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I'm pretty sure not. It really doesn't matter - the expense ratio on the regular funds is already quite low. Just let the admiral share thing happen in its own time.
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Jul 1, 2014 02:05
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| # ? May 26, 2024 13:04 |
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For people stuck with a Fidelity 401k make sure to check to see if the plan has the Spartan funds. The expense ratio is very low vs the standard horrible rate and many of the Spartan US funds also pay a decent dividend as well.
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Jul 1, 2014 02:42
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There's nothing wrong with Fidelity itself. Like you said, the Spartan funds are pretty awesome. My funds each have 0.05 expense ratios. I actually like having my 401k through Fidelity. Up to this point I've only ever had Vanguard (both for IRAs and 401k), so it's cool to see all of the nifty tools and the like that Fidelity has. I actually think they're superior to Vanguard. Vanguard definitely has a lot more great funds, and they're a lot more friendly overall with expense ratios, but there are several Fidelity funds that are on par. If you've got a bad choice of funds to choose from, well, that has more to do with the company you work for and the benefits they're able to negotiate than with Fidelity itself. If you're a small company or if your company just bought a poor product, that's not on Fidelity.
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Jul 2, 2014 01:47
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Brian Fellows posted:I actually like having my 401k through Fidelity. Up to this point I've only ever had Vanguard (both for IRAs and 401k), so it's cool to see all of the nifty tools and the like that Fidelity has. I actually think they're superior to Vanguard. I think every 20 or so pages there's a discussion about Fidelity versus Vanguard. Either isn't bad, but there are some small reasons why some people prefer one over the other. I myself like Vanguard over Fidelity for two main reasons. 1) Vanguard has a better ownership structure, and isn't really incentivized to profit off of small investors. 2) Fidelity's main moneymakers have not been their Index funds, and the amount that people as a whole put into index funds is at a lower ratio than Vanguard.
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Jul 2, 2014 01:57
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Yeah I agree Vanguard is better in every way, I was more taking exception to the "stuck with Fidelity" wording. You could do much, much worse. The key is understanding what you're getting yourself into and maximizing your efficiency with what you've got to work with. I breathed a sigh of relief when I saw my new company's 401k was through Fidelity. It's definitely one of the BETTER companies to get "stuck with" more often than not thanks to their Spartan funds.
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Jul 2, 2014 02:03
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Brian Fellows posted:Yeah I agree Vanguard is better in every way, I was more taking exception to the "stuck with Fidelity" wording. Yes, definitely 
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Jul 2, 2014 02:19
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ntan1 posted:I think every 20 or so pages there's a discussion about Fidelity versus Vanguard. Either isn't bad, but there are some small reasons why some people prefer one over the other. Yeah Vanguard is a great company overall due to the way how it's setup and the funds other shines in things such as liquidity/tracking error/rock bottom ER costs even for average investors. John Bogle the company founder is pretty awesome too, he doesn't have a massive compensation package, gives piles of money to charity and also is big supporter of government regulations to curb the excesses of the finance industry. He also pretty much popularized the low cost index fund concept even though at the time people mocked his basic idea of index investing being better than a higher cost actively portfolio management. etalian fucked around with this message at 02:24 on Jul 2, 2014 |
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Jul 2, 2014 02:20
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I got a job last year that was a major increase in income for me, and after having paid off all my debts in the first six months of working there, I decided to participate in my company's ESPP (employee stock purchase plan) at the maximum 20% rate. Long story short, I received the stock this morning and made out like a bandit - the stock went up about 15% which stacked on top of the 15% discount. All in six months. Of course, the bastards decided to discontinue the ESPP a few weeks ago, probably because they lost their shirt on this latest round. Anyways, I've sold it all (I'm aware of the tax implications, I just don't want to be heavily invested in my company) and will have a little over $10k in my bank account next week. My plan is to open a Vanguard account and contribute $5,500 to a Roth IRA (I already have a Roth 401(k) through my company), with the remaining $4,500 going to a personal investment account - likely the Vanguard LifeStrategy Growth fund (80+% stock) for each. Is this a good plan? I know market timing is a fool's errand, but I'm still anxious about making my largest single investment yet, and at the height of the market at that.
