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Old 08-27-2013, 09:02 AM   #41
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You are correct that you don't have to worry about tax-efficient placement if all your funds are in your 401k.

I would recommend just going for the cheapest index funds they have available.
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Old 08-27-2013, 11:32 AM   #42
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One thing you might consider as an aggressive investor. You can stay close to 100% equities right up until you retire, if your retirement date is flexible. Just keep working until you reach your desired level of FI, then retire. It might get you there earlier (the average returns would say so), but might also delay it a bit. After you retire and start making withdrawals you need to have the more conservative portfolio in place to help with any sequence of returns problems.
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Old 08-27-2013, 12:32 PM   #43
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One thing you might consider as an aggressive investor. You can stay close to 100% equities right up until you retire, if your retirement date is flexible. Just keep working until you reach your desired level of FI, then retire. It might get you there earlier (the average returns would say so), but might also delay it a bit. After you retire and start making withdrawals you need to have the more conservative portfolio in place to help with any sequence of returns problems.
My objective is to have over $1M in my retirement account when I retire in 10 years.. Now I need help in trying to achieve that based on rebalancing my 401K account.. As I stated earlier I am already at $500K.

Is there a tool or spreadsheet app that someone has developed where I can project what my retirement account will be based on investing in certain funds? I am trying to do some comparison as I pick various funds to invest in to see what the numbers will be in 10 years based on the historical performance over the last 10 years for that fund.
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Old 08-28-2013, 04:53 AM   #44
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I really appreciate all the feedback from the forum members so far. Over the last several days, this forum has opened my mind up to asset allocation. I have been researching this topic a lot over the past several days.

Based on the information I have provided so far, my goal is to retire in 10 years. As you have read so far, I am pretty aggressive and my risk tolerance level is high when it comes to investing (maybe too high or stupid - all my retirement funds in company stock). I would like to break down my 401K asset allocation in 2 five year phases. Here is what I am thinking from an asset allocation point of view:

Next 5 years (2013 - 2018) Asset Allocation
- The investment goal is to be somewhat aggressive during this time period. The risk tolerance level will be medium to high.
- Asset Allocation (80% stocks, 20% bonds)
- 80% Stocks (US Large Equity Index (??%), US Mid/Small Equity Index (??%), International Equity Index (??%), Company Stock (10%)
- 20% Bonds (Not sure which fund(s) yet. I don't have many choices within my 401K plan to choose from)

Next 5 years (2019 - 2004) Asset Allocation
- The investment goal is to be less aggressive during this time period as I near retirement. The risk tolerance level will be medium to low.
- Asset Allocation (60% stocks, 40% bonds)
- 60% Stocks (US Large Equity Index (??%), US Mid/Small Equity Index (??%), International Equity Index (??%), Company Stock (10%)
- 40% Bonds (Not sure which fund(s) yet. I don't have many choices within my 401K plan to choose from.)

Please provide your feedback on my 10 year strategy and asset allocation options.
If I wanted to avoid investing in the bond funds for now, what other fund should I considered based on the options I have in my 401K plan. I believe I have some stable value funds in my 401K plan.. Please advise.
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Old 08-28-2013, 07:34 AM   #45
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I haven't been following this thread too closely, but there are some major tax advantages to hanging onto the company stock until you retire, correct? Have you looked into protecting that investment with puts? I've heard of people using puts to protect employee stock options that they can't yet exercise.

I'm no expert on this but the way I understand it is that you'd buy puts at a price that would put a floor on a drop in price, ideally covering all of your shares. Like all insurance, you hope you never need it and pay a cost just to have the unneeded insurance, but at least you'd be protected from the falls that hit Enron, Lucent, Cisco, etc. The things you'd have to look into are:

- Does your company allow it, since you are essentially selling short, even if it is covered?

- You still won't be diversified, but at least you are protected from the risks of a single stock failure. But if the stock is flat while the rest of the market rises, you aren't taking part in the bull market with most of your money.

- Is the cost of the puts worth the tax advantages? I don't know how much puts cost, and how much of a tax advantage you gain using NUA (which I'm not that familiar with), so you may find that just diversifying is better.

- Can you use puts to cover the 10 years you are looking for? I don't know how long the contracts go, but I guess you can just buy new puts as the old ones expire.
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Old 08-28-2013, 02:06 PM   #46
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If I wanted to avoid investing in the bond funds for now, what other fund should I considered based on the options I have in my 401K plan. I believe I have some stable value funds in my 401K plan.. Please advise.
I believe the stable value fund would be perfect for that. Probably no other option anyway.
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