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[Renzoku]

Yes, it's worth it, if only for the potential employer match on your 401K. That is a rate of return that far exceeds any interest you might pay (dollar for dollar), so at the very least, contribute enough to get the maximum employer match possible (if you can). It's even more worth it when you consider the tax savings if you contribute pre-tax to a 401K or IRA. The United States also has rather inflexible yearly contribution limits, so it's not like you can prioritize debt one year and catch up on tax advantaged retirement accounts later.

Your debt, even the debt at 6.75%, costs less to service, dollar for dollar, than the employer match and tax savings you would expect to receive on your retirement contributions, so do not skimp on that. If you factor in (non-guaranteed) historical 8-10% rates of return in the market, the debt becomes a lower priority still.

Just to provide some simple numbers to aid in my thought process, let's assume you have $5000 in debt at 7%. Let's say your employer matches 60% of your own contributions, up to a maximum match of $3000 (makes the math simple, you have to contribute $5000 to get their maximum, but some employers will match differently and with no caps). Let's hold your top marginal tax rate at 15%, which is low on the tax scale. Additionally, let's hold the market rate of return at 9%. Finally, let's say you have $5000 you can either contribute to your 401K or pay down your debt. What do the numbers suggest?

Well, if you leave $5000 at 7% interest, and ignoring your own payments, it will accumulate $350 in interest in a year.

If you contribute the $5000 to your 401K, your employer is going to kick in $3000. The market is going to produce $225* on your investment and $135* on your employer match this year (*I'm taking 9% of $5000 and $3000, respectively, and dividing it by 2, since I'll stipulate that your contributes take place over the course of the entire year, not all up front. If all up front, it would be $450 and $270 in earnings.) Your tax savings (if contributing pre-tax) will be $750 for this year, and it would be more if you were actually in a higher tax bracket.

Add it up. On one hand, you have $350 in interest. On the other, you have $4110 in matches, earnings, and tax savings. Which would you rather do? Pay off the debt, or invest in your 401K? Take away everything but the tax savings (which assumes no employer match and a flat year in the market) and it still favors the 401K when you contribute pre-tax.

All that said, do what feels comfortable to you.

Thank you for the super detailed response, I really appreciate it! I'm going to have to wait until December to enroll in the plan anyway as I haven't been with the company long enough yet, so I'll work on the debt until then, and then I should hopefully be able to tackle both at the same time (our cost of living is fairly low right now and I'm being very careful with discretionary spending).

Again, appreciate the advice!

 

[Randolph Freelander]

How long has it been since I griped about the weakness of small caps? (Says the guy who pays too much attention by the day.) (But seriously, small caps [as reflected by the Russell 2000] are down 1.3% YTD while the S&P is up 8.92%.)

In brighter market news, it seems the bulls are winning over the bears.

S&P 500 powers on in a market without big pullback
The S&P 500 Valuation May Not Matter -- Here's Why
Stock Market Bears Turn Docile, Predict S&P 500 Gains (Click to article from Google search)

Spoiler

SELL MORTIMER SELL

 

[Piecake]

How long has it been since I griped about the weakness of small caps? (Says the guy who pays too much attention by the day.) (But seriously, small caps [as reflected by the Russell 2000] are down 1.3% YTD while the S&P is up 8.92%.)

In brighter market news, it seems the bulls are winning over the bears.

S&P 500 powers on in a market without big pullback
The S&P 500 Valuation May Not Matter -- Here's Why
Stock Market Bears Turn Docile, Predict S&P 500 Gains (Click to article from Google search)

Spoiler

SELL MORTIMER SELL

I am glad I never bought into the small cap value trend. I think the reasoning behind it was something like diversifying risk, correlation, or something or other, but it simply seemed like a sector bet to me. Well, I guess time will tell if I made the right choice or not.

 

[Randolph Freelander]

I am glad I never bought into the small cap value trend. I think the reasoning behind it was something like diversifying risk, correlation, or something or other, but it simply seemed like a sector bet to me. Well, I guess time will tell if I made the right choice or not.

