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Switching things around based on what "the market" is doing this quarter or this year gives you lots more opportunities to maximize your losses over the long term. You can't predict what those stocks will do over the 20-30 year life of your 401k. If you're too uncomfortable with the fluctuations, go ahead and adjust your allocation to something with less variability (and less expected return!), but choose a portfolio you'll stick with regardless of year-to-year fluctuations. You can make steady changes just by making your new purchases bonds instead of stocks, or whatever.
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May 25, 2010 16:01
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| # ? May 10, 2024 00:33 |
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I just set up a 401K today and I am completely lost. I am a total idiot about anything investment related so I have no idea what the breakdown for this type of thing should be. Right now there is a list of about 25 different options to split my money into and I am really overwhelmed with it. There is a subsection that describes each investment but even the dumbed down breakdowns are over my head. I'm really looking for a total idiot's guide to how I should split this all up. I'm not looking to become a zillionaire but I also don't want to just dump it into something completely wrong for me. Basically I have no idea where to even start. HELP!
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May 25, 2010 22:12
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MockTurtle posted:I just set up a 401K today and I am completely lost.... Basically I have no idea where to even start. HELP! I am not a pro or a day trader, just an economic/investing enthusiast. I am guess the options you have all have long names with stuff like World 250 small cap, US 300 Large Cap, bonds, International, Emerging Markets etc. These just give you an idea of what the funds you are picking are made of. I am not sure how old you are, but that matters when picking what funds to invest in. Also, don't obsess over the funds in your 401k, unless you are trying to retire in 10 years. Just pick things that you think will do well in 20, 30, 40 years. DO you think the US will do better than the rest of the world in that time? Then pick stuff that is US Equities (stocks) heavy. Small companies tend to allow for more growth, and large companies tend to have better dividends. For example, I am moving my 401k from my previous job, into a Vanguard Account where I can invest in the things I want. I will be 30 years old later this summer. I would like to start retirement by the age of 55 (maybe partial, own my own biz.) I am investing 80% of my portfolio in Stock or Equities. Of that 80% , 30% small companies, 30% mid, and 40% large. The other 20% is in US bonds. Here is some simple advice from the guy that started Vanguard: Select low-cost funds Consider carefully the added costs of advice Do not overrate past fund performance Use past performance to determine consistency and risk Beware of stars (as in, star mutual fund managers) Beware of asset size Don’t own too many funds Buy your fund portfolio – and hold it
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May 25, 2010 22:40
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imabmf posted:I am guess the options you have all have long names with stuff like World 250 small cap, US 300 Large Cap, bonds, International, Emerging Markets etc. 0310 - Stable Value Option 0041 - PIMCO Total Return Fund (PTRAX) (PIMCO Total Return Fund (Administrative Class)) 1430 - MainStay Income Builder Fund I (MTOIX) (MainStay Income Builder Fund (Class I)) 0211 - Retirement Income Fund Adv (PARIX) (T. Rowe Price Retirement Income Fund (Advisor Class)) 0269 - Retirement 2005 Adv (PARGX) (T. Rowe Price Retirement 2005 Fund (Advisor Class)) 0211 - Retirement 2010 Adv (PARAX) (T. Rowe Price Retirement 2010 Fund (Advisor Class)) 0269 - Retirement 2015 Adv (PARHX) (T. Rowe Price Retirement 2015 Fund (Advisor Class)) 0211 - Retirement 2020 Adv (PARBX) (T. Rowe Price Retirement 2020 Fund (Advisor Class)) 0269 - Retirement 2025 Adv (PARJX) (T. Rowe Price Retirement 2025 Fund (Advisor Class)) 0211 - Retirement 2030 Adv (PARCX) (T. Rowe Price Retirement 2030 Fund (Advisor Class)) 0269 - Retirement 2035 Fund (PARKX) (T. Rowe Price Retirement 2035 Fund (Advisor Class)) 0212 - Retirement 2040 Adv (PARDX) (T. Rowe Price Retirement 2040 Fund (Advisor Class)) 0269 - Retirement 2045 Adv (PARLX) (T. Rowe Price Retirement 2045 Fund (Advisor Class)) 0269 - Retirement 2050 Adv (PARFX) (T. Rowe Price Retirement 2050 Fund (Advisor Class)) 0292 - Retirement 2055 Adv (PAROX) (T. Rowe Price Retirement 2055 Fund (Advisor Class)) 0005 - Fidelity Spartan 500 Index (FUSEX) (Fidelity Spartan 500 Index Fund (Investor Class)) 0110 - Equity and Income Fund (OAKBX) (Oakmark Equity and Income Fund (Class I)) 0121 - Growth and Income Fund (ACGIX) (Van Kampen Growth and Income Fund (Class A)) 1686 - Mid Cap Fund (CHTTX) (Aston Optimum Mid Cap Fund (Class N)) 0358 - Fid Advisor Equity Growth A (EPGAX) (Fidelity Advisor Equity Growth Fund (Class A)) 1515 - Small Cap Value Fund (LRSCX) (Lord Abbett Small-Cap Value Fund (Class A Shares)) 0870 - Large Cap Growth Fund (MLAIX) (MainStay Large Cap Growth Fund (Class I)) 0590 - MAP Fund Class I (MUBFX) (MainStay MAP Fund (Class I)) 1289 - EuroPacific Growth Fund (REREX) (American Funds - EuroPacific Growth Fund (Class R4)) 0332 - Staples Investment Stock Fund (guess where I work?) I'm guessing I should immediately axe any of the retirement year ones that are below my retirement age. Should I just pick my retirement year and put it all into that had have them figure it out for me, or should I be putting it into a lot of different ones? I am almost 24 if it helps. Basically I am just enrolling so I can take advantage of the match that the company does. I just don't want to put it into something retarded which is going to defeat the purpose of the whole thing. quote:Just pick things that you think will do well in 20, 30, 40 years. DO you think the US will do better than the rest of the world in that time? Then pick stuff that is US Equities (stocks) heavy. Small companies tend to allow for more growth, and large companies tend to have better dividends. This is the problem I am having, because I literally know zero about how things like this work so I have no baseline to go from. I look at the numbers on their little breakdown and all I see is numbers instead of "good numbers" or "bad numbers". I have no clue how to pick what I think will do well. I'm like the people who go to horse races and bet solely based on the horse's name.
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May 25, 2010 23:06
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Can I buy stocks from within my Vanguard Roth, or do I have to have a trading account with some other broker?
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May 26, 2010 04:33
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MockTurtle posted:
You could just dump it all in Retirement 2050 or something for now, if you leave the job you're in, roll it over into a vanguard IRA account with lower fees. Personally, I think the target retirement funds keep too much in stocks very late in the game (5-10 years out), but you don't have to worry about that for a long time.
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May 26, 2010 13:28
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MockTurtle posted:FUNDS: You are not alone. Good news is most of these funds you can just put in the SYMBOL and see what the holdings are. For the PIMCO fund: PTRAX http://www.google.com/finance?client=ob&q=MUTF:PTRAX Classified as a Intermediate (length 5-10 yrs) Bond. US bonds or any LOW risk bond return like 2-5%. There is some diversity in there, if that is your thing. Some might prefer a fund with 100% allocation in US bonds or Notes. PARFX Ret. Date 2050 http://finance.yahoo.com/q/hl?s=PARFX+Holdings OVERALL PORTFOLIO COMPOSITION (%) Cash: 2.91 Stocks: 88.12 Bonds: 8.28 Other: 0.11 This is considered an Aggressive Fund. You are trying to invest your money to GROW. This fund is made up of several other Funds offered by T Rowe. The price is cheap (~15$), it has grown 3% over 3 years. It favors financial stocks but gives you some of just about everything. So just keep looking through funds to find one that you like. If you are asking for a winning formula, there is no answer. ANY fund, stock can lose value over a day, week, year, etc. Since you are only 24, I would just put it all into one of the target date options. Then when you are 30, re-evaluate. Don't obsess over the day to day Dow Jones, or NASDAQ numbers. Look at your quarterly statements. If at the end of the year, if you feel the performance of the Fund is not what you want, then move it. Remember that a savings account at a bank usually are less than 2% SIMPLE interest.
