401K Profolio Rebalance

October 2, 2006 at 9:49 pm Leave a comment

After determined my monthly expense, then used this calculator to determine the maximum contribution  and still leave enough money in the paycheck to cover the monthly expense. Since I am suppose to get a promotion soon, I should be able to contribute a bit more. I decided not to because that affects other benefits. Pension, life insurance and long-term disability benefits are determined with after tax dollars; which will be less if I increase my 401k contribution.

This site suggested what I should do with the funds available through my company. Since I am still young, I want to invest aggressively. For an aggressive portfolio, the site suggested 20% in S&P 500 fund, 30% in Value Fund, 30% in small cap, 20% International Fund.

My company also offer a balanced aggressive fund, the expense ratio is low (0.10%) and its past 10 years performance have been consistently better than S&P 500 and small cap. Thus, I forgo S&P 500 and Small cap fund in favor of the balanced aggressive fund.

The value fund is the top performers among all the funds available to us, so I definite want this one in my portfolio.

The international fund did better than S&P 500 in the past years and I believe it still has more room for growth.

Today, I finally increased 401k contribution and rebalance investment selection. My final portfolio looks like this now: 35% Value fund, 35% balanced aggressive fund, 30% international, and all my company matching goes to company stocks (I have no choice. Company policy.)

Now I am done with re-balancing my 401k portfolio, I need to review my IRA portfolio this week.


Entry filed under: Retirement, Tax.

401K – How Much Should You Contribute? (Part II) Just Leave It Alone!

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