If you're in a total market index of any kind, you'll be in small and mid caps, it's just that large caps will carry a much larger weight. To whatever extent I'm able, I've tried to allocate my 401K between my available offerings to somewhat approximate a total market approach. The majority of my account there (~65%) is allocated to domestic large caps, with the rest split between small, mid, and international. I've finally closed on my house and, with that, also finally opened a Roth IRA through Fidelity, and am only in the S&P 500 (FUSEX) there.

Also, to be fair, the Russell 2000 is still outperforming the S&P over 10 years. Over the last 5, though, you can see it getting out in front of the S&P from mid 2010 through mid 2011, and then pulling back, and then again in 2013... and pulling back. It's as if small caps are correcting a bit. The graphs below show the Russell 2000 (in red) charted against the S&P 500.

5 years:

10 years:

 

[iamblades]

If you're in a total market index of any kind, you'll be in small and mid caps, it's just that large caps will carry a much larger weight. To whatever extent I'm able, I've tried to allocate my 401K between my available offerings to somewhat approximate a total market approach. The majority of my account there (~65%) is allocated to domestic large caps, with the rest split between small, mid, and international. I've finally closed on my house and, with that, also finally opened a Roth IRA through Fidelity, and am only in the S&P 500 (FUSEX) there.

Also, to be fair, the Russell 2000 is still outperforming the S&P over 10 years. Over the last 5, though, you can see it getting out in front of the S&P from mid 2010 through mid 2011, and then pulling back, and then again in 2013... and pulling back. It's as if small caps are correcting a bit. The graphs below show the Russell 2000 (in red) charted against the S&P 500.

5 years:


10 years:

^^

I don't think many people would suggest small caps should make up a significant portion of your portfolio, but having some exposure is a good idea IMO.

 

[Piecake]

I was mostly talking about the trend of small cap value tilting. Basically having more exposure to small cap value than its overall share of the market. I think most people advocate a tilt in the range of 5-15% above market share, but, well, that still seems like a bet to me.

 

[Y2Kev]

Anyone have a really good 401k vs. Roth 401k calculator that takes into account federal income tax rate AND state tax rate? IE you can tell it what state you are in? I can never figure out my state income taxes and I'm too lazy to look into it now.

I am trying to make a decision now once and for all.

edit: Also I'm still up significantly this year in my Vanguard Small-Cap Index Fund Admiral Shares.

 

[Piecake]

Anyone have a really good 401k vs. Roth 401k calculator that takes into account federal income tax rate AND state tax rate? IE you can tell it what state you are in? I can never figure out my state income taxes and I'm too lazy to look into it now.

I am trying to make a decision now once and for all.

edit: Also I'm still up significantly this year in my Vanguard Small-Cap Index Fund Admiral Shares.

I looked around for a bit and did not see an calculators like that. I saw plenty of calculators that let you freely set your tax rate though. Obviously you would need to figure out for yourself what that rate is, which seems like you really don't want to do at this moment.

Personally, I think it is good to have a balance between traditional and roths. It might not be 'ideal', but how do you predict the ideal for you when you don't know what the tax rate will be when you retire? I think the safest option is to simply go the middle route so you neither get fucked or win.

 

[Y2Kev]

You could make some assumptions, like "the tax rate must go up" or something. That would be scary.

 

[Randolph Freelander]

edit: Also I'm still up significantly this year in my Vanguard Small-Cap Index Fund Admiral Shares.

That's up 5.46% YTD (VSMAX). That... that's enough to make me agitated. It's also beating the Russell 2000 over 1Y, 2Y, 5Y, etc. They're doing something different.

Edit:

Fund Summary
The investment seeks to track the performance of a benchmark index that measures the investment return of small-capitalization stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP U.S. Small Cap Index, a broadly diversified index of stocks of small U.S. companies. It attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

I guess it's going for a different benchmark, so it has different results. I'll have to look into this further, though I doubt I go chasing anything. It's not like I have an equivalent fund in my 401K, anyway, and I don't want to split my Roth allocations just yet, so any digging of mine will be for edutainment purposes only.

 

[Randolph Freelander]

Anyone have a really good 401k vs. Roth 401k calculator that takes into account federal income tax rate AND state tax rate? IE you can tell it what state you are in? I can never figure out my state income taxes and I'm too lazy to look into it now.