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May 26, 2010 15:52
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Thanks for dealing with all my dumb questions, guys. I know there is no surefire answer for this type of thing. I am just going to throw it in the retirement year one and forget about it for now. At least I know I'm not making the completely wrong decision, which is way better off than I was.
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May 27, 2010 00:58
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I have a question about 401(k) rollovers, sorry if it is somewhere in the middle of the thread - I read a couple of pages at the beginning and end, but not the whole thing. I just switched jobs, and have a bunch of paperwork to roll over my previous retirement account to either a rollover IRA or right into my new employer's plan. My new employer seems to be pushing (through the wording on the paperwork/sales pitch, not direct pressure obviously) for folks to choose to roll previous accounts over into the new 401(k), as opposed to a rollover IRA. I've talked to Fidelity and understand the pros and cons of both from my perspective, but my question is...what's in it for my new employer, i.e. why would they be so eager to want folks to roll into their account? Is there some advantage they receive based on total $ invested across all employees?
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Jun 23, 2010 16:25
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DMBFan23 posted:I have a question about 401(k) rollovers, sorry if it is somewhere in the middle of the thread - I read a couple of pages at the beginning and end, but not the whole thing. Most likely, the employer is looking out for the best interests of all employees, in that increasing total assets helps them qualify for institutional share classes (hence lower fees) as well as have more leverage in the 401k business for their annual renegotiations. You should still look out for your own personal self interests though, and rolling it over to your own IRA is usually the best course of action.
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Jun 23, 2010 16:48
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So I've noticed vanguard has put out a lot of ETFs to mimic their mutual funds. Should I be putting money in the ETF or the actual fund? Does it matter how long you plan to hold it?
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Jun 27, 2010 14:38
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alreadybeen posted:So I've noticed vanguard has put out a lot of ETFs to mimic their mutual funds. Should I be putting money in the ETF or the actual fund? Does it matter how long you plan to hold it? The ETF versions have lower MERs, but you need a brokerage account and have to pay a commission every time you buy/sell an ETF. This makes the ETFs better for those with a larger amount of assets who buy/rebalance only a couple times a year, and the mutual funds better for people with less assets or who want to buy monthly.
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Jun 27, 2010 16:39
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DuckConference posted:The ETF versions have lower MERs, but you need a brokerage account and have to pay a commission every time you buy/sell an ETF. This makes the ETFs better for those with a larger amount of assets who buy/rebalance only a couple times a year, and the mutual funds better for people with less assets or who want to buy monthly. Except Vanguard doesn't charge any commissions on trading their own ETFs.
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Jun 27, 2010 17:09
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bhaltair posted:Except Vanguard doesn't charge any commissions on trading their own ETFs. I didn't realize vanguard had their own brokerage. There's still the small cost of bid-ask spreads, but otherwise I guess there's little reason not to use the ETFs.
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Jun 27, 2010 18:33
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DuckConference posted:I didn't realize vanguard had their own brokerage. There's still the small cost of bid-ask spreads, but otherwise I guess there's little reason not to use the ETFs. Liquidity and bid/ask spreads are really the only potential drawbacks. Many people still prefer mutual funds for their "simplicity."
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Jun 27, 2010 21:15
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But for someone who is buying and holding for a long time and makes a few large transfers, it seems like ETFs will be the way to go for an IRA. I guess I just need to call up Vanguard and see if I can swap my funds out.
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Jun 27, 2010 22:34
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If you have online access (which you should to avoid the $10 yearly fee) you can do all transfers and account setup online. I don't know what money amounts you are dealing with, but if you are eligible for Admiral shares they have lower expenses than the ETFs.
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Jun 28, 2010 00:31
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I have been consolidating my finances into ING Direct, and have a sharebuilder brokerage account. If I roll-over my IRA into a Roth IRA with Sharebuilder, can I still purchase the Vanguard Target 2050 Funds or any of it's other passively-managed Index funds? Or would it be worth it to just open a vanguard account and put my retirement accounts there?
