A substantial amount of our net worth is tied up in Jay’s 401K. He puts in just enough to maximize his company match. It’s been years since he originally picked the funds that the money is allocated to and it definitely needs to be rebalanced. About 63% of the funds were in one of the riskier, aggressive stock funds.
So, at the beginning of the year we specified that all new contributions go into Vanguard’s 2025 Target fund. We also moved about 15% of the existing funds out of the aggressive fund into the Target fund. And we’re continuing to do this on a weekly basis, moving a small fraction so that by the end of the year another 15% will have been moved.
We picked the 2025 Target fund even though Jay is probably going to retire closer to 2020. But we don’t expect to need the money until 2025. Also, there’s a chance that he’ll keep working past 2020, especially if he can find a way to take time off without pay. If, however, it starts to look like we need an even more conservative position, we’ll move the funds from the 2025 Target fund to the 2020 Target fund.
Rebalancing his 401K has been on my To Do list for awhile and I’m really glad we’re finally taking action.