Fallen_Hero
Member
It is like a 0.65% vs 0.12% expense ratio. Sounds like I should switch?
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How to Invest for Retirement
- Thread starter Piecake
- Start date
It is like a 0.65% vs 0.12% expense ratio. Sounds like I should switch?
Yes, absolutely. Piecake and others have run models up thread, but that's tens if not hundreds of thousands of dollars difference over 30 years and steady investing.
Edit: running a simple scenario for illustration:
Assume 8% annual growth, contributing $10,000 per year, and starting from nothing. The expense ratio reduces your growth rate, so you actually get 7.88%, or 7.35%.
7.88% for 30 years gets you $1,108,196
7.35% for 30 years gets you $1,006,230
Difference: $101,966
That's a huge chunk of your retirement savings. If you think the other fund will perform better over those 30 years and make up for the higher cost, then go for it. But the preponderance of data says, go with the index fund, because that's highly unlikely to happen.
(Hopefully didn't bork the numbers, doing a quick check before I run out.)
chaosblade
Unconfirmed Member
Personally, I would. That's over 5x more in fees, which will add up substantially over the years. And I wouldn't expect the Smartmix fund to outperform the market, and certainty not enough to make up for the the higher fees.
That's just my opinion though.
Unknown Soldier
Member
I'm assuming you're already all in on your 401(k) and your IRA, if so then paying a mortgage is the biggest tax break most people who are not in the wealth category of offshore tax havens can get.
This does mean you have a buy a home. You don't have to live in it though, you could rent it out to someone else.
Fallen_Hero
Member
I literally just moved everything to the Index Fund. Thanks guys! These fees are scarier than I thought.
Welcome to the club
anonymous_abc
Member
If you're contributing a part of your income every month then this is valuable.
If you have a lump sum to put down, there are many analysis that say droping it all asap is better than trying to spread it out and run the risk of timing the market.
time in the market > timing the market
Depends on when you get it in obviously . For example if you dropped 12k in the S&P 500 in 1929 by 1939 you would have had around 7.5k left, however if you started with $100 and deposited that every month for 10 years you would be up to 15k. In my opinion its a rather important concept to understand especially if you don't have a large amount of money to set aside for retirement, it really shows how you can be hands off and have your money work for you with small deposits.
The criticism of this type of strategy is that if you shift the start date back to 1919, then the person who put in a lump sum up front comes out much better than the dollar-cost-averager. DCA protects you if a crash occurs right after your deposit, but it exposes you to more risk if one occurs at the end of your investment horizon because you missed out on a lot of the gains. And historical modeling has shown that on average DCA does worse than lump sum.
If you are looking to reduce risk and sensitivity to market volatility, I think you are better off just putting a big chunk of your money in high quality bonds.
I think the value of DCA is mostly a psychological one; it helps people who have anxiety about the potential for a stock crash start investing, and those people will be better off with DCA than they would be sitting on their hands.
Lumination
'enry 'ollins
Possibly confusing tax question incoming.
In 2015, I contributed to a Roth IRA.
In March 2016, I realized I made a mistake and had to recharacterize my contribution to Traditional.
Afterwards, I converted that BACK to Roth.
Does the recharacterization go on my 2015 or 2016 tax return? What about the conversion? I'm using tax software for this year because of things like this and I'm having a hard time getting it to do what I want.
In 2015, I contributed to a Roth IRA.
In March 2016, I realized I made a mistake and had to recharacterize my contribution to Traditional.
Afterwards, I converted that BACK to Roth.
Does the recharacterization go on my 2015 or 2016 tax return? What about the conversion? I'm using tax software for this year because of things like this and I'm having a hard time getting it to do what I want.
That's good to know. Can you give me some sources so I can read up on it some more? Just to be clear I'm not doubting your credibility I'm actually interested.
