Dan Stewart

If you are simply buying and holding without any type of sell discipline to control drawdown risk, then moving a certain amount to cash might be prudent for you if it is scaring you too much.  Some things are not all about money, but quality of life.  So you could move all to cash or say, 50% with the remainder in the markets, or you could institute a strict sell discipline for all of your positions.

Be wary though because there are "indexed" annuity salesmen that will feed upon your fears promising you "most of the upside with none of the downside."  While it is true you won't get any of the downside, you won't get "most" of the upside either, and will likely get around 3% to 3.5% over time.  But you are locking in your money for years.

So with the 50-50 approach, you could ladder some CDs between 4mo to 18mo depending upon each months yield for emotional well-being.  Normally the discount brokerage firms get their inventory Monday afternoon or Tuesday morning depending upon the brokerage house.  If you wait later in the week, they will have already been picked over and you are better off waiting until early the following week.  You will make around 1.6%+ if done properly but you won't lose. There are even FDIC insured CDs that guarantee the principal but the interest crediting is linked to an equity index like the S&P but with a cap.  This is very similar to an indexed annuity but with no big surrender penalties, upfront hefty commissions, or salesmen. They are primarily for the fee based side of management but you need to shop & compare them.  And you would spread these out over 2 year, 3 year, and 5 year.  This way if the market goes up in the first two or even 3 years, but then goes down hard, you will make money on the first 2 and simply get you money back on the 5 year.  Conversely, if the market has a major correction early but then recovers, you get your money back on the 2 year, possible make money on the 3 year, and make money on the 5 year.  You could mix these various CDs with half of the money so that at the very least, you know that you will get your $400k plus some nominal interest.  Then with the other half, you could have a fairly conservative equity portfolio.

The other option is to have your portfolio actively managed by someone who employs a sell discipline thus limiting drawdowns.  They move a portion to cash, hedge, or a combination thereof during market duress.  You will not make quite as much as the index on the way up but have downside protection.  It is called risk-adjusted returns.  I believe you control risk first, and make the returns second.  Most of my clients are at or near retirement and cannot afford another 2008.

Lastly, the super-cycle of dropping interest rates from 1981 is over and rates are on the rise.  This means the bull market for bonds is likely over with the exception of a few short term "flights to quality" during equity market selloffs.  But the risk profile of longer term bonds is significantly higher than it was just a year or two ago.  So I do not subscribe to having a pie chart based upon your age & station in life and just holding on & hoping for the best because the risk profile of the assets themselves change over time.  So it is more about the risks in the assets than your "risk profile" which you intuitively understand based upon your question.  And with these artificially low interest rates, there is truly no such thing as "safe money" until interest rates rise and normalize, which will be years.  Again, this is due to the cost of living rising faster than the interest received.  I personally cannot just sit in cash & let my purchasing power whittle away for a slow, consistent loss (buying power).  I will, however, use cash as a defensive position during hard selloffs.

These are the things that you must think about and are strategy questions you must answer for your family.  For me though, I believe it is about strategy, not products or which funds. 

On a mechanical issue, you should almost certainly roll your 401ks into IRAs for a whole plethora of reasons - lower costs, virtually unlimited investment choices, more control especially on distributions, etc....  This would be true unless you have a complete wide open, full brokerage 401k and the employer pays all or most of the costs.  Most employees don't realize that they share on a pro-rata basis most of the 401k plan costs.  So if you have a bigger balance than most, you are paying slightly higher costs than most, and you are retired.  Therefore I would open up an IRA at a discount brokerage firm and do a Custodian to Custodian Direct Rollover.  Open up the account & get your account number, then go to your 401k provider/administrator for the paperwork to initiate the transfer directly to the new custodian.  If you don't do this correctly & they send a check to you to do a 60 day rollover, they will automatically withhold 20%. Then you will have to come up with the extra 20% out of pocket for a "100% rollover."  The withholding will be netted against your taxes and you will likely get a big refund (of your own money).  So just be sure to do a direct IRA rollover which will give you more control, lower fees, and much greater choices.

Gave you a lot to think about.  Best of luck, Dan Stewart CFA®

Having flexibility in retirement is an advantage and having all three wouldn't be too difficult.  But without knowing your age or income levels I cannot give you sage advice.  As a general rule though, the younger you are and the lower your tax bracket, the more advantageous a Roth is.  This is because you have more time to compound & grow your assets to make up the out of pocket tax liablity of contributing to a Roth versus a before tax retirement account.

There are also income limits that may preclude you from contributing to a Roth.  You definitely want to get the 6% match, and depending upon how good your 401k is - investment choices, whether you have a full brokerage options etc... - would also affect your decision.  And you are doing the right thing by rolling your old 401k into an IRA for flexibility, lower fees, and virtually unlimited investment options.  Each time you change jobs you should roll the 401k into this recepticle.  

Your thinking is good though, and your decision is dependent upon your income, your current 401k set-up & options, age, income level, expected retirement date/age.  So again, I need more information to give you solid advice other than the obvious of saving as much as you possibly can for retirement.

Sorry couldn't be more help, Dan Stewart CFA®

You will need to find an "alternative custodian" that allows you to hold alternative assets like real estate, physical precious metals etc.. in the IRA.  You will need to get a valuation, usually annually.  Ask for their time in business & knowledge of holding real estate, but you must compare fees as they can vary widely.

Best of luck, Dan Stewart CFA®
 

You subtract your Original Costs Basis (what you paid for the stock) from the Sales Price to determine the gain or loss.  Your holding period will determine how you treat the gain/loss and the applicable tax rate.  If it is less than 1 year, it is considered a short term gain or loss, and if held for a year or more, it is a long term gain or loss.  Short term gains are taxed at your ordinary income tax rate, and long term gains are taxed at your applicable capital gains tax rate not to exceed 20%.

But it is a little more complicated than that with regard to taxes as you need to consolidate all of your like-kind gains & losses.  So at the end of the year in all of your taxable accounts, you will add all of your long term gains & losses together for a net long term gain or loss.  You will then do the same for your short term gains & losses.  If you have net gains in both categories, you will then simply pay the appropriate capital gains rate for the long and short term gains.  If you have both losses, then you can offset $3,000 or ordinary income using the short term losses first, and then carry the remaining losses forward keeping their character (short or long term losses) to offset future gains.

However, if they are different, meaning you have a net long term gain & a net short term loss, then you net those together for a either a net long or short gain or loss.  If gain, you pay the appropriate tax rate.  If loss, offset $3,000 of ordinary income & carry the rest forward to offset future gains.

The easiest thing to remember is whatever is worse for the taxpayer is the rule.  That is why the IRS wants you to use the short term losses against ordinary income first because they would have more "value" offsetting future gains than long term.

But if managed properly, you will pay a lot less in taxes than you might think even during years of solid gains.  You should do tax loss harvesting around late November early December.  This is because many others will begin to do their loss harvesting & the things that have declined during the year normally will come under even more pressure in mid to late December.

This may seem complicated, but once you get used to the process, it is easy.  And it will help you minimize taxes.  If you have any questions regarding my (confusing) explanation reach out to me.

Hope this helps and best of luck, Dan Stewart CFA®