I am trying to make a decision now once and for all.

I know of no calculator, but for me personally, I know my top marginal rate is 28% (federal). I also know that after all deductions last year, I paid an effective federal tax rate of 19.3% on taxable income (14.5% on adjusted gross). I also maxed out my 401K, pre-tax. I therefore know that if I elected to shift that to a Roth (making it post-tax), I would pay 28% on all funds, which of course is higher than my effective tax rate. What I'm banking on is that even if marginal rates increase, which I honestly do not believe they will to any significant degree, I doubt that my future average tax rate will meet or exceed 28%, so I'm at an advantage by saving that money now.

Of course, starting with this tax year, I plan to also begin maxing a Roth IRA contribution every year, or at least until my income exceeds the Roth limit (and they close the conversion loophole). I could start directing a portion of my 401K into a Roth 401K with my employer, but that makes the 401K more expensive (see tax calculation) and I'd rather put any excess funds in a self-directed account elsewhere. However, my first priority at the moment is to replenish my cash savings (I just blew through a big chunk of it with a house down payment, closing costs, and the cost of furnishings).

 

[Y2Kev]

I feel like a Roth is probably screwing me but I hate uncertainty so I enjoy the certainty of paying taxes now...

...though I suppose there's nothing 100% certain on that end either. They could decide out of nowhere to fuck everyone over on that.

 

[TomShoe]

What are people's feelings on mutual funds nowadays? My father has been insisting for the longest time that's where he makes a large portion of his money from, I've always been pretty skeptical.

 

[Darren870]

What are people's feelings on mutual funds nowadays? My father has been insisting for the longest time that's where he makes a large portion of his money from, I've always been pretty skeptical.

Depends on the individual and the time you have to invest each day. I have a few mutual funds that have grown very well over the years. The best thing to make sure is that the cost is low and that it has a proven track record. Check to make sure they aren't changing fund managers every year, and also check when they do change a fund manager.

A lot of mutual funds have high costs, but there are plenty of low cost ones that beat the market (vanguard).

Just do your homework and if you don't have time each week to keep up with the market that a mutual fund is a better option then individual stocks.

However, in the end you might as well just go for an index fund. They are usually lower costs and provide similar returns. I'd probably prefer a mutual fund in a bear market in hopes a good fund manager would reduce the risk. There were a few good mutual funds that did very well during the GFC.

 

[RumblingRosco]

-

 

[RuGalz]

Say if you have a known or high potential of upcoming expense (i.e. downpayment for a house, buying a car, etc) in a few years (let's say 4-5), where would you guys put the money for the time being?

 

[Darren870]

Say if you have a known or high potential of upcoming expense (i.e. downpayment for a house, buying a car, etc) in a few years (let's say 4-5), where would you guys put the money for the time being?

Well you should always be investing for retirement. At least the 401k, don't throw away free money.

If you want to save after that then well the choice is yours. Savings accounts don't offer much interest, so I would perhaps looking into a CD or Money Market. I would imagine that most advisers would advise against putting needed money into the stock market. However, it will likely provide you with more of a gain then the current rates within a CD/Money Market.

However, the fed is suppose to be raising interest rates soon. So its speculated. If they do I would wait a bit to see what the new rates look like.

 

[GhaleonEB]

Say if you have a known or high potential of upcoming expense (i.e. downpayment for a house, buying a car, etc) in a few years (let's say 4-5), where would you guys put the money for the time being?

For a planned expense that far away, you want to balance having the money on hand while still getting a return on it. It might make sense to split the money between setting some cash aside and putting most into a blend of stock and bond index funds. That way you don't expose all of it to market volatility, and have a very good chance at getting something out of the 4-5 year horizon due to the diversification of what is invested.

That's how I manage our medium term savings funds. Keep a certain level of cash on hand, the rest in a blended index fund of stocks and bonds.

 

[anonymous_abc]

For a planned expense that far away, you want to balance having the money on hand while still getting a return on it. It might make sense to split the money between setting some cash aside and putting most into a blend of stock and bond index funds. That way you don't expose all of it to market volatility, and have a very good chance at getting something out of the 4-5 year horizon due to the diversification of what is invested.

