How aggressively should our generation save for retirement?

A fair number of us here, are, or will soon be, in our early 20's. Say you've got some money to start putting away for retirement. In saving for retirement, as a general rule should our generation split bonds/stocks 60/40, 50/50, or 40/60?

In theory, as a young person, it's best to be aggressive and split 40/60. Young people don't need quick access to their retirement money, and can afford to wait out downturns in the market. Being aggressive when you won't need the money and have no kids and homes to support is usually a good strategy.

In practice, the stock market is at an all-time high and housing prices are surely overheated, and interest rates are tightening. Should we perhaps be acting more conservative (50/50 or even 60/40) until the market turns down, and then becoming aggressive in the next downturn to buy stocks when they're low?

Or even buying money market funds as a hedge against rising interest rates?

Keep in mind:
a) This is retirement savings. So it has to reflect the right kind of conservatism. And you can't be playing with it like a day trader
b) If you have extra money to "play with," it's better to put it in stocks and keep your bonds in retirement since stock gains get less tax. Better to stuff the bond gains in low-tax retirement savings
c) Obviously the bond/stock split is a simplification. Those categories need to be further diversified among international content and different sectors



DON'T POST A REPLY IF YOU HAVE NO CLUE WHAT YOU'RE TALKING ABOUT.

This is a bad place for a "I dunno I like bonds to be safe lol" posts, unfortunately.

Jam it back in, in the dark.

Originally Posted by Lord Styphon

To be perfectly honest here, just how many people here do you expect to have a clue about stocks and bonds?

I could be totally wrong here, but I think most people in their early 20s have more pressing concerns than stocks, bonds, and retirement; things such as getting through and paying for college, and then finding a career that they can retire from forty years from now.

-Some of us will know enough to have different opinions. That's what a message board is for is it not? Sharing and learning from different opinions? Obviously the advice will be a bit difference from a finance forum or a banker, and that's what I want. Just not random shots in the dark from 13 year olds

-After you graduate and have a job, some financial advisers advocate splitting your "savings" money 50/50 between retirement and paying down your debt on things like student loans and car debts. Partly for the morale boost, if anything. (Obviously credit cards and other insane interest debts are an exception and must be killed first). Plus, not all of us go to college. 70c/hr is still worth saving well...

-Finding a career is more person-specific and would be better served in angst. Finances depend a bit on risk tolerance and the money you have to play with, but that's why I made the question super high-level and general. A good strategy's a good strategy.

There's nowhere I can't reach.