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ANY Help with 401K appreciated

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  • #16
    Thanks for all your help! To answer your question yes DH company has a 50% match up to 6%(so 3%) and yesterday when I just couldn't figure out why I couldn't find the things recommended I just googled "401K doesn't offer index funds" and yep, things came up that said sometimes companies do not have them only active funds and they recommended, like you also said, to write a letter to the company asking them to add that. So we'll see what we can do there. I will also look up those books recommended!

    Someone also asked what the percentages meant. I signed up to have them automatically adjust the investments in line with retirement. So the first percentage is today and the 2nd row of percentages is 20 years from now at retirement. I just wasn't positive if it was the right thing to do or if I should have chosen them myself or what I should do.

    I know we will never have a million dollars saved even though I know that is "recommended" (or more). Our income has risen in the past 2-3 years (from like 40K to 70K) So what we saved back for the last 15 years for retirement, although faithfully, wasn't a lot. I feel like since we are earning a little more now, we can save a little more. I just want to make sure what we do contribute is being done the best way.

    Again thanks for all the help. I knew there were smart folks here

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    • #17
      From your posts it is clear you are making progress learning about this. Congrats for the effort, you will be glad you did it.

      Vanguard and Fidelity are companies that offer low-cost mutual funds. Apparently your 401k has not contracted with either of those firms to permit access to their funds, nor to any "index" type funds. As others have suggested, asking the 401k administrator to expand the offerings is a step you can take, but do not expect such change to happen quickly.

      Typically included with the possible mutual funds you can choose for your 401k is a table showing the expense ratio of each, as well as performance during recent years. If you can't find that info, you can request it from your 401k provider. Alternatively, you can look it up online yourself, though that's more work of course.

      Yahoo is one of the better free sites with such info. For example, http://finance.yahoo.com/q?s=LSBRX tells you about Loomis Sayles Bond Retail. The LSBRX is what is called the "ticker symbol" for that fund. A ticker symbol uniquely identifies the fund. Each publicly traded stock, as well as several other types of investments, also have their own unique ticker symbol.

      That Yahoo link tells us that LSBRX has a 0.91% expense ratio. If all your 401k options are around that same somewhat-high expense ratio, well, you have no better option so must make do.

      Your 401k list already has the general category of each fund, but Yahoo shows you more detail should you want it.

      Keep studying and asking, you are making progress.

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      • #18
        We would all like 401ks to offer solid mutual funds which are low cost.

        Please realize it is better to have a good asset allocation than it is a low cost selection of funds. Asset allocation matters more than costs.

        I would not worry about investment costs until you learn how to invest and make choices, the cost of a mutual fund will range from .05% to 2.5%. Most choices will be between .05% and 1.5%. These costs cover trading fees and managers salaries.

        Jim

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        • #19
          Of the fund options you have, one possible allocation that achieves diversification for someone about age 40 follows below. Note I have not studied the expense ratio nor recent performance of your fund options, so do not consider this a recommendation. It's merely to illustrate how you could diversify among stocks/bonds, US/international, and one "different" asset class (real estate) without getting too complex. Many such combinations are possible. Which combination will produce the maximum performance going forward? No one has a good enough crystal ball to know.

          25% Franklin Growth
          25% ClearBridge Small Cap Growth A
          20% Loomis Sayles Bond Retail
          20% Oppenheimer Developing Markets
          10% Voya Real Estate

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          • #20
            Originally posted by MakeAStash View Post
            Since TR Price is a second-rate outfit, most people instead choose funds from Vanguard or Fidelity, if those are available to you.
            I don't know where you get the idea that T Rowe is a second-rate outfit. Granted they aren't known for their indexing like Vanguard is but their funds hold their own, especially their Target Date Funds.

            10-year returns on the 2035 funds for T Rowe, Vanguard and Fidelity are:
            7.14%, 6.53% and 5.63% respectively

            10-year returns for the 2015 funds for the same grouping are:
            6.40%, 5.92% and 5.63%

            May prove to different in the VERY long run but I'm not worried holding T. Rowe Price funds.
            The easiest thing of all is to deceive one's self; for what a man wishes, he generally believes to be true.
            - Demosthenes

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            • #21
              I can't say how I know, but I would not want to be holding any T. Rowe Price money market funds now. The value of money market funds is not guaranteed to maintain a $1/share value. Their other funds have at least SIPC protection, I believe, so investors should get their money back eventually.

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              • #22
                Originally posted by MakeAStash View Post
                I can't say how I know, but I would not want to be holding any T. Rowe Price money market funds now. The value of money market funds is not guaranteed to maintain a $1/share value. Their other funds have at least SIPC protection, I believe, so investors should get their money back eventually.
                I'm not talking about MM funds, I'm talking about investing.

                And all non-government institutional MM funds are going to have a floating NAV per the SEC's new fund reform so they may not maintain $1/share either.
                The easiest thing of all is to deceive one's self; for what a man wishes, he generally believes to be true.
                - Demosthenes

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