That's how I manage our medium term savings funds. Keep a certain level of cash on hand, the rest in a blended index fund of stocks and bonds.

It's probably wise to always keep some readily accessibly cash available, you never know what might happen and you don't want to be forced to sell something at an inopportune time.

 

[RuGalz]

Yea we are already doing all the other savings discussed here and have emergency fund stashed away in saving account.

It's just the question of where to put the money that we know we will be using in the near future. It just feels like such a waste to leave it in saving account. I haven't bought any bond or safer investments before, so I'm looking at options.

 

[RustyNails]

I dont understand why my PRR on 401k is hovering around 6% for 2014, when I fully invested in stocks (small, mid and little bit of europac). Any takers?

 

[Randolph Freelander]

I dont understand why my PRR on 401k is hovering around 6% for 2014, when I fully invested in stocks (small, mid and little bit of europac). Any takers?

Your rate of return isn't surprising, the market isn't up as much as last year. Including today, the S&P is up 7.09%, the S&P Mid Cap is up 2.87%, and the Russell 2000 (small caps) is down 4.21% year-to-date. (Last year at this time, the YTD returns were ~22% for the S&P to nearly 30% for the Russell.) September has been bad (particularly for the Russell 2000), so those numbers down from the end of August.

 

[RustyNails]

Your rate of return isn't surprising, the market isn't up as much as last year. Including today, the S&P is up 7.09%, the S&P Mid Cap is up 2.87%, and the Russell 2000 (small caps) is down 4.21% year-to-date. (Last year at this time, the YTD returns were ~22% for the S&P to nearly 30% for the Russell.) September has been bad (particularly for the Russell 2000), so those numbers down from the end of August.

Whats a typical PRR on a 401k with say 80-20 split between stocks and bonds?

 

[Piecake]

Whats a typical PRR on a 401k with say 80-20 split between stocks and bonds?

6% would be a good average for that. I personally assume a 6-7% return when I try to 'predict' the future value of my retirement account and I am currently at 100% stocks.

 

[Halvie]

Does anyone know if the Morningstar custom chart is accurate when using multiple funds? The difference between Vanguard's Total Market, S&P 500, and Mid-Cap index funds is pretty drastic.

 

[Barkley's Justice]

VGTSX and VTSMX are getting clobbered. I'm receiving advice to get out of International funds. Something about Germany possibly sinking into a recession.

I'm considering dumping the two funds above and going with VQNPX, VCVLX or VMVIX.

Thoughts?

 

[Piecake]

Does anyone know if the Morningstar custom chart is accurate when using multiple funds? The difference between Vanguard's Total Market, S&P 500, and Mid-Cap index funds is pretty drastic.

I'd be shocked if it was

VGTSX and VTSMX are getting clobbered. I'm receiving advice to get out of International funds. Something about Germany possibly sinking into a recession.

I'm considering dumping the two funds above and going with VQNPX, VCVLX or VMVIX.

Thoughts?

I wouldn't. I think one of the important rules of long-term index investing is to block out the noise, and that right there is just noise.

 

[clav]

Does anyone know if the Morningstar custom chart is accurate when using multiple funds? The difference between Vanguard's Total Market, S&P 500, and Mid-Cap index funds is pretty drastic.

I'll just add to your Morningstar question since some people invest by looking at star count. Not really a good idea to judge funds by stars because then now you're investing via hindsight.

Past performance does not guarantee future returns.

Asset allocation is what you need to question (i.e. % of total finances divided between personal + investing).

 

[Y2Kev]

VGTSX and VTSMX are getting clobbered. I'm receiving advice to get out of International funds. Something about Germany possibly sinking into a recession.

I'm considering dumping the two funds above and going with VQNPX, VCVLX or VMVIX.

Thoughts?

Unless you think Germany is going to sink into the ocean, I'd hold onto it. When would you need the retirement money?

I'm thinking of letting it crash a bit further and then rebalance into it. It's a bargain!

 

[cametall]

I just started a Fidelity IRA after dragging my feet on starting a retirement fund since graduating college, yay me.

Right now I am contributing a few hundred dollars a month, with occasional additional contributions as I have extra funds available. Hoping to max out every year.