Randolph Freelander
Member
Most of us dollar cost average by default. We contribute to our 401K every pay period, for example. Even for those of us that front load the contributions to get to the maximum earlier in the year are still spreading it out over however long it takes us to get there, and once you zoom out to the long view (also covering those who go heavy into the IRA at the beginning of the year), we're contributing towards our retirements incrementally over all the years of our working lives. We dollar cost average not as a matter of principle, but as a simple fact of when our money is available.
That said, when the money is available, go all in.
What are the advantages, if any, of opening up a separate IRA if I am not investing the max allowed amount in my 401(k).
I put 5% into my Roth 401(k) with a 20% match from my employer
Should I open an IRA and contribute to that or should I be maxing out 401k before that?
IRA's tend to have more investing options and lower Expense ratio's that you're charged. The quality of your 401k differs from plan to plan and the larger the corp. you work for the better the 401k typically.
Another advantage is you can remove principle money from your IRA penalty-free. Where as a 401k you can only remove the money you put in under a few scenario's such as becoming disabled.
Need advice:
I recently started a new job and have 3 former pension plans which currently are with my former employers but I want to move into either a Roth IRA or traditional IRA.
What is the best strategy here? Move all into 1 consolidated IRA account? I also have the option to move all into my new 401k plan but I'm not sure if that would be the best option.
I recently started a new job and have 3 former pension plans which currently are with my former employers but I want to move into either a Roth IRA or traditional IRA.
What is the best strategy here? Move all into 1 consolidated IRA account? I also have the option to move all into my new 401k plan but I'm not sure if that would be the best option.
I'm 28, and I recently started giving a fuck about my 401k with Fidelity through my job. There's about 15k in the 401k right now. My company matches 50% of my contributions up to 10% of my salary, so I just set up 10% contribution. When I've been here 5 years they'll match 1:1.
I changed from:
To:
Did I fuck any of that up?
I have about 3-4 months worth of emergency cash in a Wells Fargo savings account, for any unexpected stuff. I have relatively little debt and am paying them down (about $2k in dental debt, 0 other debt including credit cards, car payed off, student loans done).
Should I be saving more in my savings account for emergencies? Is this emergency cash better stored elsewhere than a savings account?
Should I start a Roth IRA at some point?
I'm not looking into buying a house or new car or any big purchases any time soon, so I want to save and do it right while I can. Thanks in advance for any advice.
I changed from:
- 100% - Fidelity Freedom K® 2050 Fund (FFKHX) - Exp Ratio 0.64%
To:
- 70% - SPTN TOT MKT IDX ADV - Spartan® Total Market Index Fund - Fidelity Advantage Class (FSTVX) - Exp Ratio 0.07%
- 20% - VANG TOT INTL STK AD - Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) - Exp Ratio 0.12%
- 10% - VANG TOT BD MKT ADM - Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) - Exp Ratio 0.07%
Did I fuck any of that up?
I have about 3-4 months worth of emergency cash in a Wells Fargo savings account, for any unexpected stuff. I have relatively little debt and am paying them down (about $2k in dental debt, 0 other debt including credit cards, car payed off, student loans done).
Should I be saving more in my savings account for emergencies? Is this emergency cash better stored elsewhere than a savings account?
Should I start a Roth IRA at some point?
I'm not looking into buying a house or new car or any big purchases any time soon, so I want to save and do it right while I can. Thanks in advance for any advice.
Lump me in with the rest that need everyone's sage advice 
What would be the best option with the following situation?
My company's retirement pension plan allows me to retire with (for all intents and purposes let's say my salary is flat until I retire) my current salary and then allocated based on the type of disbursement I choose. Along with that, I have a 457 (Vanguard LifeStrategy Growth Fund - VNGRD LIFGRO) where I contribute roughly 3-4% of my salary (I know, that's low, given current situation, I don't know if I can contribute more).