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Jul 2, 2014 17:17
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That's why you diversify - at that asset level most likely through a target retirement fund. If the US market crashes it'll rebalance international and bond money into the now-lowered US stock. From the sound of it you have no cash emergency fund so honestly I'd keep the last $4500 for that.
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Jul 2, 2014 17:36
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I honestly don't see a need for a cash emergency fund, unless I'm unemployed. Why keep cash idle when you've got $50k of credit cards available, no debt, and the ability to transfer money from your investment account to your checking account within ~1 week?
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Jul 2, 2014 21:51
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How do I pay my mortgage for the next 6 months after losing my job? You can't exactly throw that on a CC.
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Jul 2, 2014 21:57
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With the $10k that I can easily liquidate from my investment account? And you can definitely throw at least partial rent on a CC - I pay $500/mo of my rent from Amazon Payments on my Discover card every month just for the rewards.
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Jul 2, 2014 21:58
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Your credit card has to be repaid monthly, so you're just delaying your emergency by a month. Your sell-the-investments plan works just fine as long as you time all your emergencies around market performance.
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Jul 2, 2014 22:01
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Radbot posted:I honestly don't see a need for a cash emergency fund, unless I'm unemployed. Unfortunately then it's too late. Also, if you break both your legs in an awful car crash(or both your arms if you're going to say "well I can just work from home  " ), disability payments through your work will last for a certain amount of time and be limited to a certain percentage of your salary. Emergency funds are good for that kind of situation. Life is full of poo poo you didn't plan for.
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Jul 2, 2014 22:02
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I'm just starting out investing, so I figured I'd run my ideas by you guys first. I'm 24 with a full time job earning ~50k/year. Right now I'm putting 11% away into a 401k (I work for a small company with no employer match). I have about $68k in student loan debt (because I was stupid and went to a private school for grad school), and since I'm on the 10-year repayment plan, my payments amount to ~950/mo. On top of that, I have health care through the exchange so I pay ~250/mo. Fortunately, I live with my folks so I don't have to pay for rent or food. After personal expenses, I usually end up putting $1000-1200 into savings each month. Right now, I have $34k between my checking and savings accounts. My three main priorities right now are: 1) Paying off student loans, 2) Saving up for a down payment to buy a house or a condo, and 3) Putting money away for retirement. For #1, most of my loans are at 6.55%. However, I do have one loan (which is my largest single loan) for $12.2k at 7.65%. If I were to use my savings to pay that one off now, my loan payments would drop by $222.11 per month. That gives it a simple payback of 4.6 years. Paying off any of the other loans in one shot would have a simple payback of over 6 years. Do you think paying off the big loan now (at the cost of $12.2k I could be investing) is a decent idea? As for #2, I feel the best way to accomplish this is to wipe out my student loans so I can start putting away more of my paycheck. #3 is the other area where I'd like some advice. Right now, my company uses Austin Capital for our 401k, and the plans they offer us are ridiculously lovely--I'm talking expense rates of between 1.69 and 2.3% for all of the funds they offered. My coworker and I are trying to convince the owner to switch to something like Vanguard. Right now I have ~$6k in my 401k; if we can convince the owner to make the switch, I'll transfer it all to a Target Date fund (if available). Otherwise, I'll probably end up rolling it over to an IRA myself. Does this seem wise? Thank you for the help!
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Jul 2, 2014 22:17
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Hmm, so you have about $24000 cash plus $1500/mo to work with. There's a wide range for what might be reasonable - you could probably find someone here to argue for anything from putting it all to loans (no retirement funding at all) to putting it all to retirement accounts except the loan minimums. Me, I would maybe compromise somewhere easy: pay off the 7% loan like you said; max out a Roth IRA at $460/mo; and put the other $1000/mo to loans. How long can you stand to live with your parents? You may need to plan an exit strategy there as well... I agree with you about a house purchase - paying off the loans first may delay it a bit but will make it a lot more comfortable.