So that leaves me out of the mutual funds playground for several months (Fidelity, $2,500 initial).

I've been researching ETFs and Fidelity has quite a few with no fees. I understand what they are and how they work but I am unsure if they are the appropriate investment for retirement. I've been focused on the ones that follow the S&P 500 index in various ways (IVV & IVW) and a total market one (ITOT).

I'm just confused on if ETFs are the best investments for retirement or are mutual funds? I'm focused on the index funds and ETFs. Some advice or direction would be much much appreciated.

 

[Piecake]

I just started a Fidelity IRA after dragging my feet on starting a retirement fund since graduating college, yay me.

Right now I am contributing a few hundred dollars a month, with occasional additional contributions as I have extra funds available. Hoping to max out every year.

So that leaves me out of the mutual funds playground for several months (Fidelity, $2,500 initial).

I've been researching ETFs and Fidelity has quite a few with no fees. I understand what they are and how they work but I am unsure if they are the appropriate investment for retirement. I've been focused on the ones that follow the S&P 500 index in various ways (IVV & IVW) and a total market one (ITOT).

I'm just confused on if ETFs are the best investments for retirement or are mutual funds? I'm focused on the index funds and ETFs. Some advice or direction would be much much appreciated.

They are basically the same thing. They are just bought and sold differently. An SP 500 mutual fund and an SP 500 ETF will have the same shit in it and will likely have a similar expense ratio. That is what matters.

Some people prefer etfs. Others prefer mutual funds. I prefer mutual funds, but there isnt a wrong choice.

 

[giga]

VGTSX and VTSMX are getting clobbered. I'm receiving advice to get out of International funds. Something about Germany possibly sinking into a recession.

I'm considering dumping the two funds above and going with VQNPX, VCVLX or VMVIX.

Thoughts?

Don't. You can't time the market. If you have a large percentage of your portfolio in equities, I assume you're not retiring anytime soon either.

 

[Husker86]

I just started a Fidelity IRA after dragging my feet on starting a retirement fund since graduating college, yay me.

Right now I am contributing a few hundred dollars a month, with occasional additional contributions as I have extra funds available. Hoping to max out every year.

So that leaves me out of the mutual funds playground for several months (Fidelity, $2,500 initial).

I've been researching ETFs and Fidelity has quite a few with no fees. I understand what they are and how they work but I am unsure if they are the appropriate investment for retirement. I've been focused on the ones that follow the S&P 500 index in various ways (IVV & IVW) and a total market one (ITOT).

I'm just confused on if ETFs are the best investments for retirement or are mutual funds? I'm focused on the index funds and ETFs. Some advice or direction would be much much appreciated.

I bought ITOT until I could get enough for FUSEX. The only reason I switched over is because dividends are automatically reinvested and I'd be able to have $0 in cash in the IRA since you don't have to buy full shares.

As an aside, someone said that if you have an auto-contribution of $200/month, you could get into a Fidelity Mutual Fund without meeting the minimum investment amount. I never did that but it might be worth looking into if you want to get a mutual fund right away.

 

[cametall]

I bought ITOT until I could get enough for FUSEX. The only reason I switched over is because dividends are automatically reinvested and I'd be able to have $0 in cash in the IRA since you don't have to buy full shares.

As an aside, someone said that if you have an auto-contribution of $200/month, you could get into a Fidelity Mutual Fund without meeting the minimum investment amount. I never did that but it might be worth looking into if you want to get a mutual fund right away.

I've read that a few times here but cannot for the life of me figure out how to do it or what funds allow it. I'll have to contact Fidelity about it.

EDIT: I've also given a lot of thought to your method as well. Invest in an ETF until I can afford to buy into a mutual fund. I was looking at ITOT to FSTMX or FUSEX.

 

[blitz64]

VGTSX and VTSMX are getting clobbered. I'm receiving advice to get out of International funds. Something about Germany possibly sinking into a recession.

I'm considering dumping the two funds above and going with VQNPX, VCVLX or VMVIX.

Thoughts?

One should set a ratio for US and international. For example 70% US / 30% international.
Stick with that ratio no matter what happens.

