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  • 401k Asset Allocation Recommendations

    I know this is highly variable but was curious to see what % allocations others do with their 401k.

     

    just now starting off contributing to my groups 401k. 38 yrs old, Anesthesia, private group with great options within 401k (at least I'm told this). Max 51k year.

    essentially 90/10 ratio with the following breakdown:

    40% vanguard Lg Cap (0.05), 20% vanguard mid cap (0.09), 10% vanguard small cap (0.09), 10% vanguard international (.14), 10% vanguard total bond (0.07%). These are all index funds.

    remaining 10% is a T.Rowe Price fund that is essentially stocks but carries higher expense of 0.77. Other than I being in a health related field and partners telling me they've made a lot of $$ from this fund over the years I'm not sure why I chose it and price comparatively is much higher.

     

    Since I'm essentially just now starting, I'm comfortable with 90/10 ratio. I've considered increasing my international percent to 20% and dropping the health fund, primarily b/c of expense ratio.

     

    Appreciate any advice and recommendations.

    CJ

     

  • #2
    1/6 each to:
    Small Cap Value
    Small Cap Growth
    Large Cap Value
    Large Cap Growth
    REIT fund
    International fund

    Rebalance annually and don't touch. No need for bonds if you aren't going to take anything out in the next 5 years. Why dampen returns when you do not have to? Might make you feel better during a temporary correction or bear market, but so what? Feelings and money are a bad combination. Read the 2013 version of Simple Wealth, Inevitable Wealth (feel free to ignore his advice to work with a financial advisor) and see if you agree. If not, you'll find plenty of happy feelings about bonds on this site. I do believe it is important to understand both sides of the argument, though, and Nick Murray's is the most rational and compelling you'll read.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      Thanks.

      Why not any allocation to Mid Cap?

       

      i have access to a REIT fund but it carries an expense ratio of 0.95 which is too much.

       

      i think I could boost my international percentage to 15-18% range.

       

      a few senior partners recommended no bonds as I'm 20-25 yrs out from retirement....which I'll consider.

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      • #4
        Because mid-cap is kind of squishy, to use the technical term :-) Historical measurements are LC v. SC. I really have no problem with mixing in MC, but that's just the way we do it and I like the distinction between LC and SC.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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