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Jun 29, 2010 20:08
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loud-bob posted:I have been consolidating my finances into ING Direct, and have a sharebuilder brokerage account. If I roll-over my IRA into a Roth IRA with Sharebuilder, can I still purchase the Vanguard Target 2050 Funds or any of it's other passively-managed Index funds? IIRC, the meatiest Vanguard funds (like the 2050 Retirement) are categorized as special funds and will cost $19.95 to buy. You'll want to doublecheck but I seem to remember chicanery like this when I was helping my wife get her IRAs in order. If you've got the $3000 or more to make the minimum, just open a vanguard account and roll your IRA there. It's nice to have everything in-house but the benefits of Vanguard far outweigh the convenience of direct transfers to Sharebuilder. (Plus there's no lovely $4 share buying fees!) e: If you don't have the $3000 then you can always grab a STAR fund at the $1k floor and build from there. It's not great but it's not terrible, either. If you don't have the $1k then I suggest just dollar cost averaging into SPY (S&P 500 index) until you've got enough, then move it to Vanguard. Chokes McGee fucked around with this message at 20:35 on Jun 29, 2010 |
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Jun 29, 2010 20:32
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Ok, I need a little help here. My wife has been swapping jobs while I was in school and she has 5k in 401k total over 3 accounts. I graduated and we moved to Texas. Our current situation is I work full time and make 55k a year. I'm already set with my 401k. My wife is working on the weekends and staying home with our child. I am 26 and she is 27. We have no other savings besides what she has already and my 401k starts in 2 months (new job). So what do I do with her 401k's? It would be great if I could access that money to pay off some school debt and some loan debt from the wedding but I'm already assuming that's out of the picture. Should I roll over everything to a IRA that way we have my 401k and her IRA for savings? Is there a better solution for savings?
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Jul 1, 2010 00:30
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Chokes McGee posted:IIRC, the meatiest Vanguard funds (like the 2050 Retirement) are categorized as special funds and will cost $19.95 to buy. Just moved all 3 401k plans for my wife to this exact fund and if you opt to use the electronic mailings, they will wave the 20 dollar annual fee for the fund. Also, I checked the pdf for the fund and I feel bad for anyone who had that fund last year and lost 25% or more in worth with the economy bombing. That loving sucks.
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Jul 2, 2010 01:38
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poemdexter posted:Just moved all 3 401k plans for my wife to this exact fund and if you opt to use the electronic mailings, they will wave the 20 dollar annual fee for the fund. Also, I checked the pdf for the fund and I feel bad for anyone who had that fund last year and lost 25% or more in worth with the economy bombing. That loving sucks. if you stuck with your funds you would be back at little less than even now? a lot of those funds just trace the Indices.
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Jul 2, 2010 04:52
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Dr. Jackal posted:if you stuck with your funds you would be back at little less than even now? I think the current return as of 2006 is less than a percent in the negative so yes.
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Jul 2, 2010 13:25
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poemdexter posted:I think the current return as of 2006 is less than a percent in the negative so yes. another question would be were there distributions.
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Jul 3, 2010 21:15
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I make too much for a Roth IRA ( , I know, I know) and I currently do not get any 401k match. Would I be better off investing in the 401k even though there's no match, or would it be better to open up a traditional IRA and use that? Do I even qualify for a traditional IRA if I don't qualify for the Roth?
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Jul 7, 2010 09:52
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I'm pretty sure there's no income limit for a traditional IRA, but you can't deduct contributions. Your growth isn't taxed, but you do have to pay taxes when you make withdrawals. Since you aren't getting the benefit of deducting contributions, it seems like a 401K is a better choice, even without a match, since you're contributing with pre-tax money.
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Jul 7, 2010 14:48
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The Rokstar posted:I make too much for a Roth IRA ( I'm in a similar situation. I'm married filing jointly with an income over 110k. No matching. Do the steps in the first post still apply to me? 1) 401k up to match 2) Ira max out 3) 401k maxout If I have a rolled over Roth IRA and a traditional rolled over IRA can I put 5k in each per year?
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Jul 7, 2010 16:48
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loud-bob posted:I'm in a similar situation. I'm married filing jointly with an income over 110k. No matching. Do the steps in the first post still apply to me?
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Jul 7, 2010 17:34
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Nevermind, answered my own questions. Thanks.
VermiciousKnid84 fucked around with this message at 07:46 on Jul 13, 2010 |
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Jul 7, 2010 18:23
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loud-bob posted:I'm in a similar situation. I'm married filing jointly with an income over 110k. No matching. Do the steps in the first post still apply to me? Roth IRA phaseout doesn't begin until 167k if you're filing jointly.
