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How do I rebalance this??

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  • How do I rebalance this??

    Currently have 60% of retirement assets in a 401k, 30% cash balance and 10% Roth. 10-15 yrs away from hanging it up.....looking at 70/30 equity bond split. My Roth's are at that 70/30 split, so not really part of the problem. Contributing 45k/year into 401, 100k/year into cash balance. The cash balance plan is very conservative, primarily bond funds with a consistent 3-4% return over the last 8-10 years. I obviously have no control over that account.. So, I have my 401k almost entirely in equities...cheap index funds, in an attempt to keep my 70/30 allocation working. When the next bear market hits will not be able to do anything but keep adding the 45k/years to the equity pile. And, when my tuition load falls off next year will crank up the CB to 240k. Reasonable plan? , or should I keep a 70/30 balance in my 401 and just roll the CB in when I retire and rebalance then??

  • #2
    Your Roth should not be 70-30 split....

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    • #3
      401k and Roth 100% equities
      my radiology group is hiring, pm if you can do msk and are interested

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      • #4
        That's why I asked.....Good point about the Roth accounts, should move to 100% equities, then when they take my scalpel away can rebalance them to something more averse to sequence of returns issues should I ever need to tap them. But in the meantime I'll take the advice thanks

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        • #5
          I knew Peds would say that! He is correct. Roth has a very long time horizon + they are never taxed again = tax free growth, so most keep equities in there. Not having any control over an account is a crummy deal. I had that in a prior job. I was grateful for the extra cash, but I think not having control is suboptimal. I would ask nicely what the deal is with that and if it is possible to change it.
          Being in mostly bonds for the last 11 years seems silly for a doc with 15 years left of high income, because your human capital is very bond like. 70:30 might be ok for you now, but 10 years ago, with 25 years to go until retirement you would have benefited from 80+ % stocks.
          Regardless, Roth = stocks , for most here.

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          • #6
            I have some VWEHX (Vanguard High Yield bonds) in my Roth, but I think I am closer to retirement than many here.

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