With those in place, I also had a gift trust established that has now matured and is sitting/growing in the following All Cap Growth Fund (TWGTX). It's current allocation is 100% stock, where I can modify the asset mix to a combination of stock, bond and money market funds. Assuming my emergency fund/liquid situation is ok, I'm not sure if this fund is adequate based on my other retirement vehicles and/or if I should look to reinvest in other vehicles or perhaps change up my asset mix?
Thanks in advance! This thread and those contributing within are fantastic!
What would be the best option with the following situation?
My company's retirement pension plan allows me to retire with (for all intents and purposes let's say my salary is flat until I retire) my current salary and then allocated based on the type of disbursement I choose. Along with that, I have a 457 (Vanguard LifeStrategy Growth Fund - VNGRD LIFGRO) where I contribute roughly 3-4% of my salary (I know, that's low, given current situation, I don't know if I can contribute more).
With those in place, I also had a gift trust established that has now matured and is sitting/growing in the following All Cap Growth Fund (TWGTX). It's current allocation is 100% stock, where I can modify the asset mix to a combination of stock, bond and money market funds. Assuming my emergency fund/liquid situation is ok, I'm not sure if this fund is adequate based on my other retirement vehicles and/or if I should look to reinvest in other vehicles or perhaps change up my asset mix?
Thanks in advance! This thread and those contributing within are fantastic!
Anyone have any good investing tips for after you max out your 401k... and make too much for an IRA?
I also looked into the backdoor IRA...but with how much I have in my rolled-over, traditional IRA, I'd be paying tons in taxes the next year. Not sure what other tax-sheltered options there are, if any.
I also looked into the backdoor IRA...but with how much I have in my rolled-over, traditional IRA, I'd be paying tons in taxes the next year. Not sure what other tax-sheltered options there are, if any.
chaosblade
Unconfirmed Member
Health savings account, maybe?
Randolph Freelander
Member
I like your allocations, generally speaking. At your age, I personally see little need for bonds, but to each his own. I wouldn't recommend adding to your savings account, nor would I say move those funds. I think your next move is going to be the Roth, and then increasing your 401K. If you max that out, then outside investing. In short, I think you're on the right path.
You don't have to convert your entire IRA. This page has information that could be helpful to you.
Can you even do that? I don't know much about pension plans but I am fairly certain that you can't roll them over into an IRA or 401k since pensions and IRAs/401ks are two very different things
Lump me in with the rest that need everyone's sage advice
What would be the best option with the following situation?
My company's retirement pension plan allows me to retire with (for all intents and purposes let's say my salary is flat until I retire) my current salary and then allocated based on the type of disbursement I choose. Along with that, I have a 457 (Vanguard LifeStrategy Growth Fund - VNGRD LIFGRO) where I contribute roughly 3-4% of my salary (I know, that's low, given current situation, I don't know if I can contribute more).
With those in place, I also had a gift trust established that has now matured and is sitting/growing in the following All Cap Growth Fund (TWGTX). It's current allocation is 100% stock, where I can modify the asset mix to a combination of stock, bond and money market funds. Assuming my emergency fund/liquid situation is ok, I'm not sure if this fund is adequate based on my other retirement vehicles and/or if I should look to reinvest in other vehicles or perhaps change up my asset mix?
Thanks in advance! This thread and those contributing within are fantastic!
That is really hard to give advice on when I am not clear on the amounts.
The best way to figure out if you have enough is to figure out your yearly expenses, figure out when you are going to retire, then guess how many years you are going to be alive after that. That should give you a very rough idea of how much money you will likely need. And since if is a very rough idea, you will likely want to have a decent cushion, or a very big cushion if you really lowball your live expectancy.
I am a bit unclear about your pension. Is your yearly disbursement from your pension your actual salary? If that is true, then the rest of your investments need to make up for your partner's income (who I am assuming does not have a pension.
Of course, if you want to travel a lot and enjoy life during retirement then your expenses are going to increase.
Unknown Soldier
Member
If you want to invest more after you've exhausted all tax-sheltered options, you pretty much have to go into tax-exposed options. This means opening up a brokerage account at the online broker of your choice.
