rebalancing - time of the year

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Topic Author
linguista57
Posts: 32
Joined: Fri Mar 17, 2017 8:25 pm

rebalancing - time of the year

Post by linguista57 » Wed Feb 06, 2019 8:14 pm

Hello all,

I am reviewing my portfolio and was wondering if I should rebalance things a bit. Especially my contribution to the 401k which currently is going 100% into bonds and also taking some cash and investing it. Thank you so much for your input. Always greatly appreciated.

I have about 350k – not a lot but saving aggressively for the past 5 years. Will never get to the million . that's for sure.
No debt. Home is paid off.
Will have SSN about $2200 at 66
Pension around $1000 at 66.

I have about 90k in savings – CD – money Market. Checking acct.
Age 61
Filing Status – single – Fed. bracket 22% State 0% California

Bonds 41%
Stock 59% (64% stock and 36% international)
If I take cash in consideration. Here is my allocation:
25% cash
31% bond
44% stock

Brokerage Account
VTIAX Vanguard total International stock Index 17.7 %
VTSAX Vanguard total stock Market 4.2%

Trad IRA
VTSAX Vanguard total stock market Index fund 18.90%
VBTLX Bond 5.7%

Roth IRA VTSAX 5.3%


403B with LAUSD not contributing. not an active acct.
FUSVX Fidelity 500 Index Fund 9.4%

401k at work
SABX Western assist core plus fee 0.019 15%
contribution $300 per week.

Other Choices
VASIX Vanguard life strategy income fund 0.11% exp
VTMIX Vanguard market developed index 0.20%
Western asset core plus bond IS WACPX 0.45
Vanguard 500 Index Fund Admiral Shares VFIAX 0.04%
JPMorgan Large Cap Growth Fund Class R6 JLGMX 0.44%
Vanguard Mid-Cap Growth Index Fund Admiral Shares VMGMX 0.07
VSMGX - Vanguard LifeStrategy Moderate Growth Fund 0.13
Vanguard Target retirement 2020
Vanguard Target retirement age 2022

457B with LAUSD
VBTLX Total Bond 20.4%
VTMX Vanguard developed market 3.4%

Every month between $500 and $1000 goes into my 457B - VTMX

Every month $500 is going into a traditional IRA – VTSAX - for 2019 contribution.

Again thank you.

bloom2708
Posts: 6221
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: rebalancing - time of the year

Post by bloom2708 » Thu Feb 07, 2019 10:37 am

Re-balancing (to me) is when your target mix of stocks and bonds/cash is off by 3 or 5% (some % variance).

Are you wanting to move from 44/56 where you currently are?

I think 60/40 is reasonable. 50/50 is also reasonable for your age. 40/60 seems like more of an "I'm retired now" allocation.

If you are thinking of having more stocks, that wouldn't fall into a re-balance scenario. I would do that when your willingness/need to take risk changes. That could be today.

You have good fund options. LifeStrategy Moderate Growth is 60/40. Target 2020 should be about 55%-60% stocks.

It takes time to move the mix with new contributions. I guess you should state if you want more stocks or less stocks.

If you want to move to more stocks with new money, switch to adding more stock funds instead of bonds or mixed funds.
"We are not here to agree with you; we are here to provoke thoughtfulness." Unknown Boglehead

Topic Author
linguista57
Posts: 32
Joined: Fri Mar 17, 2017 8:25 pm

Re: rebalancing - time of the year

Post by linguista57 » Sun Feb 10, 2019 1:35 pm

Thank you for your input. Greatly appreciated.

Topic Author
linguista57
Posts: 32
Joined: Fri Mar 17, 2017 8:25 pm

Re: rebalancing - time of the year

Post by linguista57 » Sun Feb 10, 2019 1:55 pm

Question?


What do you mean here? It takes time to move the mix with new contributions.
I guess you should state if you want more stocks or less stocks. yes more stock

If you want to move to more stocks with new money,
switch to adding more stock funds instead of bonds or mixed funds.

In the 401k - do you suggest that all my contributions should go to "Vanguard Life Strategy"

How about the ones that are in the bund fund SABXx Western assist - should i move the money also into Vanguard Life Strategy?

retiredjg
Posts: 36265
Joined: Thu Jan 10, 2008 12:56 pm

Re: rebalancing - time of the year

Post by retiredjg » Tue Jun 11, 2019 9:09 am

linguista57 wrote:
Wed Feb 06, 2019 8:14 pm
I am reviewing my portfolio and was wondering if I should rebalance things a bit. Especially my contribution to the 401k which currently is going 100% into bonds and also taking some cash and investing it.
That will depend on what stock to bond ratio you want. It appears you are currently at about 59% stocks and 41% bonds. That is a reasonable number for someone your age (61) who wants to retire in a few years. It may also be time for you to start moving to a less aggressive portfolio so you can be there (at a more conservative stance) when you retire.

What stock to bond ratio do you want now? What stock to bond ratio do you want in early retirement?

I have about 350k – not a lot but saving aggressively for the past 5 years. Will never get to the million . that's for sure.
You are doing a good job. With your SS and your pension, it appears to me you do not need to get to "the million".

No debt. Home is paid off.
Will have SSN about $2200 at 66
Pension around $1000 at 66.
How much of your ordinary living expenses do you believe this will cover? Have you already checked to be sure your pension will not reduce your SS? I understand that happens sometimes.

Filing Status – single – Fed. bracket 22% State 0% California
Try to figure out what your state tax is.

Bonds 41%
Stock 59% (64% stock and 36% international)
If I take cash in consideration. Here is my allocation:
25% cash
31% bond
44% stock
It is OK to have some cash set aside as an emergency fund. This seems like a bit much. Is this in savings? Does it include that CD you already mentioned or is it completely separate?



Every month $500 is going into a traditional IRA – VTSAX - for 2019 contribution.
This is the most important thing to talk about right now. Are you deducting this contribution to tIRA from your taxable income each year? No matter what you think the answer is, go back and look at several years of tax returns to be sure it actually did get deducted. In the old form 1040, that would be shown on line 32. I'm not sure where it is on the new postcard size form but will look if you have trouble finding it.

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