Buy low, sell high. By keeping a ratio, it forces you to sell high and buy more of the low international one.
US is at an all time high 2 weeks ago.

International is a much better deal compared to US stocks.

 

[CFMOORE!]

question for the investing gents in here, i started a new job two months ago and my 401k at my last company is obviously still sitting with jpmorgan (my last company's retirement choice), where/what is the best place to put it?

i currently have short of $30k in it and I am invested 75%/25% in the following respectively:

http://profile.morningstar.com/profile/HTMLPage.asp?ClientCode=005&View=snapshot&ID=SPUSA05A9T

http://profile.morningstar.com/profile/HTMLPage.asp?ClientCode=005&View=snapshot&ID=SPUSA05A9V

my very first company 401k i put into play with a financial advisor that a friend hooked me up with, and while so far i am seeing decent growth there, i'd like to channel this 401k elsewhere just so as not to keep my eggs all in one basket.

thoughts?

thanks!!!

 

[chaosblade]

One should set a ratio for US and international. For example 70% US / 30% international.
Stick with that ratio no matter what happens.

Buy low, sell high. By keeping a ratio, it forces you to sell high and buy more of the low international one.
US is at an all time high 2 weeks ago.

International is a much better deal compared to US stocks.

This is how I'd like to set mine up, but I assume there is no way to have Vanguard's automatic investment do that for you. Have to either do the transactions manually or update the automatic transactions every so often.

 

[Jhriad]

Well, if you retire at 65...

If you wait until you are 40 and only have 15 years to invest, you will have to invest 558,000 to achieve the same amount. Investing early will save you 358,000 dollars.

*twitch*

 

[cametall]

So I spoke with Fidelity and they do still offer the $200 a month auto investment into a mutual fund, with the initial investment waived. You just need $100 cash in your Fidelity account and setup the transaction over the phone.

 

[Randolph Freelander]

*twitch*

To be fair, the years go by faster at 40 than they do at 20.

 

[Piecake]

question for the investing gents in here, i started a new job two months ago and my 401k at my last company is obviously still sitting with jpmorgan (my last company's retirement choice), where/what is the best place to put it?

i currently have short of $30k in it and I am invested 75%/25% in the following respectively:

http://profile.morningstar.com/profile/HTMLPage.asp?ClientCode=005&View=snapshot&ID=SPUSA05A9T

http://profile.morningstar.com/profile/HTMLPage.asp?ClientCode=005&View=snapshot&ID=SPUSA05A9V

my very first company 401k i put into play with a financial advisor that a friend hooked me up with, and while so far i am seeing decent growth there, i'd like to channel this 401k elsewhere just so as not to keep my eggs all in one basket.

thoughts?

thanks!!!

Your financial adviser did a good job. Those funds are stupid cheap and gives you a broad exposure to the US. Youre missing out on international and small caps, but I don't think that is a huge deal.

You can simply keep it there if that 401k doesnt have any mangement fees and the like. Otherwise, I would probably open up a IRA at vanguard or fidelity and transfer the funds into that IRA. To do that, I would go to their website and call them up if you have any questions.

being afraid to keep all of your eggs in one basket also makes less sense when it comes to index funds. the nature of an index fund, especailly if it is like the total stock market, already means that your eggs are in a TON of baskets. As for 401ks and IRAs, those are simply investment vehicles. Those only matter in terms of taxes and fees, not investment return (well, obviously taxes and fees hurt investment return, but I think you know what I mean)

*twitch*

I'm sorry

Don't get discouraged though! Every little bit counts. And it is always worthwhile to save for retirement, no matter how close that day is.

 

[simplayer]

I'm sorry

Don't get discouraged though! Every little bit counts. And it is always worthwhile to save for retirement, no matter how close that day is.

I think he might mean the arithmetic error.

 

[Husker86]

I'm sorry

Don't get discouraged though! Every little bit counts. And it is always worthwhile to save for retirement, no matter how close that day is.

I think he was referring to the missing decade in your calculations =P

 

[Piecake]

I think he might mean the arithmetic error.

I think he was referring to the missing decade in your calculations =P

Woops

 

[CFMOORE!]

Your financial adviser did a good job. Those funds are stupid cheap and gives you a broad exposure to the US. Youre missing out on international and small caps, but I don't think that is a huge deal.

