401k Alloc & Investment Advice

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Hachkc
Posts: 3
Joined: Tue Mar 12, 2019 10:44 pm

401k Alloc & Investment Advice

Post by Hachkc » Sun Apr 14, 2019 11:59 am

Relatively new to BH and looking for some feedback regarding current retirement portfolio and the asset allocation based on years till retirement. This is only mine as I'm married but it accounts for about 65% of total retirement balance, spouse is other 35%. Just looking for general advice regarding mine for now.

Background
Age: 55 (plan on retiring in 5-8yrs), Spouse 49 (retiring in 10yrs)
Tax Rate: 32% Fed, 4.25% MI
Tax Status: MFJ (1 dep, in college, fully funded)

Trad 401k (65% of total retirement portfolio)
10% - Dodge & Cox Stock Fund-DODGX - 0.380
10% - MFS International Growth-MIGFT - 0.520
25% - Vanguard Instl 500 Index Trust-VGINT - 0.010
20% - Vanguard Instl Extended Market-VGIET - 0.020
25% - Western Asset Core Bond Class IS-WASCX - 0.450
10% - Vanguard Inflation Protection-VIPIX - 0.070

Small Pension (frozen years back, not included in 65% number above)
At 60, worth 200k lumpsum or 700-1000/mo depending on distribution options

A few other comments, the 401k is mostly been hands off till last year and I just recently re-balanced to the numbers above (65/35). Here are some other investments options I have been considering swapping to.

Replace MFS International. with Vanguard Institutional Total International Stock Market Index Trust (0.06). This seems like a no brainer based on ER but hard to find details on some of these institutional funds.

Vanguard Institutional Total Bond Market Index Trust (0.03) is an option and seems well liked here but returns seem poor and wondering if WACSX+VIPIX is kind of a better approach given split above

Given years to retirement, do you think 50/50 is probably a better target than the 65/35? Given our incomes, we are probably underfunded by 2-3x salary. We are not going to starve or anything like that but retirement will need to be more frugal barring a few big years in the market.

Thoughts?

All funds available below.
//imgur.com/RBSf6WP
Image

delamer
Posts: 7493
Joined: Tue Feb 08, 2011 6:13 pm

Re: 401k Alloc & Investment Advice

Post by delamer » Sun Apr 14, 2019 12:49 pm

Always go for the lower ER, index fund over the higher ER, managed fund.

Words to live by. :happy

If I was a bit behind in retirement savings, I would use the more aggressive position of 65/35.

But only if I knew 1) I wouldn’t panic and sell low in the event of a stock market downturn and 2) that I had basic expenses (housing, food, medical) covered by Social Security/pensions and some cash/short-term bonds.

Remember that even at retirement, you are still investing for (hopefully) at 25 to 30 year horizon.

Dottie57
Posts: 5736
Joined: Thu May 19, 2016 5:43 pm

Re: 401k Alloc & Investment Advice

Post by Dottie57 » Sun Apr 14, 2019 1:02 pm

Vanguard Institutional funds are just a better ER than Admiral shares because the 401k has more invested. Institutional is never shown under the single investor funds.

I don’t know how much you have invested and how it fits with SS. If preservation of investment (ups and downs smaller) then 50/50 is great AA.

P.S. The more complete your picture of finances is, the better the advice.

Post Reply