Need answers on asset allocation

[jdehaan]

Have 401K valued at near $700,000. About 60% equities ($420,000) and 40% cash/bonds $280,000).

I am 51 years old. Following traditional wisdom using the 110-120 rule, I should have about 31-41% of my portfolio in cash or bonds. My question is... if you subscribe to this method of asset allocation, should I also be including my cash balance pension in the equation? this has a value of $290,000. So should I really be saying I have a portfolio of $990,000 with $570,000 in cash/bonds.... If yes, then I am seriously over weighted in cash.

 

[REWahoo]

...should I also be including my cash balance pension in the equation? .... If yes, then I am seriously over weighted in cash.

In my opinion, yes, and yes you are.

Since opinions vary, others will be along shortly to disagree.

 

[ziggy29]

I think you should consider the cash value of your pension as part of your bond allocation, yes.

 

[yakers]

Well, yeah, sort of. I have a COLAd pension but our AA is still something like 60/40 but we will start withdrawals in 2010 so I don't want to go too far into equities. This relatively conservative position helped in the last year (18% loss) and AFAIK anything from 80/20 to 20/80 have somewhat similar risk/return. So how much you want is up to you as long as you don't go 100% in either direction.