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Jul 2, 2014 22:43
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Grope-A-Matic posted:I'm just starting out investing, so I figured I'd run my ideas by you guys first. You can't move the 6k off of your 401k until you leave the company. Convincing your owner to use Vanguard or a better company would significantly help. On the subject of loans, I would try to pay off a majority of the loans as soon as possible. A 6% or 7% guaranteed return on investment (by paying off your loans) isn't bad at all.
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Jul 3, 2014 00:01
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GoGoGadgetChris posted:Your credit card has to be repaid monthly, so you're just delaying your emergency by a month. To play devil's advocate a bit: I feel like people stress the importance of having an emergency fund way too much. It seems like an easy thing to point out so everyone rushes to point out that you should have 6 months, without really thinking about life circumstances. Ways to comfortably live life without investing in a -2%/year after inflation "emergency fund": 1) Build up equity in your house, open up a HELOC and don't use it unless you lose your job or something along those lines 2) Have a spouse with a job and expenses such that you would BOTH need to lose your job for it to be a problem 3) Keep some funds in a short term bond fund. It is unlikely to tank very much and at least it should almost keep up with inflation. 4) Have a job that you are supremely confident that finding another job is trivial, even in a terrible economy (Some sort of disability insurance here is good, provided by many employers)
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Jul 3, 2014 01:57
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Grope-A-Matic posted:I'm just starting out investing, so I figured I'd run my ideas by you guys first. I would also start your Roth IRA especially since your 401k doesn't have a match and also has the standard high expense funds. Makes sense to max out your Roth while you still meet the income requirements and then focus on your 401k savings. congrats on starting saving early.
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Jul 3, 2014 02:04
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Vilgan posted:To play devil's advocate a bit: Well yeah, but not everyone can meet all of those. I don't own a house, I don't have a spouse, and I feel like being supremely confident in your job is a terrible idea no matter what (hey, I'm a badass engineer but nothing could save me when I lived in the Detroit area in 2006). Short term bonds or CDs, on the other hand, are totally viable for an emergency fund. Throwing it in stocks is crazy to me, but nothing wrong with bonds and CDs. However, I think that when you're starting out saving and don't have the means to max out a Roth IRA AND have a total safety net emergency fund, it's probably smart to throw money in that Roth IRA and call that your "break the glass in case of emergency" money. Sure, it'd be a shame if you pull that money back out because you'll be forfeiting your Roth contribution for that year. But if you keep it in an emergency fund instead, you're forfeiting it anyway. And you can always pull the principal you contribute to the Roth. You just might want to consider keeping the Roth in a mutual fund or bonds until you've built up a true standalone emergency fund.
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Jul 3, 2014 02:14
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Vilgan posted:To play devil's advocate a bit: 1- I pile this in with "keep a credit card with a high limit you don't use in a safe." It seems incredibly lazy, and it guarantees that you are paying a higher price than if you paid cash for the same item unless you repay all of it in a month. 2 - I would add that the spouse should be in an unrelated field, otherwise the layoff risk is compounded. And don't have kids. And don't get divorced. 3 - sounds good 4 - be arrogant, I guess? I mean, what the hell?
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Jul 3, 2014 02:31
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As an individual investor there is very little reason to hold any short term bonds at all, so I take exception to #3. Savings accounts can be as much as 1% interest right now with zero risk, so buying any bond with a YTM less than that is purely irrational since the bond will come with interest rate risk. 5 year CDs are also FDIC insured and go up to 2.3% now, usually with an early withdrawal penalty of 6 months interest. It's hard to beat that with treasuries unless you go well into intermediate duration. The short-term bond market is mainly driven by large institutions that are forced to by short-term treasuries for one reason or another.
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Jul 3, 2014 03:39
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Vilgan posted:To play devil's advocate a bit: At best, these make assumptions that don't apply to a number of the people in this thread's current life circumstances and are missing the boat as to the point of this thread. At worst, they're not grounded in reality, most specifically #4. Either way, they're profoundly naive.
