401k - show FW finance your asset allocation and retirement strategies!

Age: 24
Investment Profile: extremely agressive
% of Salary Contributed: 11%
Company Match: 100% match for the first 4% of contributions, vested immediately.
Other Retirement Vehicles Used: brokerage stock account, ROTH IRA, pension

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October 2007 Allocation:

401k Distrbution:
Company Stock
5% Company Stock Fund
Large Cap Blend
40% S&P 500 Index Fund
Foreign
30% Dodge & Cox International Stock
10% Oppenheimer Small Cap Discovery
Global
5% Oakmark Global Fund
Bonds/Managed Income
10% Fixed Income Index Plus

...

This is actually for a TSP account (similar to a 401k)
Age: 28
% of Salary Contributed: 75% (no, not a typo)
Company Match: no match
Other Retirement Vehicles Used: Roth IRA

Presently trying to push as much money into TSP as I can, which within the year should find its way into my Roth IRA after a rollover and a conversion.

Age: 28
% of Salary Contributed: 12%
Company Match: 75% of first 6%, immediately vested
Other Retirement Vehicles Used: Roth IRA, I-bonds

401k Distrbution:
Large-Cap Domestic 35%
International 35%
Small-Cap Domestic 20%
Fixed Interest 10%

sdeals said: Age: 27
Investment Profile: N/A
% of Salary Contributed: none
Company Match: 10% of contributions / 5yrs vesting schedule
Other Retirement Vehicles Used: none

401k Distrbution: N/AI'm curious, what's your rationale for giving up that free 10%?

Age: 27
Investment Profile: You tell me.
% of Salary Contributed: 7%
Company Match: 5%
Other Retirement Vehicles Used: None

Current 401k Distrbution...
12% S&P 500
7% Russell 2000
43% Emerging Markets MSCI Index
38% Company Match is forced to company shares

With this strategy, I am up 16% compared to last year despite the company match returning a -2%. Oh to be free of the forced company shares!!!!!

Annualized personal rate of return (as of 03/31/2006)
1-Year Return 35.9%
3-Year Return 29.9%
5-Year Return 20.3

Vanguard Energy Fund Investor Shares
27.76%

Vanguard Explorer Fund Investor Shares
2.42%

Vanguard Growth Index Fund Investor Shares
4.62%

Vanguard Health Care Fund Investor Shares
5.90%

Vanguard Morgan Growth Fund Investor Shares
1.00%

Vanguard Precious Metals and Mining Fund
18.77%

Vanguard REIT Index Fund Investor Shares
4.09%

Vanguard Small-Cap Value Index Fund
1.01%

Vanguard Target Retirement 2035 Fund
30.94%

Vanguard Total Bond Market Index Fund Investor Shares
2.40%

Wells Fargo Advantage Emerg Mkt Focus A
1.09%

Oil and precious metals are the key.
Text

<<..the US stock indices are great long-term vehicles with no thought or effort required.>>

Watch out - that kind of "sure thing" thinking can be dangerous. Sometimes it pays to bet against the herd, especially when the herd is a stampede.

Invest in yourself - your education & career. Save, save, save and live debt-free.

sdeals said: jayK said: sdeals said: Age: 27
Investment Profile: N/A
% of Salary Contributed: none
Company Match: 10% of contributions / 5yrs vesting schedule
Other Retirement Vehicles Used: none

401k Distrbution: N/AI'm curious, what's your rationale for giving up that free 10%?

I think I can do better elsewhere.
Seriously though, I truly believe that I will be in a higher/same tax bracket at retirement (+ less deductions).

Actually, I need funds for business investments in order to build wealth.
Hopefully, the investments are going to pay off so I can catch up on retirement.

I don't get your answer...you can do better than getting a free 10%? Where else can you get free money?

Age: 25
Investment Profile: Agressive
% of Salary Contributed: 27% (max)
Company Match: 2% (Profit based match, typically 3:1)

401k Distrbution:
40% Russell 2000 Index
30% Midcap Fund
30% S&P Midcap 400 Index


Wife
Age: 27
Investment Profile: Agressive
% of Salary Contributed: 30%
Company Match: 6% (0.75:1)

401k Distrbution:
60% Large Cap Value Fund
40% Russell 2000 Index Fund

When the market gets leery, 100% Stable Value (Fixed Income) Fund

ajf3 said:
My year to date rate of return is 8.1% which is good compared to last year, but I'm really thinking about putting more of a % into the non-us funds.

It's not a bad idea. I think most of the people on this board had far too little in international funds. I'm about 40% international in my 401k.

Age: 27
Investment Profile: Agressive
% of Salary Contributed: 12%
Company Match: 50% of first 8%
Other Retirement Vehicles Used: None right now, will set up Roth IRA soon.

401k Distrbution:
50% Small/Mid Caps
50% International.
Company match goes to company stock fund.

Monitor weekly and make changes accordingly to market change.

Age: 24
Investment Profile: Very agressive
% of Salary Contributed: 6%
Company Match: 50% of the first 6% plus 5% of salary each year as 401k profit share (this part vests in 5 years)
Other Retirement Vehicles Used: few stocks, mutual funds, Roth IRA

401k Distrbution:
25% International
50% Domestic growth
25% Specialty Sector

Nebster said: FatFreddie said: [Q Fortunately, too, if that were to happen, everyone would know about it and most of us would be screwed, "against the herd" or no.

