Hang on to what I have

[bybon]

Closing in on twenty-five years with a large Boston based financial firm. Preparing to retire in five to seven years. My position has morphed into something that I find more difficult to get excited about. I am hoping to retire when I turn 62, am 55 now. Not an early retirement, but want to make sure my position is well thought out. My particulars are: 1.1 million in a 401k, about three-hundred thousand of equity in my home, and one teen planning on going to college. There is about fifty thousand in his college savings. Annual pay is one-hundred and thirty thousand. Bonuses and 401k match adds another fifty to sixty thousand a year. My 401 contribution is seventeen percent, six percent in catch-up and another six percent in a Roth. The largest expense presently is private school for the youngest one. The company offers a myriad of plans to place one’s 401k depending on level of risks and rewards. My 401 is positioned as aggressive: sixty percent domestic stocks, twenty percent bonds, fifteen percent foreign stocks and five percent short term. This is the list.
1. FCNKX 28% STOCK
2. FDGKX 12% STOCK
3. FSLCX 10.5% STOCK
4. FDIKX 8.25% STOCK
5. FXSTX 6.75% BOND
6. FGMNX 6.7% BOND
7. FKMCX 6.4% STOCK
8. FDFKX 6.8% STOCK
9. FLPKX 6.3% STOCK
10. FAGIX 5% BOND
11. FINPX 3.2% BOND
Among the choices I see that may be of more interest to me are a conservative mix, a balanced mix and a short-term mix.
The conservative is 50% bonds, 30% short term, 15% domestic stock and 6% foreign stock.
The balanced is 35% domestic stock, 40% bonds, 10% short term and 15% foreign.
Short term is of course 100% short term.
The last two seem to offer me more of what I want: to preserve what I have. I was also thinking I may not need to have so much coming out for the 401k. Instead, if I am able, to see about increasing what is put into the Roth. I imagine it is not a real difficult stretch to know where I work. If I am able to clarify what I have posted to better define something, please ask. Thanks.

 

[pb4uski]

Below is a pretty good guide to what your AA should look like IMO:

Since you're retiring in abut 7 years (2022) look to the 2020 or 2025 funds as sensible target AAs and design your new money (401k contributions) to get you from your current AA to your target AA at 62.

If you have access to a stable value fund, that would be a good option for fixed income until interest rates normalize.

 

[wingfooted]

My comment is that you need to have at least some portion of your net worth in after tax investments.

Why is all in 401 / Roths ?


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[kimcdougc]

wingfooted, Roths can be used like a cash account if needed.

 

[Markola]

Is the Roth contribution to a Roth 401K or Roth IRA? If the former, I'd have guessed the poster would have already maxed his 401K and couldn't give more to it and, if the latter Roth IRA, isn't poster's income near the limit? I'm no expert, clearly, just curious.


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[bybon]

Thank you for the responses. Because of your suggestions, I am running different scenarios. I am maxed on my 401 and am doing six percent to a catch-up. Seven percent is going to an after tax Roth. As far as I can figure it is a Roth IRA.
The plan that seems to match my very conservative and risk intolerant (aversion) is:


domestic stocks- 21%
foreign stocks - 9%
bonds - 50%
short term - 20%
I am looking for a means to preserve what I have (even during the worst of times) while still keeping inflation at bay. Thank you.

 

[pb4uski]

On the bond side, make sure you know what the duration of your funds are.

 

[bybon]

Pb4uski thanks. Will ask them directly

 

[cnocmmz]

Closing in on twenty-five years with a large Boston based financial firm. Preparing to retire in five to seven years. My position has morphed into something that I find more difficult to get excited about. I am hoping to retire when I turn 62, am 55 now. Not an early retirement, but want to make sure my position is well thought out. My particulars are: 1.1 million in a 401k, about three-hundred thousand of equity in my home, and one teen planning on going to college. There is about fifty thousand in his college savings. Annual pay is one-hundred and thirty thousand. Bonuses and 401k match adds another fifty to sixty thousand a year. My 401 contribution is seventeen percent, six percent in catch-up and another six percent in a Roth. The largest expense presently is private school for the youngest one. The company offers a myriad of plans to place one’s 401k depending on level of risks and rewards. My 401 is positioned as aggressive: sixty percent domestic stocks, twenty percent bonds, fifteen percent foreign stocks and five percent short term. This is the list.
1. FCNKX 28% STOCK
2. FDGKX 12% STOCK
3. FSLCX 10.5% STOCK
4. FDIKX 8.25% STOCK
5. FXSTX 6.75% BOND
6. FGMNX 6.7% BOND
7. FKMCX 6.4% STOCK
8. FDFKX 6.8% STOCK
9. FLPKX 6.3% STOCK
10. FAGIX 5% BOND
11. FINPX 3.2% BOND
Among the choices I see that may be of more interest to me are a conservative mix, a balanced mix and a short-term mix.
The conservative is 50% bonds, 30% short term, 15% domestic stock and 6% foreign stock.
The balanced is 35% domestic stock, 40% bonds, 10% short term and 15% foreign.
Short term is of course 100% short term.
The last two seem to offer me more of what I want: to preserve what I have. I was also thinking I may not need to have so much coming out for the 401k. Instead, if I am able, to see about increasing what is put into the Roth. I imagine it is not a real difficult stretch to know where I work. If I am able to clarify what I have posted to better define something, please ask. Thanks.

Is there a guarranteed pension some place in there

 

[bybon]

I do not believe so. The company did away with that a number of years ago. The monies involved were reallocated to existing 401k funds.

 

[bybon]

My mistake. When the company decided to stop their pension plan, all the money in the plan went into an annuity. Monthly payments of 1000.00 a month. However it does not tell me what duration or how it was calculated.