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Jul 3, 2014 04:01
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Anyone ever hear Credit is King? No, its Cash is King. For a reason. Job loss can make a HELOC go away, or shrink a credit card's limit, etc. It can't shrink your efund tho, until you dip into it. And it also won't need to be repaid because the efund is already yours... I would say not everyone needs a 6mo fund, but 3mo is basically the bare minimum. Anyone who is making the decision to do less should be educated in why to have it, and be able to make their own decision. Hence, advice given to interweb strangers should be for 3-6mo in virtually every situation.
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Jul 3, 2014 04:09
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SiGmA_X posted:I would say not everyone needs a 6mo fund, but 3mo is basically the bare minimum. Anyone who is making the decision to do less should be educated in why to have it, and be able to make their own decision. Hence, advice given to interweb strangers should be for 3-6mo in virtually every situation. Yep, and no matter how much you think you're kick rear end at money and managing risk and credit, not having at least one month's expenses in cash is basically asking for trouble. I personally keep 3 months and feel it's high, but my wife has a lower risk tolerance so I keep her happy with that.
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Jul 3, 2014 05:25
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So I left my job of 7 years back in mid may and was invested in their 401k plan. My new job has a pension, so I'm looking to transfer my 401k to some sort of IRA. This is all very very new to me and am trying to figure out the best option. From what I understand if I have my job cut the check directly to my chosen IRA place (still have no idea what kind of options I have) I won't get 20% withheld? I'm thinking a Roth IRA is the best bet (again no idea). I'm reading through the links and this thread, but it's a lot to wade through and pretty overwhelming. Advice would be greatly appreciated!
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Jul 3, 2014 08:06
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Vilgan posted:1) Build up equity in your house, open up a HELOC and don't use it unless you lose your job or something along those lines I like how HELOC are still considered some sort of financial panacea that can replace a real emergency fund. Yes because paying money out of pocket for closing costs (which you will never get back), navigating red tape at a bank that is trying to sell you a product, and paying a variable interest rate on a loan is just so appealing. Hmm yes and in a true emergency surely I will have the money to pay back the HELOC every month, guaranteed. Sure there are many, many fallbacks (loans, credit, selling organs) in a true emergency but only one has no future strings attached unless you seriously think the rate of inflation is a "terrible string to have attached." I don't disagree that not everyone needs a full 6 month buffer but assuming you can skate by with nothing earmarked is highly optimistic.
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Jul 3, 2014 11:42
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"Build up equity" is also not necessarily a great strategy for emergencies either since you can pay a ton of extra money on your mortgage every month and still have the value drop due to any number of unforeseen circumstances, which wouldn't allow you to get a HELOC if it takes you underwater. I'm 8k ahead on my mortgage payments but significantly underwater because it's lost 50k in value.
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Jul 3, 2014 13:35
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slap me silly posted:Hmm, so you have about $24000 cash plus $1500/mo to work with. There's a wide range for what might be reasonable - you could probably find someone here to argue for anything from putting it all to loans (no retirement funding at all) to putting it all to retirement accounts except the loan minimums. Me, I would maybe compromise somewhere easy: pay off the 7% loan like you said; max out a Roth IRA at $460/mo; and put the other $1000/mo to loans. ntan1 posted:You can't move the 6k off of your 401k until you leave the company. Convincing your owner to use Vanguard or a better company would significantly help. Thank you both for the advice! I talked to my boss yesterday and she's in favor of switching away from our current plan--we're just waiting until September or October for tax reasons and because we re-upped with Austin Capital less than a year ago. I think I'm going to go ahead and pay off that big loan, roll over my current 401k to the new plan when we switch, and start contributing to a Roth. As for how long I can stand living with my parents--all of my siblings moved back in with my parents for several years as adults, so the pressure to get out and buy my own place is pretty low haha. I guess a rough goal would be to move out around two years from now--ideally, I'll have my PE license and be making a fair amount more money, and I'll have paid off one or more of my loans and brought my monthly payments to more reasonable levels. EDIT: I talked to the coworker who's been pressing the 401k issue to my boss along with me. The company we're considering switching to is Employee Fiduciary, which focuses on 401k plans for small businesses. The rates seem to be pretty low and they offer just about any plan (including Vanguard) we want for no overhead. Just out of curiosity, is our company only allowed to have a 401k plan with one provider at any given time? For instance, could we open up a plan with Employee Fiduciary while we're still on contract with Austin Capital and just put all our contributions in the new plan while waiting for the old contract to run out? Or are there legal/contractual reasons preventing this? Grope-A-Matic fucked around with this message at 15:17 on Jul 3, 2014 |
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Jul 3, 2014 14:38
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I've done all the typical things recommend in this thread. Maxed Roth and 401k and I'm finding I have about $12k more in my emergency fund than I need. What should I do with it? I'm not yet a home owner so I don't really want to lock the money away. But at the same time I'd like to be more aggressive than bonds. Should I consider open a taxable account with Vanguard? I'd probably throw it in a far away target retirement date fund. But what would be the implications if I were to withdraw any or all of the balance?
