Here is what I am looking at. I'm currently putting 7.5% of my pay into my 401k (including match), and going to start putting 7.5% of take home into a Roth IRA. The IRA contribution would not reach the max. So, effectively saving 15% of my income. I'm going to keep 3 months worth of expenses in a checking/savings account (me, wife, two youngsters).
Here is what I have left over: $60k in savings and ~1300 shares of BXS stock. I want to allocate 26% in bonds and 74% in stocks. (I'm a 26 y.o. btw). So I'm looking for the B&I for advice and suggestions.
Should I take some of that 60k and max the IRA?
I want the stocks to be dividend heavy so that I can reinvest the dividends. Should I just stick with some ETFs, or try and go about buying individual stocks with no-fee DRIP programs? (I also like the idea of going full bore and researching companies and pouring over 10k to find the best ones, is that weird?lol)
What should I do with the BXS stock? Sell it? Keep it? It is nearly at the all-time high, and the dividends aren't that great relatively.
Any bonds you suggest I look at?


Basically what is boils down to is that I have 100k to invest for retirement. What would you do with it?

lottery tickets.

Now what would others do?
A good percentage in a highly rated morning star fund
Some in savings.
The rest in indvidual stocks.

How much money do you need to feel comfortable having in the sidelines (emergency type cash)?

I would max out those ROTHs if at all possible.

I'd also be tempted to take your winnings from the stock and find another value-buy that drives some good dividends as well like you're interested in.

I've even been a proponent in certain situations of reducing 401k contributions (not below the matching level...take ALL the free money you can) in order to get ROTHs maxed out.

Also, I don't know your specific situation obviously, but your bond/fixed income exposure might be a little high, especially if that's money that's earmarked for retirement (35-40 years down the line)

FCNTX
set and forget

at your age i'd be about 95/5 stocks/bonds

What is the nature of your BXS holdings?

If that's your employer I'd suggest limiting your exposure.

If you bought it for fun and are happy with your return, sell and try again with another stock.

If you don't need the money and are happy with your diversification, hold it forever.

thisguy05 said:

---

What is the nature of your BXS holdings?

If that's your employer I'd suggest limiting your exposure.

If you bought it for fun and are happy with your return, sell and try again with another stock.

If you don't need the money and are happy with your diversification, hold it forever.

---

BXS comes from my grandpas trust. I am extremely lucky that he bought stocks in a bank in Nacogdoches that got bought out by Bancorp in the late 80s. And even more lucky that he passed down everything to us grandkids. When the trust split up a couple years ago I just held onto the shares because I wasn't sure what I wanted to do with them. Now I'm thinking about selling to help diversify my overall standing.

TwoMarksHand said:

---

Should I take some of that 60k and max the IRA?

---

Yes. Not only yours, but your wife's.

• 401(k) to employer match
• Fully fund Roth IRA
• Fully fund 401(k)
• Taxable

Free money first, Roths grow tax free and 401(k)s contributions reduce your MAGI and you tax arbitrage in retirement.

I don't like the boiler plate recommendations of having a percentage of your retirement portfolio in bonds equal to your age. I think you can be a little more aggressive and you have to look at your complete picture.

Also, when interest rates start to rise the high dividend stocks will (IMO) take a hit unless they can stand on their own merits without the dividend. But, if they could they would probably be a lot higher. I say this as a holder of such things as F, GSK, GE, VZ and so forth. So, I'm riding the dividends & reinvesting but I'm considerably older.

If the market does go down you hope the dividends will provide a floor for those stocks but then you may be concerned the dividend will be cut.

Also agree that 26% bonds is way too conservative at age 26. A time-adjusted fund like Vanguard Target Retirement 2055 is only 10% bonds right now. I'd agree with ac04 that holding 5% bonds is more appropriate. I'd put the other 20-21% in a low-cost index fund like VTSMX, VFIAX, or equal.

I just turned 28 and have all my accounts set up with a 95/5 AA.

The HSA advce is great but make double sure you have access to an HSA and not a fsa.

Read 3% signal by Jason Kelly to help figure out your stock/bond allocations. I would avoid target retirement funds as their fees are usually stupid high. Don't just sell the stock because it's at a high...put a trailing stop on it with a GTC time limit and forget about it.

Yes- make sure a HSA. Other way you would be potentially throwing money away.

WT1025 said:

---

Read 3% signal by Jason Kelly to help figure out your stock/bond allocations. I would avoid target retirement funds as their fees are usually stupid high. Don't just sell the stock because it's at a high...put a trailing stop on it with a GTC time limit and forget about it.

---

I think that's generally good advice for any mutual fund or ETF. If you're investing in an index fund these days, the expense ratios should be well below 0.5% with no load or commission. Vanguard, Fidelity, and Blackrock have really driven a ton of cost out of those funds.

I'm also not a big fan of target retirement funds, but there are plenty with very low fees. The Vanguard Target 2055 that I mentioned has an expense ratio of 0.16%. If you built that fund yourself, it would actually cost 0.161%. That's pretty dang low either way. If you had roughly $350K of assets, you could self-manage that down to 0.06% using the Admiral share class.

Note: not getting paid by Vanguard. Just using them as an example.