At what age... [do you change investments]

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rzk96
Posts: 65
Joined: Sat Apr 15, 2017 9:59 pm

At what age... [do you change investments]

Post by rzk96 » Fri May 19, 2017 8:47 am

Hey All -
Been posting on here a little. Helped me lots with great info! Now that I've got my stuff in order: I had a simple question. At what age do you change funds (ie to bonds, income funds, emerging markets, small/big caps, automatic dividends etc) around in your taxable accounts/401k/etc? I am 27 years old. Plan to work till 50s. I want to enjoy my life and not work till 70 :)

What I have now as a 27 year old investment wise:
401k - 43k (Vanguard Target Fund 2050)
Roth IRA - 11k (Vanguard Target Fund 2050)
Vanguard Taxable Account: $1,600 (mostly VTI and some VXUS)
Fidelty Taxable Account:(JUST STARTED THIS 2 DAYS AGO!): $1,000 (ITOT.. will buy some International Stock slowly)

The amount in ALL of my accounts changes monthly/yearly since I do add more monies in the accounts/max out my retirement funds

I keep reading on here about people changing their investments at a certain age OR keeping the same their entire lives... I am so new that I'd like ya'll's opinion on what age to change/WHAT to change the investments to (Like bonds, income funds, automatic dividends etc)/or keep what I have now for all eternity, haha.

CoAndy
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Re: At what age...

Post by CoAndy » Fri May 19, 2017 8:49 am

Those Target Retirement Funds do all the "moving for you". When you get a chance, pull up Morningstar or go to Vanguards web site and look at the asset allocations of the various Target date Funds. You will see they increase bond holdings as you get closer to the date and decrease equity exposure.

rzk96
Posts: 65
Joined: Sat Apr 15, 2017 9:59 pm

Re: At what age...

Post by rzk96 » Fri May 19, 2017 8:51 am

CoAndy wrote:Those Target Retirement Funds do all the "moving for you". When you get a chance, pull up Morningstar or go to Vanguards web site and look at the asset allocations of the various Target date Funds. You will see they increase bond holdings as you get closer to the date and decrease equity exposure.
I wonder if their changing of stocks/bonds is what most people follow? I guess I've read so many people's posts on what they have... I forgot to read up on Morningstar. Thank you!!

rkhusky
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Re: At what age... [do you change investments]

Post by rkhusky » Fri May 19, 2017 8:54 am

Why do you have tiny amounts in both Vanguard and Fidelity accounts?

bloom2708
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Re: At what age... [do you change investments]

Post by bloom2708 » Fri May 19, 2017 8:55 am

Save more. Your funds look good. The Target Date funds will move for you.

Why start a Fidelity taxable account when you have a Vanguard taxable?

One key is to avoid thinking that buying something else will give you "more" return. If you have Total US and Total International, you have great diversification. Buy more of the funds you have. Buying "other" funds is overlap/duplication/tilting.

Any time you get an "itch" to buy something, get a stock tip, have a friend tell you something, buy more Total US and Total International.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

rzk96
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Joined: Sat Apr 15, 2017 9:59 pm

Re: At what age... [do you change investments]

Post by rzk96 » Fri May 19, 2017 8:58 am

rkhusky wrote:Why do you have tiny amounts in both Vanguard and Fidelity accounts?
I am very new at investing. Started like 6 months ago. I add monthly now.

keystone
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Re: At what age... [do you change investments]

Post by keystone » Fri May 19, 2017 9:00 am

rzk96 wrote: I keep reading on here about people changing their investments at a certain age OR keeping the same their entire lives... I am so new that I'd like ya'll's opinion on what age to change/WHAT to change the investments to (Like bonds, income funds, automatic dividends etc)/or keep what I have now for all eternity, haha.

