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Asset allocation, account distribution and tilting question

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  • VagabondMD
    replied
    1. I was 80:20 at your age.

    2. I am 70:30

    3. There are spreadsheets that allow you to optimize this on the PhysicianOnFIRE site, IIRC.

    Leave a comment:


  • JBME
    replied




    I should have clarified my question. I understand that between taxable and pre-tax accounts there are differences in tax efficiency (i.e. bonds). My question is specifically about the 3 accounts from my employer: 1. 403b, 2. nongovermental 457 (my employer is solvent, flexible withdrawal options, no forced distributions), 3. A defined contribution account (this is money my employer puts in for me. we get a fixed percentage of salary but no match). Are there any strategies about these 3 accounts?
    Click to expand...


    I'd think about it this way: when you retire you'll use the 457 money before you use the 403b or defined contribution money. So, determine your asset allocation and if you determine it's 20/80, have the bulk of the 457 in bonds (as long as there's a low ER bond fund in there). That'll keep that money stable and allow you to better plan your retirement.

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  • pedsmd
    replied
    I should have clarified my question. I understand that between taxable and pre-tax accounts there are differences in tax efficiency (i.e. bonds). My question is specifically about the 3 accounts from my employer: 1. 403b, 2. nongovermental 457 (my employer is solvent, flexible withdrawal options, no forced distributions), 3. A defined contribution account (this is money my employer puts in for me. we get a fixed percentage of salary but no match). Are there any strategies about these 3 accounts?

    Leave a comment:


  • CordMcNally
    replied




    1. Is 10% in bonds too risky for our age?
    Click to expand...


    Probably.

     




    2. When I started with this allocation (about 6 or 7 years ago when I got a little more knowledgable) I didn’t know a lot about tilting so I did 50/50 for the stocks between sp500 and the rest of the market. I realize this is weighted in a way for more volatility and 80/20 is probably more representative of the total market. Is this split a bad idea or should I be more towards the sp?
    Click to expand...


    Do you have a personal investment policy statement that lays out your desired asset allocation? Your current AA may be perfect for you or you may need to tweak it a bit.

     




    3. Is there a reason to not allocate all the accounts with the same percentages?
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    In the name of tax efficiency, some funds are better served in certain retirement accounts than others. Also, depending on your investment options in a particular retirement account, you may not have a good fund option (or any fund at all) for certain things.

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  • Peds
    replied
    1- up to you. It's the minimum.
    2- up to you. I do 80:20.
    3- yes. It's inefficient.

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  • Asset allocation, account distribution and tilting question

    I have about 1.1 million in my employers retirement accounts and I'm in my mid 40s and my wife is in her early 40s. I have another 325k between roths/wifes 401k/taxable for 1.425mill total retirement savings thus far. I max out 403b/457. Wife contributes to 403b (works part time). we do backdoor roths and for the taxable we put in another 25k a year. With all that we're in the high teens for savings (I know WCI says 20 but we're close)

    The 1.1 million is split between 3 accounts:

    1. 403b, 2. nongovermental 457 (my employer is solvent, flexible withdrawal options, no forced distributions), 3. A defined contribution account (this is money my employer puts in for me. we get a fixed percentage of salary but no match).

    Currently the money is about equal in all 3 accounts and I asset allocate the same way:

    10% bonds, 20% international, 70% stocks (35% sp 500 / 35% extended market index).

    This has worked for my and my money has grown over the last decade or so. I have a pretty good risk tolerance. In some of the recent ups and downs I've seen a >10% dip and recovery and didn't flinch.

    My questions:

    1. Is 10% in bonds too risky for our age?

    2. When I started with this allocation (about 6 or 7 years ago when I got a little more knowledgable) I didn't know a lot about tilting so I did 50/50 for the stocks between sp500 and the rest of the market. I realize this is weighted in a way for more volatility and 80/20 is probably more representative of the total market. Is this split a bad idea or should I be more towards the sp?

    3. Is there a reason to not allocate all the accounts with the same percentages?

     
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