The good news is you can buy any stock or ETF you want with an ordinary brokerage account. Most 401k's are limited to whatever your company's plan has chosen as your options.
The bad news is, well, you can buy any stock or ETF. Choice is dangerous.
Original Famous Ray
Member
yeesh...Vanguard added an optional multi-verification system and Mint doesn't work well with it. At least when you get a text from Vanguard with a code you know when Mint is trying to access your account. lol I'm gonna have to turn that code stuff off for now as I like using Mint.
I'm probably going to open up a taxable account with Vanguard as I'm fortunate enough to put enough money each week that will put me close to the 401k limit by the end of the year. I also max out my Roth IRA contribution every January (also with Vanguard). Anyone here who reaches the limits of both do anything different?
I'm probably going to open up a taxable account with Vanguard as I'm fortunate enough to put enough money each week that will put me close to the 401k limit by the end of the year. I also max out my Roth IRA contribution every January (also with Vanguard). Anyone here who reaches the limits of both do anything different?
Yeah I think I can. During my orientation it was mentioned any previous employment pension can be moved into my new account at current employment or I can pull from those plans (with no penalty) and transfer into a traditional IRA.
Randolph Freelander
Member
If you have access to an HSA, fund that. That's another way to shield money from taxes while letting it grow, and it has the added bonus of covering health needs (should any arise) tax-free and can otherwise be drawn down like an IRA once you hit retirement age.
Original Famous Ray
Member
I'm blessed to have full health care coverage from my employer so the HSA thing is a no go. Thanks for the advice though.
Hope someone could answer a quick question for me. I've paid off debt, been matching my company 401k for some time, and I'm looking to boot up a Roth IRA as well. How does asset allocation work exactly if I want to have a 80/20 stock/bond spread of Vanguard Total Index Stock and Bond? Should I hold those funds within the tax-deferred accounts like my 401k and my Roth or should I have one in a taxable account and one in a deferred?
Asset allocation should apply to your entire portfolio. If you want 80/20, I would first max out all contributions to the 401k ($18k max contributions annually) and Roth ($5500 max contributions annually) before investing in a taxable account.
An example portfolio with those two index funds at Vanguard would be:
401k
80% (VTSMX) Vanguard Total Stock Market Index Fund Investor Shares
Roth
20% (VBMFX) Vanguard Total Bond Market Index Fund Investor Shares
Also, invest in admiral shares for lower expense ratios.
Historically you should prefer putting bonds in the tax deferred account, although these days bond yields are not much better than stocks.
I love to follow this thread, and I have a question I hope someone can help out with.
I got a new job at the beginning of the year and have been contributing to this employer's 401k plan with Vanguard. With my old job I had a 401k with another company (Empowerment), and I currently have about $2000 in it, I have just left it for the past couple of months.
I've read about moving my funds over to Vanguard, but I guess my question is do I move it to my current 401k or to an IRA? I'm 22 years old, and I'm still really new to investing so please correct me if I'm getting something wrong. I appreciate any information you all can give.
I got a new job at the beginning of the year and have been contributing to this employer's 401k plan with Vanguard. With my old job I had a 401k with another company (Empowerment), and I currently have about $2000 in it, I have just left it for the past couple of months.
I've read about moving my funds over to Vanguard, but I guess my question is do I move it to my current 401k or to an IRA? I'm 22 years old, and I'm still really new to investing so please correct me if I'm getting something wrong. I appreciate any information you all can give.
I am going to give you an unpopular opinion. But in my opinion, for the sake of simplicity, move it to your new employer 401(k). Unless you already have an IRA open somewhere, I think simplicity would go a long way considering you are, "green". Keeping an eye open on one account (and its associated funds) is a lot easier than two when you are brand-spanking new to investing.
Then from there, lurk this thread! Really, the advice and conversation in this thread is outstanding. I don't normally contribute but I read it on a regular basis and a lot of people here have a deep understanding on the mechanics of investing. You can really learn a lot from the regulars in this thread.
