once asset allocation is current, figure out how to allocate each month's contributions to match AA as closely as possible. See if it makes sense to have, say, an international fund in my 401k even if it's not an ideal fund--so that each month I can contribute something to the foreign stock part of my AA. So if every month I knew I had a total of $1000 to invest, and I wanted an AA that was 50% domestic stock, 25% int'l stock, and 25% bond, I'd structure each month's automatic contributions so that $500 went to domestic stock funds, $250 went to int'l stock, and $250 to bonds. Then each month I check against my spreadsheet to see how closely I'm tracking my desired AA.
One option when you have considered a number of alternatives is to post in the Help with Individual Investments forum.