Tuesday, July 26, 2016

Financial Housecleaning

So in another week or so my birthday will wind around (I like birthdays, they are a sign of accomplishment of living another year). This one is pretty notable as it will be my 40th (crazy to me... I know I just said birthdays are accomplishments but... It is hard to believe we are more than halfway done with 2016 already).

One thing I like to do is step back and look at my financial state (I read blogs like this (which address how you should be investing at certain ages) and use tools at Personal Capital, like their retirement calculator. As I get older and the target window for retirement (I am planning on a hard stop at 62.. that's when I can start drawing my full FERS retirement from my government job). I will give an example of what I just did for my Thrift Savings Account (TSP, 401k for the US Government workers), without any real dollars behind it (I overshare a lot between social media and whatnot, but I have not reached the point of sharing my net worth with the world... I think the only person other than my wife that knows my full net worth is my broker team at Personal Capital (that and Google... but they swear that they won't do evil)).

At the beginning of the 2016 it was 40% C, 15%G, 20% S, 25% I. In March I started the long road to more stable assets, with the plan to decrement C, S, I (subtracting C twice) and slowly build up G and F every six months. So now I am at 38C, 16G, 1F, 20S, 20I. Adjusting both the contribution amount as well as the actual balances. I also did the same with another account (Betterment)  decreasing my total exposure to stocks by 2% there (with a bump in bonds to compensate).

Yes, I know that swinging slowly to more stocks will decrease my potential gains, but it also decreases my total risk exposure, which at this point in my life since I have been a prolific saver overall (not as good as I could have been but I also lived life) means I have a fairly large amount to protect.

So overall, birthdays are a good time to reflect on the past and plan for the future.