LSAMPLE ANSWERILLUSTRATIVE
THE SHORT ANSWER
I’d use new contributions to bring stocks from 88% toward 75%, rather than sell everything at once. The age-60 plan still works in this example at 75%. Your main issue is overlapping funds holding the same large companies: owning more funds hasn’t spread the risk as much as it looks.
KEY NUMBERS
Stocks now88%
Three-year target75%
Years to retirement16
WHAT MATTERS
- Several funds hold the same large companies, so the portfolio is less diversified than the account count suggests.
- New contributions can do most of the rebalancing without selling taxable holdings.
- The goal does not require taking the maximum possible risk.
POSSIBLE NEXT STEPS
- Direct new workplace-plan contributions toward bonds and broad international funds.
- Review overlapping holdings before adding another fund.
- Each year, check how a 25% stock-market drop would affect the age-60 plan.