401k Fund Contribution (math question)
  • So I feel this should have an easy math answer, but Im just not seeing it. So I find myself taking the long-about way to solve it. The problem is over the next two years I plan to not contribute another dime to my bond holdings. My 401k is currently allocated:

    50% Total Stock (2 year target 55%)
    15% International Stock (2 year target 20%)
    35% Total Bond (2 year target down to 25%)

    So what should I set my contributions to so I hit my targets? What Ive done (and why Im asking because feel there is an obvious and easier way)... Assume 100k portfolio and 50k contribution over the next two years (includes matching and bonus), also 0% ROI to keep things "simple". So 100k would have allocations 50k, 15k, 35k. In two years 150k total
    55% - > 82500 (32500 increase or 65% of the 50k contribution)
    20% -> 30000 (15000 increase or 30% of the 50k contribution)
    25% -> 37500 (2500 increase or 5% )

    See the problem? It still has me contributing to bonds. Ideally I would like to grow the stock funds together... 51% and 16%, 52% and 17%, etc. which is why I put the targets each 5% higher..

    Suggestions, welcome.. Thanks
  • Seems like you are over thinking things? Just contribute to your stock funds and rebalance once a quarter. Having a couple percentage over or under your target isn't going to be a big deal.

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