IRA and 401k Savings not sure what to do

[jgraham114]

I currently have a traditional IRA with Wells Fargo as well as a 401k plan with my employer.

The traditional IRA comes from my previous employment where it rolled over from a 401k when I was laid off. Right now, the traditional IRA is sitting in my wells fargo account doing nothing because I have no idea how to invest any of it.

I also have no idea what to invest my 401k in because I don't know what all the numbers mean. My employer does not offer a 401k match at this time but might in the future.

I'm wondering if anybody has any advice or if they can point me in the right direction to figure out what to do with investing my Traditional IRA and choosing the right investments for my 401k.

I'm 27 right now so I need to plan for my future.

[DRILLINDK]

I pretty much do this (read through this thread to jumpstart your education. Vanguard offers some of the best and lowest expense mutual funds out there):

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=88005

I would move drip your funds into the market slowly every month for the next 3-5 years effectively easing yourself into the market.

Hope this helps!

[jgraham114]

Thanks for the information. I guess I have some reading to do. I really have no idea what any of the numbers mean or which mutual funds are good for my situation and ones I should avoid. What fund stats should I be looking at to make my decision?

[Petunia 100]

Hi JGraham,

I am a big fan of the Bogleheads site too, but, it is not very beginner friendly. On the MorningStar site, they have a feature called "Investing Classroom". It is very beginner friendly. You can find it here:

http://www.morningstar.com/cover/Classroom.html

In response to your first post, I would not buy ANY mutual funds from Wells Fargo. I have my traditional IRA at Wells Fargo too, but I have a brokerage account and buy only low cost index ETFs. If you want to stay at Wells Fargo, get a Wells Trade brokerage account. If you want to buy mutual funds, transfer your traditional IRA elsewhere. Vanguard is an excellent choice. More specifically, a Vanguard Target Retirement Fund is an excellent choice. They are broadly diversified among US stocks, foreign stocks, US bonds and soon will be adding foreign bonds. They slowly grows more conservative over time. They have a rock bottom expense ratio.

If you will list the investment choices inside your 401k, I am sure you will get some opinions regarding which to choose.

[jgraham114]

I can post my 401k things later when I have time to look them up.

My Wells Fargo account is a brokerage account but nothing is invested. There isn't much in the account at the moment.

Thanks again

[DRILLINDK]

These three funds are all you want:

Vanguard Total Stock Market (VTSMX)
Vanguard Total International (VGTSX)
Vanguard Total Bond Market (VBMFX)

Depending on your age, you should divide your funds up amongst the three funds. A younger person should be heavier in stocks and perhaps only a small percentage (5-10%) in the bond market fund. You want to be heavier in bonds and smaller in stocks the older you are and closer to retirement you are.

There are many reasons why -ie low expenses, yearly returns, etc; but are better explained in the link I provided earlier.

Just set the funds up so they automatically drip in slowly over a long period of time. Check back in a decade or so and you should be fine.

[Petunia 100]

I can post my 401k things later when I have time to look them up.

My Wells Fargo account is a brokerage account but nothing is invested. There isn't much in the account at the moment.

Thanks again

Do you get free trades? I get 100 free trades per year, because I have a PMA account. I get my PMA for free, because of the balance in my brokerage account. I love how that works.

If you will have to pay a fee each time you trade, you will be better off with a low-cost mutual fund, IMO.

[jgraham114]

Here is a list of my 401k investment options:


SSgA Cash Series U.S. Government Fund - Class L
PIMCO Total Return Fund - Class A
DWS Global High Income Fund - Class S
SSgA Aggressive Strategic Balanced Securities Lending Series Fund - Class VII
SSgA Conservative Strategic Balanced Securities Lending Series Fund - Class VII
SSgA Moderate Strategic Balanced Securities Lending Series Fund - Class VII
DWS Large Cap Value Fund - Class A
Putnam Equity Income Fund - Class A
Franklin Rising Dividends Fund - Class A
SSgA S&P 500 Index Securities Lending Series Fund - Class IX
Calvert Equity Portfolio - Class A
T. Rowe Price Blue Chip Growth Fund - Class R
SSgA S&P MidCap Index Non-Lending Series Fund - Class J
Nuveen Mid Cap Growth Opportunities Fund - Class A
AllianzGI NFJ Small-Cap Value Fund - Class A
SSgA Russell Small Cap Index Securities Lending Series Fund - Class VIII
Alger Small Cap Growth Institutional Fund - Class I
Janus Overseas Fund - Class S
Templeton Growth Fund, Inc. - Class R

I can get data for each fund but the table didn't copy over properly to the forum