Author Topic: Should I adjust allocation for intended FI date? (2030)  (Read 398 times)

The 585

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Should I adjust allocation for intended FI date? (2030)
« on: March 17, 2017, 03:38:36 PM »
My current investments totaling ~$145k are split among my 401k ($65k), Roth IRA ($18k), HSA ($3k), and taxable vanguard accounts ($60k), with my overall allocation as follows:

39% Large Cap Stocks
14% Mid/Small Cap Stocks
43% International Stocks
4% Bonds

If I plan to be FI by 2030, should I allocate at least 10% to bonds--or maybe even more? If so, in which account should I shift the bonds into?
Thanks in advance!

VoteCthulu

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Re: Should I adjust allocation for intended FI date? (2030)
« Reply #1 on: March 17, 2017, 07:42:06 PM »
I wouldn't, but I have a fairly high risk tolerance. You might need more bonds to get you through the next crash (whenever that might be), which is why you should sit down and write in IPS that tells your future self why you're choosing the asset allocation that's best for you.

MustacheAndaHalf

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Re: Should I adjust allocation for intended FI date? (2030)
« Reply #2 on: March 18, 2017, 05:49:32 AM »
When you begin withdrawing money in retirement, a stock correction can hurt.  It could even change your retirement plans.  That's the role bonds play: preserving your retirement assets.

Currently Vanguard Target 2030 is about 28% bonds.  You could either buy into that fund, and not have to consider increasing bond allocation... or you can adjust bonds upwards as you approach retirement, to make sure your portfolio is stable.