I disagree with the "live debt-free" statement. Selective debt acquisition can have a wonderful long-term positive expectation."Fortunately ...... most of us would be screwed"?? That's a strange statement and validates what I said about the herd. You don't have to go down with the ship and take solace that everyone else you know is sinking with you. There are other ways to invest - stocks aren't the only game in town. When everyone thinks one way, nobody is thinking.

Debt-free worked for me. Paid off my home and investment property 5 years ago. Early retired at 50. Living without debt = financial freedom = do what I want when I want. Great psychic rewards.

Age 23
% Contributed 8
Company match: 100% of 6% up to 750 a quarter
Setting up IRA soon.

80% S&P 500
10% small cap value
10% mid cap value

The last two I mainly chose because of their performance, not category. My thinking is to stick with S&P because it has proven returns over decades and my 401k shouldn't be touched for almost 40 years.

A few comments. Why think so much about small/med/large cap etc? Nothing says that this results in the best performance. It can reduce risk but almost everyone here says they are aggressive or risky. If that’s the case a particular company or market segment is a better target.

Also contributions seem pretty high. My thinking is to keep 401k lower, contribute more to a Roth IRA for 5-10 years until I’m ready to buy a house. Then I can pull principle from the Roth for a down payment. What do people think of this?

Age: 30
Investment Profile: Moderate
% of Salary Contributed: 23%
Company Match: (100% of 1st 4%) + (50% of next 6%) = 7% (5 year vesting)
Other Retirement Vehicles Used: Roth IRA

401k Distrbution:
30% Vanguard International
30% Vanguard 500
30% Vanguard Small Cap
10% Vanguard Bond Fund

asdf83 said: Age 23
% Contributed 8
...
A few comments. Why think so much about small/med/large cap etc? Nothing says that this results in the best performance. It can reduce risk but almost everyone here says they are aggressive or risky. If that’s the case a particular company or market segment is a better target.Higher risk usually means a higher return. You're only 23, you have plenty of time before you retire, so you should have an aggressive/risky portfolio.

Also contributions seem pretty high. My thinking is to keep 401k lower, contribute more to a Roth IRA for 5-10 years until I’m ready to buy a house. Then I can pull principle from the Roth for a down payment. What do people think of this?As GTKeeper said above, don't mix retirement savings with saving for a house. These should be two separate goals, and you shouldn't withdraw from your retirement accounts unless absolutely necessary.

Regarding high 401(k) contributions...if you're in a high tax bracket, you would want to avoid taxes now and pay at retirement (when you will likely be in a lower bracket), instead of paying those higher taxes now (as you would with a Roth IRA).

It's great you younger people are saving so much and thinking now about your retirement. You're way ahead of the game and will probably be fine. I just hope you don't get screwed down the road, especially those who are allocating so much to aggressive funds. Yes, your reward can be higher, but your risk is greater too. Some things to think about:

- Stock is not finite - companies can issue new stock at the drop of a hat, increasing the # of outstanding shares and diluting price.

- Baby boomers, the largest segment of the population and those with the best, most high-paying jobs, will, as they begin retiring in the next few years, begin reducing their flow of funds into 401K's/mutual funds. They will then begin selling as they finance their "golden years". Will there be enough younger generation buyers, in enough good jobs, to absorb all the stock being sold by the boomers?

- U.S. debt is horribly large and getting larger by the second - we are by far the biggest debtor nation in the world. Foreign buying of our debt has thus far kept interest rates low. How long can that last? Debt must be repaid eventually.

- Add to the U.S. debt the future Social Security and Medicare liabilites. No way around it - either taxes go up or benefits will be cut, or some combination of both.

Depends on demand. Stock price is set by buyers and sellers. More supply means demand must also increase to keep stock price stable. Increased supply with demand remaining constant = lower stock price. Recent example: Google last week announced they were selling 5 million additional shares - stock fell 8% the next day.

Thanks for the comments. I'm still trying form my opinions and plans for retirement.

GTKeeper said: You shouldn't touch Roth for a house down payment. That should come out of cash you have been saving. IMHO if you don't have the cash, you aren't ready to buy a home. If you pull out lets say 20k in 5 years (at 28) with 31.5 years until 59.5 years of age, you will effectively lose 217k in retirement money assuming 8% return/year average. 20*1.08^31. I am not sure I would want to do that.... thats a lot of games of golf!

I figure its a better bet to put money in medium risk accounts in a roth then keep it in strait cash for 5-10 years. A down payment not only helps get a lower loan rate, but is less money that you have to "pay" 5-8% for (whatever the mortgage rate may be).

A Roth is technically retirement but the fact that you can withdraw principle makes it much more flexible.

I just want a reasonable balance between money locked in the 401k and money outside it. A roth is a perfect place for some of the outside money.

fonzinator said:
Since you are young, I would strongly recommend turning up the risk factor on your allocations. Your current allocations would fit someone nearing retirement: low risk. Unless you just simply don't want to watch the market and prefer a sit-and-forget strategy, you have the opportunity to make substantially significant returns here in your 20s and 30s.

I have no problem with risk. S&P is somewhat risky, not the standard recommendation for someone aproaching retirement. My thing is, history shows aggressive funds do no better long-term than value or index funds. Short term they can, but history also shows most people (which would include myself) are terrible at timing the market and getting into and out of investments at the right time.

I haven’t seen anything show that international funds are better long term either. And my 401k only has two internation funds available anyway, neither emerging markets.

quarterly update, and to keep thread alive:

33% US stocks
17% foreign stocks
10% US intermediate treasuries
15% TIPS
18% stable value fund at 3.8%
5% cash
1% gold bullion

I'm about at a rebalancing band, to bring total stocks up to 55%. Probably tomorrow morning.