403b asset allocation help

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Joined: Tue May 07, 2013 8:42 am

403b asset allocation help

Postby rcg1977 » Wed May 08, 2013 1:55 pm

I'm looking for some advice on rebalancing and changing my allocation for my 403b plan. Here's my info:

Emergency funds: Yes, 2 months
Debt: credit card ($4500 @ 0%); student loan ($8200 @ 4%); car ($22,000 @ 2.39%)
Tax Filing Status: Married Filing Jointly
Tax Rate: ? % Federal, 3% State
State of Residence: PA
Age: 36
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 25% of stocks

Current 403b holdings (as recommended by a financial planner):

Vanguard High-Yield Fund (VWEHX): 9.47%
Vanguard Inflation-Protected Securities Fund (VIPSX): 8.57%
Vanguard Long-Term Investment-Grade Fund: (VWESX): 9.31%

Vanguard Wellington Fund (VWELX): 15.1%

Vanguard International Explorer Fund (VINEX): 19.49%
Vanguard Selected Value Fund (VASVX): 10.65%
Vanguard Small-Cap Growth Index Fund (VISGX): 11.05%
Vanguard Windsor II Fund (VWNFX): 16.36%

I'm tempted to rebalance (and change future allocations) to a much simpler allocation:

Vanguard Total Stock Mkt Idx: 60%
Vanguard Total Intl Stock Idx: 20%
Vanguard Total Bond Mkt Idx: 20%

Is there any reason why I should stick with the funds I currently hold and not simplify things??

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Re: 403b asset allocation help

Postby Duckie » Wed May 08, 2013 6:35 pm

rcg1977 wrote:Is there any reason why I should stick with the funds I currently hold and not simplify things??

No. The proposed "simpler allocation" is much better and probably a little cheaper.

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Re: 403b asset allocation help

Postby jjustice » Wed May 08, 2013 7:18 pm

Simpler still would be the Life Strategy Growth fund. And they will throw in rebalancing.

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Peter Foley
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Re: 403b asset allocation help

Postby Peter Foley » Thu May 09, 2013 3:53 pm

I would agree that you could simplify. I would suggest keeping the inflation protected securities fund VIPSX just to maintain some inflation protection on the bond side. For me, the three you propose plus the TIPs fund would be my ideal portfolio.

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