Yes. 100% equities would be reasonable (meaning, changing all your target date funds to 100% equities for now) given that a lot of your "fixed income" is your cash in taxable. Generally you should decide what level of equities you are comfortable with (say, 90%) and what level you would like in retirement (say, 70%) and transition over time as you approach retirement. In that example you could transition to 80% equities at 5 years away and 70% at 1-2 years away.2. Investment Allocation (Vanguard 401k and IRA)
I have catching up to do and am comfortable with an aggressive allocation given my potential pension (Scenario 1) and long time horizon for my bond allocation.
Overall Desired Asset Allocation: I am considering ∼80% stocks /∼20% bonds/reserve.
Question D: Given my situation and comfort with risk, is 80/20 a reasonable target? I’m currently at 70/30.
Holding bonds a ways prior to retirement will reduce your likelihood of retirement success (not by a lot necessarily, but still) so ideally you transition close to retirement.
What is typically recommended is the following (in order):Tax location:
Question G: Given my multiple accounts (Taxable, Pre-Tax, and Roth) and my desired stock/bond allocation, how should I strategically allocate my Bonds vs. Stocks across these accounts to achieve optimal Tax Location? Should I even try this?
1) All bonds in traditional 401k
2) Fill up Roth with highest-returning equities (or any equities that are tax-inefficient, like REITs)
3) For leftover equities, fill up tax-sheltered first and then taxable. Whether you should put international in taxable or tax-deferred depends on your individual tax situation and what funds you choose to hold; tax-managed international funds or developed international funds should typically go in taxable over US funds, emerging market funds in tax-sheltered, total international is more tricky
This takes math, as well as considering the amount you need to live on in retirement (and how you'll get that money) but for any given investor there is a certain % of annual contributions that should be Roth over traditional. There are spreadsheets that can help you with this but it is complicated, especially as the number may change annually. A simple, if perhaps less optimized approach, is calculating how much your annual salary is under the cap for the 22% bracket, and just contributing the amount difference to Roth instead of traditional. Alternatively, if you expect low costs in retirement, you could make several decent-sized conversions after retirement and pay the taxes out of your taxable holdings.Roth Conversion:
Question H: Given my current 22% tax bracket and the potential for a large Traditional balance in retirement (leading to high RMDs), should I consider a small, annual Roth conversion? If so, what is the optimal annual conversion amount to stay within the 22% bracket (or fill it up)?
Just as a note, holding a 17-month emergency fund in a taxable account is not "optimal" from either a tax perspective or return perspective, though if you prefer to do that, that's OK. It's recommended that your total cash holdings be less than 10%, and ideally less than 5%, of your investment assets, and if you want more than that, you may consider reducing your bond holdings a good amount.
Statistics: Posted by breakfastinbed — Sat Nov 15, 2025 11:11 pm — Replies 3 — Views 399