Is this a good asset allocation for my employee Roth 401K and 457 plans?
45% bond index fund
20% large-cap index fund
10% mid-cap index fund
5% small-cap index fund
20% international index fund
I have about 8-10 years until retirement (I am 42, but want to retire early).
I have low to moderate risk tolerance.
I was thinking to increase the small-cap index fund to, maybe, 10% to make it worth the fees for this asset class (0.06%), but I would have to reduce something else, and I don't know what.
The fees for my entire portfolio is 0.35%.
I have two contradicting concerns. One is that my bond-heavy portfolio may suffer losses as interest rates rise, and bonds lose value.
The second concern is that 8-10 years is not a long enough time line to load my portfolio with more stocks. I need some stability in my portfolio, as I will be quitting my job and counting on steady income.
What should I do?