Roth IRA suggestion please

[kv968]

Re: Roth IRA suggestion please

that is interesting

I never had intended to stay with my target retirement fund any longer than necessary. It was a great way to get day 1 diversification in my Roth. After a few years have passed and there's enough money in my account, I plan to "take the reins" myself.

Time will tell how boneheaded a decision that turns out to be.

I'm doing the same thing. Once enough gets accumulated to diversify it properly I'm planning on splitting up my target retirement fund too. And like rexdart said, "Time will tell how boneheaded a decision that turns out to be."

I agree with the article, target funds don't represent the very best allocation you could get in a portfolio. However for people who don't understand investing nor have the time or the inclination to learn about it, I think it's a great place for them to invest. I've seen too many people who just "set-it-and-forget-it" and the fund or funds that they do it with aren't necessarily meant to be held that way for a long time without an occasional tweek.

[disneysteve]

Re: Roth IRA suggestion please

target funds don't represent the very best allocation you could get in a portfolio.

I also think a lot of people are defeating the purpose of the target funds by investing, for example, their Roth money in a target fund, but then investing their 401k money in several other funds and some taxable investments in still other funds. They lose sight of the overall allocation of their portfolio.

[rerod]

Re: Roth IRA suggestion please

At the moment Im trying to understand why I didnt keep track of my CREF growth allocation. Im the bone head now. What a dog.

T rowe has a personal advisor for a one time fee of $250. Anyone have experiance with that?

[kv968]

Re: Roth IRA suggestion please

I also think a lot of people are defeating the purpose of the target funds by investing, for example, their Roth money in a target fund, but then investing their 401k money in several other funds and some taxable investments in still other funds. They lose sight of the overall allocation of their portfolio.

I agree, but sometimes there's not much choice in the matter. In an IRA you should be able to choose pretty much whatever you want but with a 401K you're options are limited (sometimes TOO limited) so you have to make due with what you've got. Although you're also right in that people sometimes micromanage their accounts when they allocate funds. They may look at each account individually (ie. 401K, IRA, etc...) and feel they're balanced but fail to look at the overall, combined picture and see that their allocation may be way off of what they think it is.

[Broken Arrow]

Re: Roth IRA suggestion please

T rowe has a personal advisor for a one time fee of $250. Anyone have experiance with that?

Wow. I suppose I can see someone who has at least six figures invested that could see that as a reasonable price but it's way too much money in my opinion.

As for "taking the reins" eventually , may I suggest starting off with a small portion first? Say, have your new contributions re-directed to your own portfolio while leaving the rest in the usual target retirement fund. See how well you are faring, and then re-allocate more later when you feel more confident.

[kv968]

Re: Roth IRA suggestion please

I fear many people may not appreciate the fact of just because it's there doesn't mean you should use it (a bad fund) and the general lack of in depth education about 401(k) plans in the workplace doesn't help that understanding.

I do see a few "bad" funds some of my co-workers have, but the lack of understanding (or should I say interest in?) the 401k is what has me worried. Participation isn't the problem as most, if not all, give to one degree or another but the lack of knowledge or willingness to do anything is astounding.

I've taken it upon myself to try to educate (to the best of my ability) some of them about diversification and asset allocation but most just glaze over or aren't interested. A lot of them are 100% invested in company stock. Albeit I used to be too until I took it upon myself to really learn about investing but it's like talking to a wall when trying to show them the risks incurred with that approach. Some of them are just years away from retirement and have seen their porfolio get almost halved in the past due to the stock's performance.

The main thing I see that deters them to change is recent performance. The stock is up 12% which is great but my portfolio is up 17.5%. Not saying that my approach is the way to go but as long as they're making money they don't realize that there could be more to be had or, more importantly perhaps, how to try and guard in keeping it. It's very frustrating for me

[rerod]

Re: Roth IRA suggestion please

oh don't I know it.

many of my co-workers will ask me about the basics when they hear me babble about money and finance in idle conversation but we don't get far into the discussion before it's "ooh, look at that shiny thing over there" and the talk is pretty much over.

pretty frustrating

Same thing with my co-workers rexdart. Intelligence education and time are the major factors I feel.

Free investing classes are even offered.. PAID. But very few attend.

[kv968]

Re: Roth IRA suggestion please

Same thing with my co-workers rexdart. Intelligence education and time are the major factors I feel.

Free investing classes are even offered.. PAID. But very few attend.

That's the frustrating part. I know they don't have the immense amount of time and effort that I've put in researching all of this but when you try to give a quick rundown of things (even when they're the ones who ask) the glazing over is only minutes away. Maybe I have to add some colorful charts and free gifts the next time I go into an explaination