Hi I am 30 and starting to plan for ER

[mickj]

Hi I am 30 and starting to plan for ER,

I currently have approximately 32,000 in a 401k, 16,000 in a cash value pension, and 1,800 in an IRA. I am also currently paying down non-house debt (Hopefully have that done in 3-4 years.) Mainly I wanted to get people's opinion on the types of investments I have in my 401k:

% of Total FEE Fund
10% .61% Lehman Weighted High Yield/ Emerging Market Index (Bonds)

3% .06% Russell 1000 value index
3% .05% Russell 1000 growth index

20% .15% Morgan Stanley REIT Index
15% .07% Russell 2000 Growth Index
35% .05% Russell 2000 Value Index

6% .25% Morgan Stanley Capital Int. Pacific Free Index
6% .20% Morgan Stanley Capital Int. Europe Index

2% .04% Company Stock


Any comments and suggestions would be appreciated!

[azanon]

I'd "lose" the REIT's.... that's about it. Your house is enough real estate exposure IMHO. If you enjoyed the last 5 years of strong REIT returns, congraduations. Its now time to take your profits.

Looks good.

[wildcat]

May want to cut back on the REITs. I don't think the index will do well as a whole & only a few small pockets of REITs will do well with rising interest rates. I do like your move towards value.

Expand a little on the non-house debt...

[azanon]

yeah 60K in non-house debt is quite a bit. If not primarily school loans, then you'll need to do quite a bit of reprioritization to be in the ER league. Heck, that's probably well above typical for just the average person, much less an ER minded-one. Just being honest.

[mickj]

Yes I know it is a lot of debt, that is why we are trying to pay it off aggressively so that we can be in the ER league. Mainly it consists of a timeshare (no way to sell for even a fraction we paid), a car we are upside down in, and some money we borrowed for a downpayment on our home.

Trying to get out of debt is what lead me to find this message board so I at least have my dumb past decisions to thank for that!

Don't worry about offending me, I know that it is above average and I actually like being reminded of the fact. It helps keep me motivated.

[azanon]

Except for matching contributions for your work 401(k), i'd strongly consider redirecting your other monthly savings to exclusively paying on those debts. Do that plus work on a nice emergency fund if you dont already have one (shoot for at least 3 months of expenses worth).

Once those are knocked out, then you'll have quite a bit more money to redirect towards your IRAs and be in a much safer financial position to boot for any unexpected short-term financial emergencies.

[mickj]

That is good to hear, that is what I am currently doing.