This week, I’m talking about index card personal finance. I’m summarizing the best advice on personal finance and sharing with you what I would squeeze onto a 3x5 index card. 

Today’s rule is to stay invested for growth for the long-term.  

I have about 25 401k plans as clients, and part of my job as the advisor to these 401k plans is to hold employee education meetings, twist people’s arms about saving more, and meet with people individually to address their unique needs when it comes to saving for retirement and balancing that with all of their other financial obligations and priorities. 

One of the biggest issues I see behind employees not saving enough for retirement, is a a 401k portfolio that is inappropriately invested. At the extremes, I’ve seen 20 somethings with everything invested in cash who have no hope of long-term meaningful growth, to 60 somethings with everything in the stock market, desperate to catch up and take on more risk to make up for lost time and being behind on their savings.

So it’s absolutely critical that you have the right mix of stocks, bonds, and cash in your retirement portfolio. The general advice for 20, 30, and 40 somethings is that you need to maximize your growth opportunities by maximizing your stock exposure. Once you hit 50 and retirement inches closer every day, the portfolio mix needs to be fine tuned and regularly reviewed to ensure that you have the right balance of stocks and bonds for your age. 

If you don’t know what your target asset allocation to stocks, bonds, and cash should be, I’m happy to share with you the age-based asset allocation cheat sheet that we use as a starting place with our clients to determine the right target for each client. I’m happy to share it with you for free. Just send me an email - [email protected], that’s [email protected], and I’ll send along the cheat sheet so you can figure out the asset allocation that’s right for you. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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