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Jul 7, 2010 20:10
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Inept posted:Roth IRA phaseout doesn't begin until 167k if you're filing jointly. If this is the case, should I still max out my IRA contributions before the 401k? Can I contribute the max for each IRA account or only Roth or only traditional?
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Jul 7, 2010 20:54
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loud-bob posted:If this is the case, should I still max out my IRA contributions before the 401k? Can I contribute the max for each IRA account or only Roth or only traditional? I believe it is Roth OR Traditional.
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Jul 7, 2010 21:09
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Dr. Jackal posted:I believe it is Roth OR Traditional. You can have a mix of the two if you want, but the total must not be more than $5000. Or $6000 if you're old. I would usually recommend the Roth IRA followed by 401k, but it all depends on if you think you will be living on more or less money in retirement, and also how good/bad your fund selection at your 401k is (at most companies it leans toward bad).
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Jul 7, 2010 22:04
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Inept posted:You can have a mix of the two if you want, but the total must not be more than $5000. Or $6000 if you're old. My companies 401k is with Cal Trust. I'm not sure how good that is, but it appears that if I am to save 15-20% of my income for retirement, a large portion of that will have to go into this 401k plan. Does anyone know if Cal Trust has any good funds available?
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Jul 7, 2010 23:03
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Quick question: What risks are inherent to the TIAA-CREF Money Market fund (TIEXX)? If the stock market went way down, for example, would the value of this fund be affected?
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Jul 11, 2010 19:00
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It is a money market fund - TIAA will go out of their way to keep the NAV at $1 so you don't lose principal. They have a history of good management practice and will most likely succeed. Even in the last crash only a couple of money market funds dipped below $1 thanks to Lehman Bros, and I don't think they got lower than $0.97 or so before they were bailed out. That all said, you should also know that VMMXX is a comparable fund at half the price.
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Jul 11, 2010 19:56
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slap me silly posted:It is a money market fund - TIAA will go out of their way to keep the NAV at $1 so you don't lose principal. They have a history of good management practice and will most likely succeed. Even in the last crash only a couple of money market funds dipped below $1 thanks to Lehman Bros, and I don't think they got lower than $0.97 or so before they were bailed out. That all said, you should also know that VMMXX is a comparable fund at half the price. Thanks for the tip!
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Jul 11, 2010 20:21
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gp2k posted:Thanks for the tip! it's true. only 1 fund broke the buck during the worst financial crisis of our generation. The Treasury stepped in and allowed MMF's to opt into an insurance program to prevent a catastrophic run on money market funds. but things could have gotten much worse. There is no reason to choose an MMF over an FDIC insured bank other than for short term convenience (i.e. sweep account for brokerage account) imo.
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Jul 11, 2010 20:42
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80k posted:it's true. only 1 fund broke the buck during the worst financial crisis of our generation. The Treasury stepped in and allowed MMF's to opt into an insurance program to prevent a catastrophic run on money market funds. I've got some money at TIAA-CREF and am trying to put a portion of it in the most stable fund I can find. At Fidelity, there is a "stable value" fund or some-such, but TIAA-CREF doesn't seem to have anything similar. But it sounds like the MM fund is the most stable and reasonable for now. Thanks guys.
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Jul 11, 2010 22:58
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| # ? May 10, 2024 00:33 |
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I have a few questions hopefully you guys can answer: This may be a dumb question, but let's say I leave my job and roll my 401k into an IRA - is that subject to the annual contribution limit? If so, what do people with a 401k worth over $5k do? And on to my own situation... I'm 28. I got a promotion and salary "adjustment" from $64k to $90k in April. I have just updated my 401k contributions to 10% of my income with no employer matching (*sigh*). My current retirement savings are thus: code:Also, since my IRA is doing so poorly, I haven't been contributing to it, but I want to, so I was considering transferring my IRA to Vanguard and then converting it to a Roth IRA. I'll have to ask them if both can be done in one step. My question is, I expect to surpass the Roth IRA contribution limits within a year or two (unless I move out of NYC!), so does it even make sense to do that - or just leave it as a traditional IRA?
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Jul 12, 2010 21:54
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