"Whenever someone comes into money or earns money, there has to be a decision on how to best allocate these funds. It doesn't matter if you are young and just want to earn for decades or if you are close to retirement and want to maximize passive income, you have to do something. What they have done is look at the fees across a bunch of indexes and have determined that trading in the S&P 500 is the lowest."
"At the very heart of this discussion around putting everything into the S&P 500, the Redditor has a target retirement date of 2050. On the plus side, they are looking to continue maximizing their account for the foreseeable future. While they say they will likely make some shifts in how their portfolio is outlined by 2040, the focus is really on the here and the now."
An individual with a $35,000 401(k) is considering allocating the entire balance to the S&P 500 and plans to reassess life goals after aiming to make significant gains by 2040. The individual targets retirement in 2050 and intends to keep maximizing the account in the near term. Fee comparisons across several indexes showed S&P 500 trading costs as the lowest. The individual acknowledges not being a financial expert and prefers a passive approach. The situation raises considerations about concentration risk, diversification, fee sensitivity, time horizon, and planned portfolio shifts before retirement.
Read at 24/7 Wall St.
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