Author Topic: Vanguard 403(b)(7) allocation advice  (Read 2159 times)

charis

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Vanguard 403(b)(7) allocation advice
« on: August 10, 2015, 02:41:47 PM »
My husband just opened a 403b that he will start contributing to soon.  The question is where to invest the contributions.  The options that appeal to me are the 500 index or a Target retirement (which we have in our IRAs currently).  I know the target fund has a higher expense ratio, but we don't have time to actively manage this account.  Do we need to manage anything if we pick the 500 index? 

matchewed

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Re: Vanguard 403(b)(7) allocation advice
« Reply #1 on: August 10, 2015, 03:22:06 PM »
Depends on your Asset Allocation. I'd advice that either you and your husband have a singular IPS which will outline what you do with your various accounts, or he'll have his own. Either way whatever option you choose should be governed by that. That is formed with your risk tolerance, your acceptance of costs, and (conservatively) your anticipated returns.

forummm

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Re: Vanguard 403(b)(7) allocation advice
« Reply #2 on: August 10, 2015, 04:57:42 PM »
You don't need to (and shouldn't!) actively manage the account. I never touch mine. The money just piles up.

seattlecyclone

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Re: Vanguard 403(b)(7) allocation advice
« Reply #3 on: August 10, 2015, 04:59:06 PM »
Yes, take some time to decide what your asset allocation will be. Once you do this, these types of questions often answer themselves.

charis

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Re: Vanguard 403(b)(7) allocation advice
« Reply #4 on: August 11, 2015, 08:02:22 AM »
Our current assets mix is 91% stocks and 9% bonds in target retirement accounts, which we are fine with.  I suppose we could set up a similar ratio in the 403b.  I was thinking of suggesting 100% in a low cost index fund, but that might be more risk than we should take on.  Thank you for the ISP suggestion - I'll do that before we decide.

forummm

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Re: Vanguard 403(b)(7) allocation advice
« Reply #5 on: August 11, 2015, 08:27:49 AM »
Our current assets mix is 91% stocks and 9% bonds in target retirement accounts, which we are fine with.  I suppose we could set up a similar ratio in the 403b.  I was thinking of suggesting 100% in a low cost index fund, but that might be more risk than we should take on.  Thank you for the ISP suggestion - I'll do that before we decide.

You can be 100% low cost fund in the 403b but then compensate for that by being a little more conservative in your IRA. You don't need each account to be balanced--just your overall holdings. Hold the funds that makes the most sense for each account. I have only international in my 401k, only US large in my taxable, a mix in my IRA, and small/mid US in DW's 401k. It all ends up being like 50/50 VTSAX and VTIAX added together. You don't need to be this complicated--it's just an example.

charis

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Re: Vanguard 403(b)(7) allocation advice
« Reply #6 on: August 11, 2015, 12:51:11 PM »
That makes sense.  I just started a personal capital account to get a quick view of our current asset allocation.  Our investments are (roughly) at 60% US stocks, 27% int'l stocks, 5% US bonds, 3% int'l bonds, 5% cash/alternatives.  (We do have more cash than this that is earmarked for investing).  I guess we'll do a similar ratio in the 403b, maybe 95%/5% stock/bond.