But considering you are young in your professional life, keeping it simple for now and learning the basics would do you so much more good IMHO. Besides, there is a good chance statistically you will leave your current employer sometime in the next five years, which at that point, would give you a chance to roll-over your future 401(k) to an IRA (Unless you get a sweet federal job, then the TSP is really something special to consider).
chaosblade
Unconfirmed Member
I believe you can do either, which is right for you depends on the options you have. If you have good fund options in your 401K with lower fees than you would get with Vanguard/Fidelity/etc it would probably be better to roll it into your 401K. If you work for a large company it's possible they cover some of the fees to allow that sort of thing to happen.
Otherwise you probably just want to put it in an IRA.
Would like some advice.
Below is what is available to me for 401k allocations. I've got some research to do, but I am curious as to what are good elections I should choose:
My only debt is car and student loan. I am currently matching up to the max percentage that my company provides. I think my next goal is to continue to increase my 401k investment until I reach the max and then next IRA? What would be the best route to follow?
Below is what is available to me for 401k allocations. I've got some research to do, but I am curious as to what are good elections I should choose:
Code:
Name/Inception Date Asset Class Category 1 Year 3 Year 5 Year 10 Year/LOF* Returns As Of Bench- mark
Investments you currently own FID CAPITAL APPREC (FDCAX)
Stock Investments Large Cap -4.62% 10.70% 11.24% 6.71% 03/31/2016 Show
JPM VAL ADVNTG SEL (JVASX)
Stock Investments Large Cap -5.31% 8.75% 10.50% 7.88% 03/31/2016 Show
NB SOCIALLY RESP TR (NBSTX)
Stock Investments Large Cap -1.60% 9.75% 8.84% 6.60% 03/31/2016 Show
SPTN 500 INDEX ADV (FUSVX)
Stock Investments Large Cap 1.76% 11.78% 11.53% 6.98% 03/31/2016 Show
Investments you currently own JANUS ENTERPRISE I (JMGRX)
Stock Investments Mid-Cap -0.65% 12.51% 11.16% 9.00% 03/31/2016 Show
SPTN EXT MKT IDX ADV (FSEVX)
Stock Investments Mid-Cap -9.00% 8.05% 8.48% 6.90% 03/31/2016 Show
VICTORY S ESTB VAL I (VEVIX)
Stock Investments Mid-Cap 0.56% 12.12% 10.55% 9.12% 03/31/2016 Show
Investments you currently own FID SM CAP DISCOVERY (FSCRX)
Stock Investments Small Cap -4.60% 7.49% 10.57% 9.69% 03/31/2016 Show
ROYCE OPPORTUNITY I (RYPNX)
Stock Investments Small Cap -12.74% 3.60% 4.73% 4.67% 03/31/2016 Show
SPTN SM CAP IDX ADV (FSSVX)
Stock Investments Small Cap -9.57% 7.06% N/A 12.57% 03/31/2016 Show
VOYA SMCAP OPPS I (NSPIX)
Stock Investments Small Cap -8.84% 7.38% 8.72% 7.37% 03/31/2016 Show
AF NEW WORLD FUND R4 (RNWEX)
Stock Investments International -8.42% -0.50% 0.37% 4.57% 03/31/2016 Show
OAKMARK INTL I (OAKIX)
Stock Investments International -12.37% 2.72% 4.40% 4.82% 03/31/2016 Show
SPTN INTL INDEX ADV (FSIVX)
Stock Investments International -8.35% 2.18% 2.35% 1.89% 03/31/2016 Show
VANG PREC MTLS & MNG (VGPMX)
Stock Investments Specialty -3.59% -14.23% -18.37% -5.24% 03/31/2016 Show
