by Donn J. Sinclair MBA – June 26, 2022
Asset allocation is the mix of investments you select for your IRA. Specifically, what share of your IRA portfolio do you have invested in stocks, bonds, cash, and any other asset classes. Your IRA could be a Traditional IRA, IRA Rollover, Roth IRA, SEP-IRA, or SIMPLE-IRA. Your temperament for risk should be a major criterion in your selected asset allocation mix.
Finding Your Mix
The asset allocation concept is relatively simple: Don’t put all your eggs in one basket. Sometimes, the implementation may be somewhat more complex. Your chosen asset mix for your IRA depends largely on your time horizon, your personal financial situation, and your risk temperament. Some personal financial considerations include: will you and/or your spouse continue to work seasonally or part-time during retirement; what are your retirement savings to date; the percentage of your retirement savings that are post-tax or are pre-tax(IRA, 401k, etcetera).