401k choices

[wouql]

I graduated from school in May and got set up with a 401k at work. Now I have to choose an investment plan for future contributions.

My choices are very limited, and frankly, I like the idea of just going with an index fund, whether it's the small, mid, or large cap they offer. But by default they put me in a "Lifepath 2040" plan which is targeted for individuals retiring around 2040 (I'd be 56).

I'm probably going to switch unless a lot of people think this is a good plan. Does anyone think this is clearly a better idea than an index fund? I have no interest in playing the picking-stocks game, and I'm tempted to split between the large, mid, and small cap index funds.

[puck36]

I would say mix it up between the 3 funds. Put in about 1/3 in each large, mid and small cap. You can alwas go ask someone at your bank for ideas. I bank a wellsfargo and my 401k at work is with a different company and my bank helped me pick what I should be in.

[disneysteve]

I can't say I really have a problem with a targeted retirement fund, but no way should you be in the 2040 fund as it will be far too conservative for your age. I would switch to 2050 or even later if you want to be more aggressive.

Check into the asset allocation of their "Lifepath" funds. At your age, you should be 90-100% in stocks. If those funds aren't that aggressive, I'd do what puck36 suggested and divide between the other options. Right now, large caps are coming back into style and will likely outpace small caps in the coming years, but you need exposure to all of them.

[Broken Arrow]

I agree with disneysteve. If it can be helped, you should push your retirement date back, and put most if not all of your assets in stocks.

[puck36]

I'm only 28 yrs old and this is what I'm in for my 401k thanks to the help from my bank.

AllianceBernstein LP - LargeCap Sep Acct
Principal Global Investors - Large Cap Sep Acct
Mellon Equity - SmallCap Blend Sep Acct
Principal Global Investors - Medium Company Blend Sep Acct
Fidelity Management & Research - International Sep Acct

[WellManicuredMan]

My 401(k) is at Vanguard and I put everything into the Target Retirement 2045 (Symbol = VTIVX). I'm 26 years old so I'd be 65 in 2045 which fits me well. It is 90% stock and 10% bonds. I'm not really sure that anyone should be 100% stock no matter how young they are. It's always good to have a little cushion in bonds. If you don't want to play the stock game, a target retirement is an excellent choice in my opinion.

I'm thinking of opening a ROTH IRA soon and may even put that money into the same fund simply because I can't find anything better when I don't have the time to play the stock game.