The Investment Thread

SteveSBrickNJ said
My "fixed" is a pot of money that can never lose principal and is earning money at a 3% rate.
If it is helpful for you to help me.... here's my situation... I'm paid each month on the 15th and the 30th.
Each time I'm paid, $375 of my pay is directed as a contribution to my 401k. Until yesterday, 50% of my contribution was always allocated to the Science & Tech and the other 50% was allocated to the fixed.
Yet yesterday, I called the company ( Corebridge Financial / AIG ) and changed it for the future. My future contributions will have 75% allocated to the fixed and only 25% to the Science & Tech.

Thanks.... please keep in mind I'm not a financial advisor, just a guy on the internet, so apply your own analysis as appropriate. I think your plan is fine, but a bit on the conservative side - howevver I prefer that to some people I see who are nearing retirement but are almost 100% in stocks - that seems like a recipe for disaster.

The main things to think about are, if the bulk of your investments are only earning 3% is that enough for you to live on in retirement? If so, then stick with that for sure. There was a general rule that you should only withdraw about 4% of your retirement account every year... so if you have a million in the retirement account, you withdraw $40K.... theoretically that is supposed to last you forever. I think that's still a pretty decent rule.

So then think about how much you are going to need per year in retirement (factoring in probably increasing medical bills) then figure out what you are getting from social security and any pensions, any difference is what you're going to withdraw from your retirement plan.

For your stock/risky side, I'd consider mixing that money into a number of different funds. Science/Tech is generally good for long term growth potential, but as you can see you can hit patches where the whole sector is down for extended periods. You might want to add in something like healthcare (we're getting older as a population meaning more need for healthcare services, so decent long term growth prospects), etc...