Quote:
Originally Posted by jkp41
I am changing jobs in September, and I am using this as an opportunity to step up my skills with my investing. I have been investing in a few relatively small posotions over the last few years with a Schwab brokerage account, but nothing near the money that is in my 401k that I will be moving into my rollover account. For simplicity's sake, lets round out numbers and say that I have $10k in my Schwab account right now, and will be moving $100k into a rollover.
My new job will have a 403b with a 3% match, and I will utilize that match. I filed for taxes for the first time since being married and found out that I can now utilize a roth rather than being over the income limit. I will max that out yearly. I'm 32, and would like to retire around 55
In my Schwab account, I currently have postions in:
MO - biggest position
PEP
XOM
F
T
MCD
EXR - very small position
So I have several questions about the best way to utilize the 401k money:
1. At this point should I be looking into bonds at all or is that something that should wait until I am closer to retirement and looking for stability rather than growth?
2. Should I be concerned with scaling into positions with this, or should I buy new/expand current positions with the majority of the money?
3. If I scale in, what strategy do you guys use in parking the money until you put it into a more permanent position?
4. After the Roth and 3% match for the 403b, I will have roughly $1000/month that I am designating to retirement. Should I max out the 403b or put that money into my brokerage account. I'm assuming the 403b will be mostly mutual funds, and I would have more control with the brokerage account.
Edit: I just realized that this was my first post here. I have been lurking too long!
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Here's my 2 cents worth, but remember it's free and you get what you pay for
1) Personally I think you're too young and 23 yrs out at least is too long to even worry about bonds in my opinion. T pays more than most bonds just in it's dividend.
2) See answer 1 but I would favor strong companies you are comfortable with that have taken a dip based more on overall market conditions than their own individual fundamentals. Scaling in, or "dollar cost averaging" is never a bad idea. Also, read this article:
http://www.marketwatch.com/story/how...rly-2016-01-25
3) Personally, I've learned to always have some cash on hand for when we have these sudden dips that really aren't based on much of anything concrete. I don't use it but HYG is a popular bond ETF for storing cash, it's not the most conservative though nor without risk. On the conservative side, T-Bills may or may not do much for you, depending on how much cash you are parking, to even be worth the trouble, but they are safe.
4) Max out any free money company match 1st, then max out Roth contributions, then go back to 403b and max that out (like most plans, it probably doesn't have very many or very good choices).
BTW, changing jobs is a perfect opportunity to swap out of a limited set of poor choices in a 401k and into a Rollover IRA with unlimited choices without paying a penalty. That was a great move and most people don't even know they can do this. My company was sold and I didn't change jobs but it allowed me to do this too!
You're just fine tuning at this point so don't lose any sleep, you're doing it right! Good luck!