As for your planned asset allocation, it does seem significantly riskier than most that I’ve encountered, but as you’ve said, you do have a long period of time (decades, not years) to invest, more than enough time to ride out the small fluctuations and benefit from long term growth. If you’re comfortable with taking on the added risk (and, since you are talking about index funds, it’s not as if you’ll lose the entire investment because a few companies pull up their stakes anyway), then why not?

You said, “I hold $27,500 in an international equity index fund in a tax-deferred account.”

This doesn’t really tell me anything. International only means, “Somewhere other than the US.” With over 50% of your portfolio resting here, I’d take a close look at which countries you’re investing in, which industries, and which companies.

I personally like iShares Brazil (EWZ, NYSE). This stock provides a good way to invest
in a large basket of Brazilian commodities
and companies. Share price has gone up over 5-fold over the past 3 ½ years.

If you like indexes, I’d say you need to put some money in a commodity index, especially focusing on Agriculture. I’ve been telling my readers this for the past 3 years and it’s starting to pay off very big for them.

Also, with the instability that we’re witnessing in many paper currencies (see the Economist article at http://www.economist.com/opinion/displaystory.cfm?story_id=11409414), wise institutions and banks are hedging with a sizable portion of gold or silver — for an individual I’d say that at least 10% of your portfolio should be in hard assets like these.

You can put these hard assets right into an IRA or Roth IRA at http://www.everbank.com

That’s my two cents!
PF Wilson, Managing Editor, http://TheInvestorReport.com

My portfolio is constructed similar to yours except I have a mid-cap fund as well. I agree that having a small percentage allocated to bonds is wise even at a young age. It gives the portfolio greater diversification.

why do you say that starting a business was “stupid?”

It’s what I did and why I’m now “behind.” But over the long term, the chance for success on nearly every measure is much higher if I’m self-employed.

Though, as a side note, I’m not convinced that the make more money save more money requirement makes sense if you’re living well below your means.

SEP-IRA can be funded along with 401k and Roth IRA. Up to 12.5k a year, which is great.

Diversify! Someone knocked me in a prior thread with real estate, but, I still say own something. IRA/401k/CDs/stocks/ETFs/real estate/etc.

Also, why does everyone focus on retiring later. Live semi-poor now and save. Somewhere Trent posted the 50% rule, and that truly is something to take to heart.

Does this include your wife’s retirement and income levels? Most folks should do such an analysis both for themselves and for the income as a family. You could find that you are really counting on the spouse to save the lion’s share, and that may not be the best plan for your future.

These are a great option for anyone who doesn’t want to mess with manual rebalancing. The expense ratios aren’t much higher than other Vanguard funds, and definitely ridiculously lower than funds at other companies.

Vanguard’s 2040 Fund currently holds an aggressive 90/10 mix.

Anyhow, we’re on track for our retirement savings, with about 3.5 times my salary in retirement savings. We really invested a lot the first 7 years we were married, now we have a kid and my wife quit her job so we’re only saving a small percentage of our income for retirement.

Hopefully our big savings push early in life will give us the head start we need but the stock market dips keep eating away at our retirement accounts. Oh well, I guess we’re buying cheap :)

I currently have roughly $10,000 vested in my 401k as my only specific retirement savings. I also have about $10,000 in an online savings account for my emergency fund/save for downpayment. Now I’m thinking I ought to start a Roth IRA with a chunk of that (ok I’ve been thinking it for a while but just haven’t gotten around to it).

My base salary is about $47,000 and I’m 27 years old. That should get me closer to a schedule similar to Trent’s (which is as good a place to start as any).

large cap: 50%
mid cap: 15%
small cap: 10%
international: 15%
fixed income: 10%

Here is what Motley Fool (paid service) recommends for their most aggressive portfolio:

large cap: 50%
mid cap: 15%
small cap: 10%
international: 15%
fixed income: 10%

I believe if Trent considers his entire portfolio, and not just his retirement portfolio, then the numbers would be different, and he would have much less than 80% in stocks. Remember, he has a very sizeable emergency fund in cash (last I recall, about a year’s salary).

I personally am doing the same thing. I have 100% of my retirement portfolio stock mutual funds, but I have sizeable cash savings elsewhere that balanace out this over-weighting in stocks.