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Started By
Message
Nearing retirement 401k advice
Posted on 11/15/24 at 10:33 am
Posted on 11/15/24 at 10:33 am
I will be retiring in 2 years. I have a Fidelity 401k and a Vanguard IRA. Looking for advice on funds to move into as retirement approaches. I am currently wide-spread and fairly aggressive with my allocations, would like to go more conservative while still seeking some growth. Would a 2026 target date fund be the best bet? Hate to miss any gains from a 'Trump bump' but really dont want to lose what i already have.
6
Posted on 11/15/24 at 10:34 am to tigerlife00
Throw it all into DOGE.
Posted on 11/15/24 at 11:12 am to tigerlife00
Do you need the money in the next 5-10 years?
If so, yeah a short target date fund is fine.
If you don’t, just let it ride in an S&P 500 index fund.
Also, I would highly consider a bitcoin position of 5% or less.
If so, yeah a short target date fund is fine.
If you don’t, just let it ride in an S&P 500 index fund.
Also, I would highly consider a bitcoin position of 5% or less.
This post was edited on 11/15/24 at 11:13 am
Posted on 11/15/24 at 11:15 am to tigerlife00
quote:a target date fund two years out is going to be mostly bonds. The point of target date funds is to stay in them for 20-30 years as they slowly transition from equities to bonds. If you are concerned about reducing risk the best way to do that (if you are not bond-savvy) is just to go to cash…sell your equity funds on a sliding scale over two years and buy money market or CDs
Would a 2026 target date fund be the best bet?
Posted on 11/15/24 at 11:36 am to cgrand
quote:
a target date fund two years out is going to be mostly bonds.
Let's take the Vanguard 2025
It is almost 51/49 stocks and bonds. Which is perfect for someone 60-65 years old.
Posted on 11/15/24 at 11:59 am to tigerlife00
No way anyone can give meaningful advice without more detail. You might need to take more risk just to have a chance.to make ends meet or be sitting pretty and not want to put your comfortable nest egg at risk. What is your target income? What other sources if any? Account balances? Age/projected retirement duration? Spouse situation and their income sources? SS when/how much?
This post was edited on 11/15/24 at 12:06 pm
Posted on 11/15/24 at 12:08 pm to lsu13lsu
A target date fund is OK, but you have no control over allocation if you use that. It still might not make much difference, but I don't like that part of it. Bonds have sucked for the last 20+ years, but they may be better in the future, but I am still reading articles on bonds being "expensive" right now, just like may say about mega cap stocks, and guess what? If your target date fund is index based, your stock exposure in it will be dominated by mega cap stocks. Also, you will probably be holding more in foreign stocks than I would care for. Your mileage may vary, but....
Take a look at the actual underlying funds in those target date funds and ask yourself how much you want of it.
The other issue for me is that holding individual funds means I can sell an asset class to get cash from where I want to. If you sell a little of a target date fund, say maybe to buy your mistress a Porsche for Christmas, the money will come out of all your assets, whereas I'd rather just take some out of mega caps right now.
Not a right or wrong answer, but my preference is to manage as much as I can. The flip side of that is that a guy who goes target date and stays disciplined will probably beat a guy who does DIY but isn't disciplined.
Take a look at the actual underlying funds in those target date funds and ask yourself how much you want of it.
The other issue for me is that holding individual funds means I can sell an asset class to get cash from where I want to. If you sell a little of a target date fund, say maybe to buy your mistress a Porsche for Christmas, the money will come out of all your assets, whereas I'd rather just take some out of mega caps right now.
Not a right or wrong answer, but my preference is to manage as much as I can. The flip side of that is that a guy who goes target date and stays disciplined will probably beat a guy who does DIY but isn't disciplined.
Posted on 11/15/24 at 12:24 pm to I Love Bama
quote:
If you don’t, just let it ride in an S&P 500 index fund.
This is my plan upon retirement. Just let my Vanguard account grow while I draw down my IRA and 401K which will still have several hundred thousand combined left after I draw them down.
What is going to suck is RMD that kick in at 75.
ETA: As much as the RMD will suck it's better than having to live off of SS as many Americans do.
This post was edited on 11/15/24 at 12:26 pm
Posted on 11/15/24 at 12:27 pm to tigerlife00
Calculator.net has several retirement and investment calculators you can play with.
Posted on 11/15/24 at 12:36 pm to tigerlife00
Don't treat all your money the same. You don't need access to all your money at the same time. I use 3 buckets and invest each bucket differently. Each bucket is related to how quickly I might need the money.
Your short term bucket should be in more stable investments to prevent needing the money in a downturn. Bonds, Cds, Treasuries, or stocks with less volatility (Walmart type). This might be money you will access in next 2 or 3 years, possibly longer depending on your situation. I will say that bond performance has not been typical for the past few years in both directions. It has had bigger swings than typical.
Your long term bucket is money you wont need in a long time (10+ years?). The long term should look similar to current investments, assuming you have not already started tweaking it based on your age.
Middle bucket is a mix between the 2 strategies.
I am using this approach. My biggest complaint with the strategy so far is that I have been making more money in retirement than I realized I would. I became a full time investor when I retired and have been fortunate. I haven't really needed my short term money yet, and am second guessing how much I have in the short term bucket. But was prepared if it had turned out differently.
Good luck.
Your short term bucket should be in more stable investments to prevent needing the money in a downturn. Bonds, Cds, Treasuries, or stocks with less volatility (Walmart type). This might be money you will access in next 2 or 3 years, possibly longer depending on your situation. I will say that bond performance has not been typical for the past few years in both directions. It has had bigger swings than typical.
Your long term bucket is money you wont need in a long time (10+ years?). The long term should look similar to current investments, assuming you have not already started tweaking it based on your age.
Middle bucket is a mix between the 2 strategies.
I am using this approach. My biggest complaint with the strategy so far is that I have been making more money in retirement than I realized I would. I became a full time investor when I retired and have been fortunate. I haven't really needed my short term money yet, and am second guessing how much I have in the short term bucket. But was prepared if it had turned out differently.
Good luck.
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