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Home > 401(k) Help Please!

401(k) Help Please!

June 27th, 2015 at 12:58 pm

I've paid off 3 CCs and upped my contributions to my IRA. However, I recognize that this isn't enough and I want to start participating in my company's 401(k). Now the company doesn't match, but I'd like to contribute about 2-3%.

The problem is that I have no clue on which funds to pick. I think I'm aggressive a tad bit and want to see my funds grow quickly. I'm also conservative now with how I spend my money. So I guess I'm in the middle

Just wondering if you all can help me pick some funds? If so, that would be great. I've included a screen shot of the funds offered below.





Posted in Miscellaneous | 11 Comments »

11 Responses to “401(k) Help Please!”

  1. Tabs Says:
    June 27th, 2015 at 01:38 pm 1435412301
    1435412301

    Well, all the funds are there so you have a variety of choices you can pick depending on what type of investor you are.

    However, if you just want absolutely the easiest choice, I would stick with 100% Vanguard target investment fund.

    I don't know how old you are, but it looks like you picked 100% into 2040 so if that's your targeted year for retirement, then you are all set.

    The thing about these funds, though, is that it is best not to "diversify" into other funds, because they are already pre-allocated and pre-diversified for you, so picking other funds could "muck" it up so to speak. Really, there's no reason to do so.

    I could say more about it, but a better place to ask about details is in the forums. For now, that's good enough, assuming that you are happy with 2040.

  2. Ima saver Says:
    June 27th, 2015 at 02:04 pm 1435413886
    1435413886

    I agree with Tabs. Vanguard is a good choice.

  3. Carol Says:
    June 27th, 2015 at 02:09 pm 1435414144
    1435414144

    If 2040 is right, I echo what Tabs said.

  4. MonkeyMama Says:
    June 27th, 2015 at 02:20 pm 1435414809
    1435414809

    I would choose VG because it is the lowest cost fund. VG 2040 is quite aggressive (90% stocks). Just keep in mind that these funds are fairly aggressive. We chose a much earlier retirement date fund, accordingly. Since you wanted aggressive, maybe this is the right choice for you.

  5. AnotherReader Says:
    June 27th, 2015 at 02:26 pm 1435415206
    1435415206

    Two of the most important aspects of investing are proper asset allocation and the costs of the investments. For someone that does not want to spend a lot of time learning about investing, a Vanguard target date fund is probably the best choice. Vanguard operates some of the lowest cost mutual funds in the industry.

    A target date fund is comprised of other mutual funds. The allocation among the various classes of stocks and bonds are adjusted over time, consistent with your retirement date. As you approach that date, the funds become more bond-oriented. Vanguard's target date funds are made up of their very low cost index funds. It's the least expensive "set it and forget it" option and it gives you broad exposure to the stock and fixed income markets.

  6. ceejay74 Says:
    June 27th, 2015 at 02:32 pm 1435415538
    1435415538

    Agree w/Vanguard. It is all about cost and having indexed vs. actively managed funds. My company offers some Vanguard funds and a bunch of other stuff, and Vanguard charges a tenth of what the others do. A 1% cost is going to eat away 30% of future returns; a 2% cost will take 60% of what you would have earned. Vanguard typically charges more in the 0.1% (more for international funds, but still amazing).

    My eyes were opened when I watched the Frontline documentary "The Retirement Gamble."

  7. Amber Says:
    June 27th, 2015 at 02:41 pm 1435416079
    1435416079

    Thanks everyone, I knew I could count on you. I'm 41 so the target date is the 2040. I've made the selection and now I'm just going to leave it. I figured 3% should be enough, for now and will gradually increase.

    Thanks again

  8. scfr Says:
    June 27th, 2015 at 03:15 pm 1435418153
    1435418153

    I think you've made a wise choice. One thing to keep in mind when choosing a Target Date Retirement fund is that you don't have to choose based on the year you want to retire. You can choose based on the asset allocation that suits your needs. For example, even if you are planning to retire in 2040, you could look at a few funds on either side of that (2030, 2035, 2045, 2050) and decide which one is the best fit for you.

    Also, for now you are probably good with just one fund, but as the balance grows you can fine tune the asset allocation by splitting between two Target Date Funds. There is no rule that says you have to stick with just one! Just as an example, you could put 70% in the 2040 fund and 30% in the 2035 fund if that got the "perfect" asset allocation for you.

    And this has nothing to do with your question, but I think it's a bit odd that the Target Date funds are listed out of chronological order!

  9. Tabs Says:
    June 27th, 2015 at 03:54 pm 1435420451
    1435420451

    I agree with scfr. I just didn't mention that part because well I didn't want to uh make my own wall of text too complicated haha.

  10. Amber Says:
    June 27th, 2015 at 05:51 pm 1435427473
    1435427473

    Thanks again. I'm glad you SCFR mentioned it, and please Tab don't be afraid, I value all of you all opinions. I'm new to this, a little late in the game, but I'm willing to learn. Thank you all again.

  11. Househopeful Says:
    June 27th, 2015 at 09:27 pm 1435440448
    1435440448

    I am all for the Vanguard funds as well. I utilize a few different target funds (such as Target 2035 and 2030) - and pay close attention to the costs as well as historical returns. As your investment into the plan grows, I would suggest varying some of the funds you invest in.

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