It really comes down to a personal choice that only you can figure out for yourself. Having said that, for someone in their 20's a stock allocation in retirement accounts of 90 or even 100% is going to be suitable for a lot of people. I don't think you can go wrong with the 2050 funds at this point.

livesoft
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Re: At what age... [do you change investments]

Post by livesoft » Fri May 19, 2017 9:00 am

I changed investment percentages (changed my asset allocation) based not on age, but based on big life events like marriage, having children, retiring.
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rzk96
Posts: 65
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Re: At what age... [do you change investments]

Post by rzk96 » Fri May 19, 2017 9:00 am

bloom2708 wrote:Save more. Your funds look good. The Target Date funds will move for you.

Why start a Fidelity taxable account when you have a Vanguard taxable?

One key is to avoid thinking that buying something else will give you "more" return. If you have Total US and Total International, you have great diversification. Buy more of the funds you have. Buying "other" funds is overlap/duplication/tilting.

Any time you get an "itch" to buy something, get a stock tip, have a friend tell you something, buy more Total US and Total International.
Oh just wanted 1 more nest egg. My other post also asked this too. It's under "how many firms do you use". Since I use VG for everything - I just wanted 1 other firm just in case.

ray333
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Re: At what age... [do you change investments]

Post by ray333 » Fri May 19, 2017 9:07 am

"Just in case" what?

You're better off having a higher balance in 1 account - diversify within the account

I prefer simplicity in its, dare I say, simplest form

rzk96
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Re: At what age... [do you change investments]

Post by rzk96 » Fri May 19, 2017 9:09 am

ray333 wrote:"Just in case" what?

You're better off having a higher balance in 1 account - diversify within the account

I prefer simplicity in its, dare I say, simplest form
If something happens to VG. It's a lame excuse. But some of the opinions I read made sense to me in my other post.

dbr
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Re: At what age... [do you change investments]

Post by dbr » Fri May 19, 2017 9:15 am

rzk96 wrote:
I keep reading on here about people changing their investments at a certain age OR keeping the same their entire lives... I am so new that I'd like ya'll's opinion on what age to change/WHAT to change the investments to (Like bonds, income funds, automatic dividends etc)/or keep what I have now for all eternity, haha.
You change your asset allocation to keep pace with changes in personal circumstances while following a method of need/ability/willingness to take risk. By changing the asset allocation I mean the risk and return prospects driven by stock/bond ratio. I don't think there is ever a reason to change what you are invested in such as income funds or funds other than diversified broad market index funds. Automatic dividends I don't understand what you mean. Possibly one exception is that retirees who see that they are especially at risk to inflation might be putting more and more of their bond allocation in TIPS rather than nominal bonds. Finally, some situations might suggest annuitizing rather than withdrawing entirely only from an investment portfolio.

Grt2bOutdoors
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Re: At what age... [do you change investments]

Post by Grt2bOutdoors » Fri May 19, 2017 9:18 am

rzk96 wrote:
ray333 wrote:"Just in case" what?

You're better off having a higher balance in 1 account - diversify within the account

I prefer simplicity in its, dare I say, simplest form
If something happens to VG. It's a lame excuse. But some of the opinions I read made sense to me in my other post.
Be worried if something happens to the securities markets. Do not worry about Vanguard, Fidelity or any other large provider.

Change asset allocation based on ability, willingness and need to accept risk. If you don't understand what that means or want to learn more, google Larry Swedroe and read his posts on ETF.com and Seeking Alpha. The more you read, the more you learn. Come back and ask your questions here.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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whaleknives
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Re: At what age... [do you change investments]

Post by whaleknives » Fri May 19, 2017 9:28 am

John Bogle, on the page opposite his "Simple Rule of Thumb" of age in bonds, also described a more general "Basic Asset Allocation Model (Stocks/Bonds)" of only four splits, from 80/20 for the younger accumulator to 50/50 for the older distributor.
  • "For example, my highest recommended target allocation for stocks would be 80% for younger investors accumulating assets over a long time frame. My lowest target stock allocation, 50%, would apply to older investors in the distribution phase. These investors must give greater weight to the short-run consequences of their actions."
    Bogle on Mutual Funds, 1994
This doesn't require an allocation change but every 10 to 20 years. :)
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."

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