IVY ASSET STRAT I (IVAEX)
Stock Investments N/A -14.17% -0.35% 1.90% 5.75% 03/31/2016 Show
JPM SMRTRET 2015 I (JSFIX)
Blended Investment* N/A -2.04% 4.20% 5.17% 5.11% 03/31/2016 Show
JPM SMRTRET 2020 I (JTTIX)
Blended Investment* N/A -2.45% 5.26% 6.07% 5.56% 03/31/2016 Show
JPM SMRTRET 2025 I (JNSIX)
Blended Investment* N/A -3.15% 5.99% 6.54% 4.99% 03/31/2016 Show
JPM SMRTRET 2030 I (JSMIX)
Blended Investment* N/A -4.25% 6.35% 6.70% 5.79% 03/31/2016 Show
JPM SMRTRET 2035 I (SRJIX)
Blended Investment* N/A -4.75% 6.70% 6.99% 5.04% 03/31/2016 Show
JPM SMRTRET 2040 I (SMTIX)
Blended Investment* N/A -5.18% 6.77% 7.05% 5.97% 03/31/2016 Show
JPM SMRTRET 2045 I (JSAIX)
Blended Investment* N/A -5.15% 6.77% 7.10% 5.24% 03/31/2016 Show
JPM SMRTRET 2050 I (JTSIX)
Blended Investment* N/A -5.10% 6.79% 7.07% 5.26% 03/31/2016 Show
JPM SMRTRET 2055 I (JFFIX)
Blended Investment* N/A -4.95% 6.82% N/A 9.37% 03/31/2016 Show
JPM SMRTRET INCM I (JSIIX)
Blended Investment* N/A -1.84% 3.45% 4.45% 4.90% 03/31/2016 Show
PIM ALL ASSET INST (PAAIX)
Blended Investment* N/A -4.08% -1.11% 2.24% 4.57% 03/31/2016 Show
Investments you currently own FID CAPITAL & INCOME (FAGIX)
Bond Investments Income -4.16% 3.85% 4.75% 7.51% 03/31/2016 Show
METWEST TOT RTN BD M (MWTRX)
Bond Investments Income 0.98% 2.46% 4.63% 6.39% 03/31/2016 Show
PIMCO TOT RETURN ADM (PTRAX)
Bond Investments Income 0.06% 1.27% 3.40% 5.74% 03/31/2016 Show
TMPL GLOBAL BOND ADV (TGBAX)
Bond Investments Income -4.16% -0.41% 2.18% 7.15% 03/31/2016 Show
VANG INFL PROT ADM (VAIPX)
Bond Investments Other 1.51% -0.77% 2.99% 4.49% 03/31/2016 Show
FMMT RETIRE GOV II (FRTXX)
7 day yield as of
03/31/2016 0.02%
Short-Term Investments N/A 0.02% 0.01% 0.01% 1.23% 03/31/2016 ShowMy only debt is car and student loan. I am currently matching up to the max percentage that my company provides. I think my next goal is to continue to increase my 401k investment until I reach the max and then next IRA? What would be the best route to follow?
I'm looking to start investing soon through Vanguard's Target Date Funds. When I set up my account, is there a way to adjust the rate of return?
I saw a projection on Vanguard's site not too long ago and it shows average growth at around 6%, where as I'm looking for something around 10-12%.
I saw a projection on Vanguard's site not too long ago and it shows average growth at around 6%, where as I'm looking for something around 10-12%.
chaosblade
Unconfirmed Member
Lot of those have really high expense ratios.
I'd say a mix of FUSVX, FSEVX, and FSSVX, the Spartan funds have low expense ratios. Something around a 80/17/3 split is pretty close to the total market I think.
FSIVX would be good if you want some international exposure.
That's assuming you are young based on your debt, if you want some bonds too I'd probably go with VAIPX.
Get lucky? If you are following the recommendations in this thread your investments are going to follow the market. I doubt any fund manages 10% average growth over a meaningful period of time. And if it did everyone would use it.
I am young. I'm a level 33.
