Can I choose different allocations for my current portfolio vs. future contributions?

Some traditional 401(k) providers may allow you to change your investment allocation for future deposits while keeping your current allocation for funds already contributed. At Guideline, we believe in the positive long-term results that a simpler approach may lead to. If you change the way your Guideline Portfolio is allocated, this update will affect the entire portfolio, not just future contributions.

When you complete our portfolio suitability assessment, we recommend a portfolio allocation that we believe is correct for your specific circumstances, taking into consideration your retirement time horizon and risk tolerance. You have the option to choose this recommendation, select another managed portfolio, or build a custom portfolio. The portfolio you select sets the "target allocation" for the funds in your portfolio and all assets in your retirement portfolio are invested accordingly.

We believe there is no reason for your future holdings to be allocated differently from current holdings. Instead, if your target allocation changes for any reason, your entire portfolio should change. This approach treats your retirement savings as one whole portfolio instead of breaking up your investments into different periods of time.

In a retirement account such as a 401(k), and unlike the situation with taxable, non-retirement accounts, you don't realize taxes when you sell investments or rebalance your portfolio. Instead, taxes are paid only when you withdraw funds or before you even contribute, if you contribute to a Roth account. Therefore, for your 401(k) funds, there is no reason to keep your old allocation if you have determined a new allocation is right for you.

The information above is provided for educational purposes only and should not be construed as personal investment advice or a guarantee of performance. All investments involve risk and your investments could lose value. You are advised to consult a qualified financial adviser before relying on the information provided herein.

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