I'm probably not a good person to ask because I have a very high risk tolerance. For my entire working career, I never owned a bond and was 99.99% stocks. It paid off really well, because I think stocks have consistently outperformed bonds for that entire three or four decade run. (Someone might want to check my math on that, but I'm sure overall it's been better.) I always had the philosophy that I had a long enough time Horizon that I could ride out any downturns and would just take the Investments with the better average long-term returns.

2021 was kind of painful, because I was really close to retirement and still in 100% stocks and they tanked. I realized at that point that I probably should become more conservative. I got lucky at that point because CD rates went through the roof, so I just put a bunch of money from stocks into cds. I just don't quite understand bonds enough to figure out why I should have them.

I may start figuring it out and going with more bonds going forward since I'm actually retiring now. But a lot depends on life expectancy. If you're 65 years old and you're planning up to age 90, that's still at 25-year time Horizon for investments. Just have enough in conservative stuff to last you for 2 years of living expenses in a downturn, and keep the rest in stocks. At least that's my philosophy.

So my bottom line is that I would go 100% stocks in your situation, but recognizing that I have a really high risk tolerance for these sorts of things.
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There’s a lot of unknowns here and it’s not like you’re 20.

Here’s my position based on what you have posted here.

Like RainMan said, what hurts is if it draws down close to retirement. And if you want to really hit returns, you need to be in stocks and you need to let them run. In order to do that, IMO you have to have pretty sizeable cash savings to keep the heartburn down when the S&P drops 1%. Here’s what I’d recommend in your case

1. Make sure all consumer debt is eliminated. I’d listen to a car, but if you’re really trying to increase equity, car payments are a lot.

2. Put aside 6 months living expenses in a safe account. (Not stocks). Most brokerages have a money market that pays well. That’s where mine is. If you have something that comes up, you can swing it easy. And it’s also hard enough to get to that you won’t just blow it. It’ll get a return and if you don’t use it you can take the money that earns and put in stocks, but I think it’s important to have a chunk of available cash if you’re going to eat risk.

3. Put cash in the market. If you have a 401K at the job, put it there first. The tax shelter matters. The limit at your age is 30,500 if I’m reading that right. Your wife if she’s working will have a similar limit. If you’re eligible for an IRA, put it in there next. Then open a taxable brokerage, and there are no limits on those.

If you want to follow S&P, I’d do VOO. It follows it directly and the expenses are lower. If you’re only going to own one thing my vote is VOO. Here’s where my stuff is (not an advisor):

Of every dollar I contribute:
37.5% VOO
37.5% VUG (more volatile than VOO but has a higher historic return)
25% SCHD (won’t return like the other 2 but is a more stable set and has a good dividend that is a different batch of stocks than the S&P somewhat.

No rebalancing. I have a small amount in some stocks I like but almost all goes into the above.

I’d stay out of small and mid caps at your age.

There are a million other components to make a real world recommendation but that’s probably close to what I’d do if I were you.

A big part of investing is being OK with it in your dime. If you’re going to put it in and get heartburn about it, take it back out and put it in the target date fund. If it’s going to cause discomfort, it probably won’t work over the long term. My solution to that is cash holdings for “in case shit” money. Sometimes shit happens. If I’m prepared for that, it’s helped me worry less about my stock holdings.


I think what he has is a target dated fund which doesn’t adjust individually.
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I find some of the Target Date funds too conservative due to what Rainman mentioned. Most people are going to live way past retirement date if they're 55+ and relatively healthy.

2 things with your plan:

1. You're swtiching from a portfolio of All World stocks to only the US stock market. The US stock market has done very well the last 15 years. It's less diversification though so just fyi.

2. If you were 43 this plan would make a lot more sense than 53. As Rainman points out, you start to run into Sequence of Risk Returns where if you're concentranted in any one thing, particularly US stocks, there could be a long downturn right as you need to retire. You didn't really mention when you switch back out of 100% VINIX or what the plan was.. The Target Date fund kind of handles that for you.
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This is all very helpful. Thank you.
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Thats why I asked

I literally have the Vanguard Target 2035 fund and can adjust the % so figured Schwab might offer a similar product
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I'm not following the point of a target date plan if the allocation can be adjusted. If you're doing that, just buy index funds and decide what you actually want.
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Maybe it’s the wording but it’s the ability to adjust the asset mix within the fund or rebalancing
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Great advice going on in here!

Let’s hope we get the market ripping to all time highs again soon!
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Really? Mine in my IRA doesn’t.
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IDK maybe its plan specific but I've adjusted my 2035 target fund asset mix

From a company 401k standpoint, you pick it when you're in your 20s, so 2035 sounds good even though I'll still be in my 50s because what the fuck do I know at 25. So the fund rebalances to market conditions for the target but also allows me to adjust as my life progresses

Maybe I'm misreading the original ask but it sounds like 2035 might not be enough so the choices are managing it yourself or working within your fund, if it allows it, to adjust your asset mix
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Yeah, you're at the age where you have to minimize the risk to the portfolio. IMO, with these wild swings we're seeing in a scared market, well, it isn't worth taking the chance of another 2008.
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He’ll need to go the stocks route if he wants any hope of doubling his account twice in the next 15 years, though.

He’ll have to get very lucky but I believe he’d need an average of 10% return per year in order to double your investment in 7 years.
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Message is plan sooner, don’t wait and try to play catch-up needing “for sure gains” to meet your needs.

I save planning for 6% return. If we get another lost decade for stocks, 6-8% return is much more likely.

If I get 10% return over next 2 decades, I’ll be so set, but I don’t plan on that.
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I'd disagree.

He reasonably has a 30 year time horizon. He's at the age where you typically start ratcheting down risk a bit, but 10+ years out from retirement isn't unreasonable to keep risk in the market.
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Agreed.

He also did say that he’s contributing $30k per year to his 401k so I’d imagine that will do a lot of heavy lifting in the effort to double the investment.
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