Thanks for your feedback! Do you often change your allocations, or would you just set and forget?
chaosblade
Unconfirmed Member
I don't change mine, but mine are also set up differently. I only have a couple funds each in my IRA and 401K, rather than having multiple to follow the market. You don't have a total market fund as far as I saw though so it's not really an option for you unless you just opted for a different approach (for example, just the Spartan 500).
Someone has probably run the numbers, but I'd guess you are probably fine leaving it or rebalancing to align with the market every year or two.
PflargBlarg
Member
Ehm, this is a very odd question and kind of makes me think you might need to figure out more about how investing works. Investing of any sort (yes, even index investing) is somewhat like gambling. You're putting your money in on a bet that you think the market will go up. Index investing is certainly a less risky bet, but still a bet.
You can't just say I want 10-12% and get it. No one can just give you that. Even that average of 6% doesn't really mean much. Past performance of a fund is not really an indicator of future performance.
Please be aware of all the risks and what is actually happening before you start investing.
Randolph Freelander
Member
If I'm you, I'm going FUSVX and FSEVX for domestic holdings, and FSIVX for international. I'm leaving out FSSVX (small caps), because the small-cap holdings of FSEVX make the latter fund redundant. You have to choose how you might prefer to split your holdings in the domestic vs. international arena. As for the domestic split, I'd recommend 75/25 to match a total market. You also want to think about if you want to hold bonds, though you're young enough where I would suggest not doing so, but I'm fairly risk tolerant. If you do hold bonds, I'd go no more than 10%.
Here's some allocations you might consider as a starting point, but please take your time to research and adjust to your preference. I'm showing a domestic stock only, domestic w/bonds, domestic/international stock only, and domestic/international w/bonds. I'm using the 75/25 large/other blend for domestic stocks, 10% for bonds (when applicable), and 20% for international (when applicable).
Code:
Fund Dom Dom w/B Dom/Int Dom/Int w/B
FUSVX 75 67 60 54
FSEVX 25 23 20 18
FSIVX 0 0 20 18
Bonds 0 10 0 10Most financial advisors would suggest holding international stocks in your portfolio, some say as much as 40%, though 20-30% is more common. Personally, I'm in the mid-teens. If you want to hold higher or lower international, just scale the other values accordingly.
Randolph Freelander
Member
Yeah, not the way investing works.
Generally, target date funds are slowly going to get more conservative as you draw closer to the year referenced in the fund. Conservative means less equities, more bonds, less risk, less reward (lower expected rate of return). The upshot is that funds with years farther away are more aggressive, more equities, less bonds, more risk, more rewards. Want a higher expected rate of return? Go farther out. (But actually, go with the year that most closely approximates your expected retirement.)
Absent using a target date fund geared towards your anticipated retirement window, you can manage your portfolio yourself. We talk a lot in this thread about self-management while still using passive techniques. There's also plenty of resources online. But based on your question, I suggest sticking to the target funds for the time being, and I'm betting you're probably going to be looking at the 2050 range, give or take 5 years. As you learn more about investing, then maybe you'll want to take a more active role.
Oh yeah, why's that?
Pretty much 0 interest. Would be nice if there was some growth, even if it won't keep up with inflation.
chaosblade
Unconfirmed Member
Find a bank/credit union with better interest. You want your savings/emergency money to be liquid and readily available.
Alternatively, if you have enough credit to cover the very short term expenses you would use that money for, some recommend forgo the liquid savings and go with a conservative investment. You can use the credit for the immediate expense and sell your investment to pay it off plus any non-immediate "emergency" spending.
Alternatively, if you have enough credit to cover the very short term expenses you would use that money for, some recommend forgo the liquid savings and go with a conservative investment. You can use the credit for the immediate expense and sell your investment to pay it off plus any non-immediate "emergency" spending.
Even online banks seem to max out at 0.8%. Some give higher for the first 6 months, but that is it.
Thought about investment and credit, but will hold off for now.
Btw, anyone considered gifs (guaranteed investment funds) for their tax free savings account?
