I’m amazed at how quickly this year has gone by. The heatwave reminds me it’s summer, but I can’t believe we’re in the last week of July.

I’m a bit late, but I usually like to check my IRA asset allocation and see if I need to make any adjustments to contributions. I made a few tweaks, but I’m pretty much keeping to my plan.

Asset allocation has a big impact on your account’s performance. You basically determine your assets allocation on factors, such as:

  • Time -How long will it be before you retire and start withdrawing? The longer you have, the more risk you can take.
  • Risk Tolerance – Some people are naturally more conservative than others. If the recent ups and downs have you wondered, then you may not want to put all you money in emerging markets for example.

Not Too Late to Contribute

Don’t get discouraged if you haven’t opened an account up. It’s still not too late to contribute. You have until you file taxes to make your contributions. If you file your taxes mid February 2011, you can make contributions that count for 2010 until mid February.

How much can you contribute to your IRA?

Right now you can contribute $5,000/year to a Roth IRA if your modified AGI is :

  • $167,000 for married filing jointly or qualifying widow(er),
  • $116,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year, and
  • $10,000 for married filing separately and you lived with your spouse at any time during the year.

Source: IRS Publication 590

Curious to Learn More?

Mike has some great posts here on getting the right asset allocation for you.

Don’t be afraid to ask others about what they’re asset allocation is and how they chose it. While there are some principals people should follow with how they design their portfolio, there is a lot of leeway based on individuals risk tolerance.

If you don’t have the time or interest in adjusting and balancing your portfolio, you may want to check out a target retirement fund. It is supposed to adjust as the years pass and it will become more conservative the closer you get towards retirement.

How are your retirement accounts doing? What’s your current allocation for your investment account? Are you going to change them?