60/40 Examples

Roth or Traditional IRA

A globally diversified portfolio using two low‑cost ETFs:

• 60% — Vanguard Total World Stock ETF (VT)
• 40% — Vanguard Total World Bond ETF (BNDW)

This structure provides broad global exposure inside a tax‑advantaged account, allowing dividends and rebalancing to occur without current tax consequences.

Thrift Savings Plan (TSP)

The Thrift Savings Plan (TSP) is a retirement plan available to U.S. federal government employees and members of the uniformed services. It functions similarly to a private‑sector 401(k), offering tax‑advantaged investing with a limited menu of low‑cost index funds.

A globally diversified 60/40 portfolio using core TSP funds:

• 30% — C Fund (U.S. large‑cap stocks)
• 5% — S Fund (U.S. mid‑ and small‑cap stocks)
• 25% — I Fund (international stocks)
• 40% — G Fund (bonds)

The G Fund is unique to the TSP. It invests in special U.S. Treasury securities that earn interest comparable to longer‑term government bonds while never declining in value, making it a stable bond option not available in private retirement plans.

Unlike traditional bond funds, the G Fund does not experience market price fluctuations or interest‑rate risk. Its securities are issued specifically for the TSP and are guaranteed by the U.S. government, allowing the fund’s value to remain constant regardless of changes in market interest rates.

This combination of Treasury‑level safety and stable returns makes the G Fund a distinctive bond option within the TSP. It is commonly used as the bond allocation in balanced portfolios and as a reliable source of stability during periods of stock market volatility.

Starbucks 401(k)

The Vanguard Institutional 500 Index Trust tracks the S&P 500 Index, representing large‑capitalization U.S. companies. It provides broad exposure to the U.S. stock market’s largest firms and serves as the core U.S. equity holding in many institutional retirement plans.

A globally weighted 60/40 portfolio using Vanguard index funds available in the plan:

• 30% — Vanguard Institutional 500 Index Trust (U.S. large‑cap stocks)
• 5% — Vanguard Institutional Extended Market Index Trust (U.S. mid‑ and small‑cap stocks)
• 25% — Vanguard Institutional Total International Stock Market Index Trust
• 40% — Vanguard Institutional Total Bond Market Index Trust

This structure approximates a total world stock portfolio while maintaining simplicity and institutional‑grade costs.

Intel 401(k)

Intel’s 401(k) plan is an example of a large employer offering a broad menu of investment options, including both U.S. and global bond funds.

A globally diversified 60/40 portfolio using representative funds available in the plan:

• 30% — Vanguard Institutional Index Plus Fund (U.S. large‑cap stocks)
• 5% — BlackRock Russell 2500 Index Fund (U.S. mid‑ and small‑cap stocks)
• 25% — BlackRock ACWI ex‑U.S. IMI Index Fund (international stocks)
• 20% — BlackRock U.S. Debt Index Fund (U.S. bonds, very low expense ratio)
• 20% — Global Bond Fund (international bonds, typically currency‑hedged, high expense ratio)

Although Intel’s plan includes a global bond option, its expense ratio is significantly higher than that of the U.S. bond index fund. As a result, many investors may reasonably choose to use U.S.‑only bonds instead, particularly when prioritizing simplicity and low costs. The inclusion of a global bond option here is intended to demonstrate availability rather than to suggest it is necessary or optimal.

Investment options, fund names, and availability within employer retirement plans may change at any time. The examples shown on this page are provided solely for educational purposes to illustrate general portfolio construction concepts. They are not recommendations and should be used only as a guide when selecting comparable low‑cost, broadly diversified index options within an individual investor’s own retirement plan.