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Jul 3, 2014 15:00
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FlyWhiteBoy posted:I've done all the typical things recommend in this thread. Maxed Roth and 401k and I'm finding I have about $12k more in my emergency fund than I need. What should I do with it? I'm not yet a home owner so I don't really want to lock the money away. But at the same time I'd like to be more aggressive than bonds. Should I consider open a taxable account with Vanguard? I'd probably throw it in a far away target retirement date fund. But what would be the implications if I were to withdraw any or all of the balance? Target retirement funds aren't great for taxable accounts because whenever the fund rebalances, it's a taxable event.
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Jul 3, 2014 15:21
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Nail Rat posted:Target retirement funds aren't great for taxable accounts because whenever the fund rebalances, it's a taxable event. Also since it is a "fund of funds" I believe it also disallows the foreign tax credit for the international portions.
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Jul 3, 2014 15:54
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Vanguard has a range called LifeStrategy that could be helpful. Pick your stock/bond/cash ratio based on how long you think you'll keep it in there. But if you're going to buy a house or a car in the next 3-5 years just leave it in cash.
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Jul 3, 2014 17:09
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slap me silly posted:Vanguard has a range called LifeStrategy that could be helpful. Pick your stock/bond/cash ratio based on how long you think you'll keep it in there. But if you're going to buy a house or a car in the next 3-5 years just leave it in cash. Try and look for high interest checking accounts with your local credit unions. They might be a good place to accrue 2-3% APY while you let it sit.
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Jul 3, 2014 17:45
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ETB posted:Try and look for high interest checking accounts with your local credit unions. They might be a good place to accrue 2-3% APY while you let it sit. Where are you finding rates like those? I can't find a local CU offering better than 1% APY.
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Jul 3, 2014 17:47
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Radbot posted:Where are you finding rates like those? I can't find a local CU offering better than 1% APY. I'm out in the PNW. Maybe our unions are cooler than yours. 
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Jul 3, 2014 18:27
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ETB posted:I'm out in the PNW. Maybe our unions are cooler than yours. Even BECU isn't offering anything close to that.
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Jul 3, 2014 18:28
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Vilgan posted:To play devil's advocate a bit: Quoting myself for context, since there were a variety of replies. I think the main point I was trying to make is that there are a variety of situations where a 6 month emergency fund makes sense. But people always throw it around and keep reiterating it without any context to determine if it is appropriate. Is a single job loss or unexpected large expense going to cause a downward spiral that could make life really suck? If yes, you definitely need an emergency fund. If no, then evaluate options and figure out what your plan is in a variety of situations. Some absurdly high % of people don't have much of a buffer in life/expenses/etc and should have an emergency fund but many of them aren't worried about 401k's, investments, etc and wouldn't be in this thread anyway. I think the main thing is: have a plan for a job loss or huge expense. Be comfortable with it. If that plan is keeping 6 months of expenses in cash, then that is a very good idea but it isn't the only way.
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Jul 3, 2014 19:06
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You also have to figure how much you'd receive in unemployment and/or disability payments each month. If your expenses are low, then unemployment alone might cover it and you need less of an emergency fund. If you have a ridiculous lifestyle with mounds of debt...you definitely need an emergency fund.