You can simply keep it there if that 401k doesnt have any mangement fees and the like. Otherwise, I would probably open up a IRA at vanguard or fidelity and transfer the funds into that IRA. To do that, I would go to their website and call them up if you have any questions.

being afraid to keep all of your eggs in one basket also makes less sense when it comes to index funds. the nature of an index fund, especailly if it is like the total stock market, already means that your eggs are in a TON of baskets. As for 401ks and IRAs, those are simply investment vehicles. Those only matter in terms of taxes and fees, not investment return (well, obviously taxes and fees hurt investment return, but I think you know what I mean)



I'm sorry

Don't get discouraged though! Every little bit counts. And it is always worthwhile to save for retirement, no matter how close that day is.

hey pie cake!

actually, i chose those specific funds for that particular 401k. my mention of the financial advisor was just that 401k #1 i moved from SmithBarney to American Funds with that financial advisor. My eggs in one basket line referred to my desire to actively/passively manage 401K #2 by myself and not take it to that advisor (not that i have anything against him)

so vanguard then?

Edit: and it looks like my fees are $14 a quarter in the current jpmorgan account

 

[GhaleonEB]

hey pie cake!

actually, i chose those specific funds for that particular 401k. my mention of the financial advisor was just that 401k #1 i moved from SmithBarney to American Funds with that financial advisor. My eggs in one basket line referred to my desire to actively/passively manage 401K #2 by myself and not take it to that advisor (not that i have anything against him)

so vanguard then?

Edit: and it looks like my fees are $14 a quarter in the current jpmorgan account

Definitely move to a company with no fees. That's $56 per year you could be investing and you are getting nothing of value for the cost. Vanguard or Fidelity both have no fees; Vanguard is probably the best option due to their structure and large number of index funds.

 

[CFMOORE!]

Definitely move to a company with no fees. That's $56 per year you could be investing and you are getting nothing of value for the cost. Vanguard or Fidelity both have no fees; Vanguard is probably the best option due to their structure and large number of index funds.

thanks for the info! what are the best funds over there? to give some insight, I am 32, i have my 1st 401k at nearly $80k in with American Funds with my financial advisor guy. This 401k (#2) is at nearly $30k and I just need to know what funds are best for it over at Vanguard. I have a 3rd 401k that I am currently putting money into and maximizing my company match on.

 

[Randolph Freelander]

thanks for the info! what are the best funds over there? to give some insight, I am 32, i have my 1st 401k at nearly $80k in with American Funds with my financial advisor guy. This 401k (#2) is at nearly $30k and I just need to know what funds are best for it over at Vanguard. I have a 3rd 401k that I am currently putting money into and maximizing my company match on.

What's your risk tolerance? Honestly, you could just move it over to Fidelity and Vanguard and park it in a total market index fund, or something tracking the S&P, sprinkle in some international to whatever degree you want, add bonds to hedge your risk, etc. It's really up to you.

If you were looking at Fidelity, you could look at FUSEX and FSTMX and, given your balances, you might qualify for funds that have even lower fees (and thus greater returns). Equivalent funds would be available with Vanguard.

 

[CFMOORE!]

What's your risk tolerance? Honestly, you could just move it over to Fidelity and Vanguard and park it in a total market index fund, or something tracking the S&P, sprinkle in some international to whatever degree you want, add bonds to hedge your risk, etc. It's really up to you.

If you were looking at Fidelity, you could look at FUSEX and FSTMX and, given your balances, you might qualify for funds that have even lower fees (and thus greater returns). Equivalent funds would be available with Vanguard.

i suppose i can afford to be a little aggressive with this one. why not, right?

 

[AliasGreed]

Quick Question.

My dad past away (old age) and left about $20,000 as inheritance. I'm 31 years old and I already put 10% on my job's 401K. My company matches up to 7%.

My plan with that 20,000 is to open a Roth IRA and put the maximum $5,500 each year until I have all that money invested. Is this a good idea / best way to invest ?

I figured it would be a good idea because in an emergency I can take the money out (invested not generated though interest) and I also have money in the bank in case I have an emergency until its all invested.