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Finally Contributing to Stable Value Fund
Old 04-14-2015, 04:17 PM   #1
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Finally Contributing to Stable Value Fund

I have a little more than 2 years before I retire at age 50. Will be doing substantially equal payments from my 401k as part of my income.

Currently the funds are invested in 90% stocks and the rest in bonds. I have never contributed to the stable value fund.

Today I changed future contributions to be 100% stable value fund. So over the next couple years the stable value fund should have about $60,000 (includes matching funds).

The overall allocation when the SEPP begin will be 83% stocks/9% Bonds/8% Stable Value.

Just wanted to run this by all you smart folks for comments since this is new to me (and make sure I am not too far off the straight and narrow path).

Edit: The above will be about half our income the other half will come from pensions, house sale, etc.

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Old 04-14-2015, 05:12 PM   #2
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You know the mantra around here: Everyone's situation is different.

For a while there, I was splitting my nonstock portion between the total bond fund and the stable value fund in my 401(k). It seemed a good idea at the time. But when the stable value fund return dropped considerably and the long-promised higher interest rates didn't materialize, I gave up on that approach. So much for my tweaking. I now plan to just stick to 60/40.

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Old 04-14-2015, 05:19 PM   #3
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I'm using a stable value fund as the 3rd tier for a cash-like repository as an emergency fund.

The other tiers (years 1 and 2) are money-market fund/CDs and I-bonds.

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Old 04-14-2015, 05:24 PM   #4
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What interest rate is your stable value fund paying? If it's less than the inflation rate, then you're money is guaranteed to loose value. If I were in your situation, I would have 60% go towards stocks and 40% towards the stable value fund.
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Old 04-16-2015, 12:32 PM   #5
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I've got about 40% of my k money in a stable value fund - it's been getting somewhere between 2 and 5% over the years (closer to 2% now) and it has a duration of almost zero - I like it - all my new money (since 2007) goes into an allocation of about 65/15/20
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