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Jul 3, 2014 19:17
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| # ? May 26, 2024 13:04 |
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I'd like some opinions on how I currently have my 401k balanced vs what I have available to me. This is how my current 401k is set up.pre:Prudential High Yield Fund 10.00% $1,567.43 T. Rowe Price Retirement Income Fund 15.00% $1,644.87 SSgA Russell Small Cap Index Securities Lending Series Fund 10.00% $459.48 ClearBridge Small Cap Growth Fund 20.00% $1,948.56 Oppenheimer International Growth Fund 15.00% $1,118.94 Franklin Mutual Global Discovery Fund 15.00% $1,553.51 Oppenheimer Developing Markets Fund 15.00% $1,421.94 pre:Fund Name Asset Symbol ER % SSgA Cash Series U.S. Government Fund Money Market-Taxable --- 0.75% PIMCO Low Duration Fund Short-Term Bond PLDRX 1.05% PIMCO Total Return Fund Intermediate-Term Bond PTRRX 1.10% SSgA U.S. Bond Index Securities Lending Series Fund Intermediate-Term Bond --- 0.72% Prudential High Yield Fund High Yield Bond JDYRX 1.08% T. Rowe Price Retirement Income Fund Retirement Income RRTIX 1.07% T. Rowe Price Retirement 2010 Fund Target Date 2000-2010 RRTAX 1.10% T. Rowe Price Retirement 2015 Fund Target Date 2011-2015 RRTMX 1.15% T. Rowe Price Retirement 2020 Fund Target Date 2016-2020 RRTBX 1.19% T. Rowe Price Retirement 2025 Fund Target Date 2021-2025 RRTNX 1.22% T. Rowe Price Retirement 2030 Fund Target Date 2026-2030 RRTCX 1.25% T. Rowe Price Retirement 2035 Fund Target Date 2031-2035 RRTPX 1.27% T. Rowe Price Retirement 2040 Fund Target Date 2036-2040 RRTDX 1.28% T. Rowe Price Retirement 2045 Fund Target Date 2041-2045 RRTRX 1.28% T. Rowe Price Retirement 2050 Fund Target Date 2046-2050 RRTFX 1.28% T. Rowe Price Retirement 2055 Fund Target Date 2051-2055 RRTVX 1.28% American Century Strategic Allocation Conservative Fund Conservative Allocation AACRX 1.50% BlackRock Global Allocation Fund, Inc World Allocation MRLOX 1.49% Franklin Moderate Allocation Fund Moderate Allocation FTMRX 1.45% BlackRock Equity Dividend Fund Large-Cap Value MRDVX 1.29% SSgA S&P 500 Index Securities Lending Series Fund Large-Cap Blend --- 0.71% MainStay Large Cap Growth Fund Large-Cap Growth MLGRX 1.37% Victory Established Value Fund Mid-Cap Value GETGX 1.23% SSgA S&P MidCap Index Non-Lending Series Fund Mid-Cap Blend --- 0.72% Janus Enterprise Fund Mid-Cap Growth JDMRX 1.43% AllianzGI NFJ Small-Cap Value Fund Small-Cap Value PNVRX 1.42% SSgA Russell Small Cap Index Securities Lending Series Small-Cap Blend --- 0.97% ClearBridge Small Cap Growth Fund Small-Cap Growth LMPOX 1.47% AllianzGI NFJ International Value Fund Foreign Large-Cap Value ANJRX 1.53% SSgA International Index Securities Lending Series Fund Foreign Large-Cap Blend --- 0.99% Oppenheimer International Growth Fund Foreign Large Growth OIGNX 1.40% Franklin Mutual Global Discovery Fund World Stock TEDRX 1.52% Oppenheimer Developing Markets Fund Diversified Emerging ODVNX 1.55% Nuveen Real Estate Securities Fund Real Estate FRSSX 1.53% Details: 27, 73k gross salary, ~7k in a Vanguard Target 2055 IRA, 25k emergency fund
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Jul 3, 2014 21:47
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