Youngster IRA Allocations | TigerDroppings.com

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kennypowers816
LSU Fan
Houston
Member since Jan 2010
1688 posts

Youngster IRA Allocations


25, been working a few years

Contribute 10% to Roth 401k - split among a few funds: large growth, mid cap growth, large blend & S&P 500 index

I have a normal brokerage account with a little bit of money. I dabble with a few individual equities and have made a little bit. Planning on using this as part of a down payment in a couple of years.

Also have a Roth IRA with max contributions the past few years. Currently I have these approximate holdings:
37% VTSMX (total stock market index fund)
22% V (not at the advice of BigFella -- my own thoughts as well as a suggestion from a very successful person close to me)
20% BFOCX (Berkshire Focus - tech growth fund)
22% Misc funds and equities that I've owned since I opened the account 7 years ago.

I am about to add another 30% to my IRA, but I would like some basic advice of where to go with it. I originally planned on increasing the VTSMX holding, but I feel like I have a significant majority of my 401k and IRA in large cap and index funds, and I'm not sure I want to put another big chunk of money towards an index fund at an all time high right now. I know the basic thought process on index funds is that they will outperform individual equities in the long run, but I just feel weird buying an index fund right now.

Any suggestions? I'm open to individual equities, but I would probably prefer funds. Or if I should just suck it up and buy VTSMX again right now, just tell me I'm overthinking this.

tl;dr - scared to buy an index fund at an all-time high. where should a 25yr old put his retirement money?



This post was edited on 9/18 at 2:40 pm



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NukemVol
Tennessee Fan
Atlanta
Member since Jan 2010
1431 posts

re: Youngster IRA Allocations


I have a 401k. What are the tax benefits to having both an IRA and 401k? As in, does it change the limits that are tax deductible? If so, would it not be more advantageous to max out the 401k?





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kennypowers816
LSU Fan
Houston
Member since Jan 2010
1688 posts

re: Youngster IRA Allocations


Both my 401k and IRA are roth accounts so the tax benefits (or lack thereof in the short term) are the same.

I max out my IRA because it gives me the flexibility to invest in whatever I want, not just the 10 fund options (plus 20 target date funds) in my 401k plan.






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BJ titsnbeer
LSU Fan
Gods Country
Member since Mar 2011
189 posts

re: Youngster IRA Allocations


quote:

scared to buy an index fund at an all-time high.


At our age you shouldn't be scared at all. In 35 years there will be a new all time high.






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