Is this a reasonable allocation for early 30s

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Linkin06
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Joined: Wed Jun 12, 2019 2:31 pm

Is this a reasonable allocation for early 30s

Post by Linkin06 » Sat Nov 09, 2019 11:08 am

My employer has options for target funds, but fees are pretty high at 0.5-6%. They do have lower vanguard indexes that I tried to use to recreate a target fund. Is this a reasonable allocation for early 30s, just starting off in career and looking to bank 200k a year for several years to get a cushion.


Vngrd 500 Indx 45.41%
Vngrd Ttl Intl Stck Indx 36%
Vngrd Midcp Indx 6.7%
Vncrd Smcp Indx 1.89%
Vngrd Intmd Trem Bond Indx 10%

Chris K Jones
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Re: Is this a reasonable allocation for early 30s

Post by Chris K Jones » Sat Nov 09, 2019 11:25 am

I think 90 % stocks, 10% bonds is fine for your age. 40% international is ok but more than I would do. I would personally drop the mid and small cap funds and just bump up the SP500 percentage to 54%. They aren't gonna have much of an effect. I like simplicity. What is left is a 3 fund portfolio which is always a good idea. Best wishes.

clammyhands
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Re: Is this a reasonable allocation for early 30s

Post by clammyhands » Sat Nov 09, 2019 12:53 pm

So they have a Total International Stock index fund, but no Total Stock Market Index funds (US VTSAX) that you can use instead of splitting between 500, MC, and SC?

I personally would do something like VTWAX (Total World Stock Market) for the equity portion, and either Total World Bond or Total Bond (US) for the bond portion.

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Wiggums
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Re: Is this a reasonable allocation for early 30s

Post by Wiggums » Sat Nov 09, 2019 1:39 pm

Chris K Jones wrote:
Sat Nov 09, 2019 11:25 am
I think 90 % stocks, 10% bonds is fine for your age. 40% international is ok but more than I would do. I would personally drop the mid and small cap funds and just bump up the SP500 percentage to 54%. They aren't gonna have much of an effect. I like simplicity. What is left is a 3 fund portfolio which is always a good idea. Best wishes.
This is pretty much what I would do as well. Anything less that 5% is not gonna make much difference.

You could consider taking ten percent from international and move to small and mid caps if you want to keep them.

If we had your list of funds with the ER, that would help.

KyleAAA
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Re: Is this a reasonable allocation for early 30s

Post by KyleAAA » Sat Nov 09, 2019 2:17 pm

Reasonable, but anything less than 5% isn’t worth bothering with IMO. Just bump up the small cap a bit if you want to own it.

Topic Author
Linkin06
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Joined: Wed Jun 12, 2019 2:31 pm

Re: Is this a reasonable allocation for early 30s

Post by Linkin06 » Sat Nov 09, 2019 6:33 pm

Yes, these are the options they give me I sorted from lowest to highest ER. I don't have a total market for some reason, so that's why i tried to make a mix of small and madcap. with the 500.

VFIAX Vngrd 500 Indx 0.04
VIMAX Vngrd Midcp Indx 0.05
VSMAX Vngrd Smcp Indx 0.05
VBILX Vngrd Intmd Trem Bond Indx 0.07
VTIAX Vngrd Ttl Intl Stck Indx 0.11
VTINX Vngrd Trgt Rtrmt Incm 0.12
VTXVX Vngrd Trgt Rtrmt 2015 0.13
VTWNX Vngrd Trgt Rtrmt 2020 0.13
VTTVX Vngrd Trgt Rtrmt 2025 0.13
VTHRX Vngrd Trgt Rtrmt 2030 0.14
VTTHX Vngrd Trgt Rtrmt 2035 0.14
VFORX Vngrd Trgt Rtrmt 2040 0.14
VTIVX Vngrd Trgt Rtrmt 2045 0.15
VFIFX Vngrd Trgt Rtrmt 2050 0.15
VFFVX Vngrd Trgt Rtrmt 2055 0.15
VTTSX Vngrd Trgt Rtrmt 2060 0.15
VLXVX Vngrd Trgt Rtrmt 2065 0.15
JCBUX Jpm Core Bond 0.35
MFEKX Mfs Grwth 0.58
PGMSX T Rowe Glbl Mlti Sector Bond 0.58
TRPIX T Rowe Value 0.64
JGMNX Jns Hndrsn Triton 0.66
PRIKX T Rowe Real Asst 0.66
MEFZX Mass Mtl Select Midcp Grwth 0.71
JVMRX Jhn Hnk Dscpd Value Midcp 0.77
ODVIX Invsc Oppnhmr Dvlpg Mrkts 0.85
CSDIX Chn Strs Real Estat Secrt 0.87
MDITX Mfs Intl Dvrsfctn 0.87
MIDLX Mfs Intl New Disc 0.93
MVSSX Victory Intgrty Smcp Value 0.95

tommy85
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Re: Is this a reasonable allocation for early 30s

Post by tommy85 » Sat Nov 09, 2019 10:38 pm

One thing you may want to consider is target date fund that matches your stock/bond allocation. Yes, you may pay slightly higher ER but you would have the simplicity and would have access to total stock market.

Dottie57
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Re: Is this a reasonable allocation for early 30s

Post by Dottie57 » Sat Nov 09, 2019 10:54 pm

tommy85 wrote:
Sat Nov 09, 2019 10:38 pm
One thing you may want to consider is target date fund that matches your stock/bond allocation. Yes, you may pay slightly higher ER but you would have the simplicity and would have access to total stock market.
I agree. Target date retirement funds are good. Automatic rebalancing. And a nice glide path.

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1789
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Re: Is this a reasonable allocation for early 30s

Post by 1789 » Sat Nov 09, 2019 10:57 pm

90% stocks with 10% bonds looks perfect. Here is how i would allocate that:

90% stocks -VFIAX (because you dont have VTSAX and so i wouldnt bother to add more funds to replicate that, because i am a lazy investor)
10% bonds - Vngrd Intmd Trem Bond Indx
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

KlangFool
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Re: Is this a reasonable allocation for early 30s

Post by KlangFool » Sat Nov 09, 2019 11:03 pm

Linkin06 wrote:
Sat Nov 09, 2019 11:08 am
My employer has options for target funds, but fees are pretty high at 0.5-6%. They do have lower vanguard indexes that I tried to use to recreate a target fund. Is this a reasonable allocation for early 30s, just starting off in career and looking to bank 200k a year for several years to get a cushion.


Vngrd 500 Indx 45.41%
Vngrd Ttl Intl Stck Indx 36%
Vngrd Midcp Indx 6.7%
Vncrd Smcp Indx 1.89%
Vngrd Intmd Trem Bond Indx 10%
Linkin06,

1) We/You could not answer the question until and unless you know what is your targeted number for Financial Independence and/or retirement. For example, if your number is 1 million, you are 5 years from achieving your goal. Why do you choose an AA of 90/10? You are only 5 years from FI/Retirement.

2) Pick a target retirement fund that matches your possible retirement date. That date is probably not 20 years from now. It is much closer.

KlangFool

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