“Should I go all in on VTSAX/VVIAX to make some ground?”: Just starting my 401k at 35 with a family to support. How can I maximize my investments for a secure future?

Hey Money Minder,

So, I’m 35 and just getting started with my 401k. Want to try and “catch up” if that’s even a thing…

I’m married, my wife also has a 401k, and we have a 3.5-year-old kiddo.

My salary ranges from $135k to $150k a year. I’m planning to contribute 6% (with my employer matching 100% of the first 3% and 50% of the next 2%).

Do you think going all in on VTSAX/VVIAX is a good way to make some progress?

Here’s how my portfolio currently looks:
1. U.S. Stock Market (50%) – VTSAX
2. U.S. Large Cap Equity (30%) – VVIAX
3. International Developed Equity (10%) – VTMGX
4. Emerging Markets Equity (8%) – VEMAX
5. U.S. Bonds (2%) – VBTLX

Thanks for your advice, Money Minder!

Seeking More Growth

Response from THE MONEY MINDER:

Hello There,

Congratulations on taking the initiative to start your 401k at this stage in your life. It’s never too late to begin investing in your future, especially with a solid income like yours. With your employer offering a match for your contributions, you are already ahead of the game.

Given your age, income, family status, and desire to “catch up” with your retirement savings, it’s essential to have a diversified portfolio that aligns with your risk tolerance and long-term goals. While VTSAX and VVIAX are both solid options for U.S. stock market exposure, it’s crucial to consider diversifying further.

Including international developed equity and emerging markets equity in your portfolio can provide additional growth opportunities and reduce risk through global diversification. The allocation to U.S. bonds can also help balance the overall risk of your portfolio.

Rather than going all-in on one or two funds, consider the percentages you have allocated for each asset class and make adjustments based on your risk tolerance and investment horizon. Rebalancing your portfolio periodically can help ensure that your investments stay aligned with your goals and risk tolerance.

Remember, investing is a long-term journey, and it’s essential to stay disciplined and consistent in your contributions and investment strategy. Seek advice from a financial advisor if needed to ensure your investment decisions align with your overall financial plan.

All the best from THE MONEY MINDER.