At the age of 26 should I be predominantly in "Growth" funds or "Aggressive" funds? I am pretty diverse in my fund options, just wanted to know which way should I lean more now and at what age should I change?
You have approximately 40 years exposure to the market. I would pick a strategy that maximizes growth, within your comfort zone of volatility - and understand, if you set up steady contributions, dollar cost averaging will eliminate a significant portion of your volatility curve (in other words, the volatility will be on paper only - if you're comfortable with that - it CANNOT hurt you) - so, at that point, you're only trying to protect yourself from a sustained bear market immediately prior to your retirement.
Therefore, I would plan on shifting from a Growth/Aggressive heavy portfolio to things with less volatility at about the 5 to 7 years prior to retirement year - pick a window and plan, and shift a portion every year until with about a year or two to go, you're pretty much 100% in income producing, low-to-no risk funds, bonds, etc. - but I wouldn't even worry about making that plan for 25 to 30 years, much less executing it before age 60.
This post was edited on 4/3 at 11:28 am