How to Calibrate Your Target Savings Rate
Savings rate rules of thumb are better than nothing, but smart investors customize their own savings targets.
Awhile ago, I shared a story of a friend who was worried about his retirement portfolio. Was he too conservatively positioned, he wondered? Would adding more small-cap stocks help him bridge the shortfall in his retirement kitty?
After taking a look, I didn't find dramatic problems at the portfolio level, though I agreed he could add a dash more small-cap exposure by supplanting his S&P 500 Index fund with a total stock market index tracker.