Over the years, I have found that many investors tend to regard their various investment programs, such as:  401(k)s, Traditional and ROTH IRAs, 403(b)s, etc. as separate entities.  Now, they must remain separate in the sense that each may be a separate source of retirement income, whether you are still contributing to them or not.  But, when you do retire–if you haven’t already–they would all be a source of retirement money, in addition to Social Security, pensions, private savings or investments, etc.

Generally, you should want to have a combination of stocks, bonds, cash or other securities which combine those instruments.  When you are younger, and have many years to work and continue setting money aside, the emphasis should be on stocks so that your nest egg may grow for the future.   And over time, the mix of securities should be modified, from time-to-time, to shift a higher proportion into bonds, for stability.  That stock-to-bond mix should also reflect your personal risk tolerance.

It would be mind-boggling to try to individually balance each and every one of those individual pockets of invested funds.  So, you might have more of stocks in one program and more bonds in another.  Likewise, as you added to one program, you might have been adding to a global fund, and perhaps to technology or utilities as you made a contributions to others.  Also, if you have multiple employer-sponsored plans in your portfolio, consider consolidating them or rolling one from a prior employer into your IRA.

NOTE:  In the next Investor Boot Camp blog post, I will explain balancing your portfolio in more detail. There is more to it–if you wish to do it right–than some people might think.



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