Ask Terry Questions Target funds

Target funds

By Terry Savage on June 17, 2024 | Financial Planning / Retirement

I understand from hearing you on the radio you are not a big fan of target funds. I retired 5 years ago and left my 401K with my previous employer and have it in a target retirement income fund. Given your advice, I am planning to transfer and reallocate to other funds available. I have earned 2% ytd and 8% over the last year. Losses are in the bond sector (30%). What is the suggested allocation for bonds? The rest of the asset class’ have been positive.
Also, what is cash in these accounts? I just want to leave some in cash. Is that money markets? Thanks much.

Terry Says

First, read this before you do a rollover, to avoid hassles: Rollover Now – Terry Savage

Then, when you get your money moved to Vanguard or Fidelity (per the article) it will all be in cash.  That’s when you have to start making some decisions.  You can either do it on your own — putting some in a Treasury money market fund, some in an equity/income fund, or balanced fund.  And my suggestion is to use a small portion, only about 20% in bonds, with a fund average maturity of no longer than 5 years.

Or you can use this opportunity, leaving the entire rollover in the money market fund, to contact a fee only, FIDUCIARY financial advisor, using the Wealthramp service:  Pam Krueger Wealthramp – Terry Savage

That will give you some help in sorting out not only your investments in your IRA, but your income and withdrawal planning, taxes, and more.





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