I'm sure this is common knowledge here, and well, maybe everywhere.... But I've never participated in a 401k plan in the past... I was young and smart, knew it all, didn't need to worry about tomorrow cause today was more important Fortunately, we all grow out of that mentality.... So now I got this job with a stellar 401k plan... 100% match up to 5%, PLUS 3% company contribution, PLUS discretionary profit sharing....... I've done the math, and it's WOW!!! I read up on the basics.. I understand the diversification strategies.. Aggressive vs passive portfolios.. Pros/cons of stocks vs bonds vs cash.. And tax/pre tax stipulations But I don't have a clue, without actually engaging, as to how you manage the whole package...... I've read you can manage your 401k individually, or entrust your whole nest egg to the "professionals" So how does this work??... Can you actively select your investments? Choose individual stocks/bonds/index funds?.... Or do you just go on the company website, adjust your little pie chart and let the big investment firm (who always has your best interest in mind) handle the "light work" for you???
Just a quick background to my skepticism of mutual funds (which I think is what a 401k is meant to be??) My wife, before we met, was talked into investing her whole tax return one year by her employer... They recommended Janus... Some of y'all have been around a while, you probably know what happened with Janus back in the early 2000's Anyway, she lost it ALL.. Every dime... As did many many others!.... Yet, somehow, Janus did not report an earnings loss that year........ Convenient, how when they make money, only part of it is yours.. But when they lose money, they make sure all of it was yours ...... end rant
I've only had a 401K at my current job, as I was a contract employee before that. I can tell you right now, my 401K is very good from the company. I am able to invest it in whatever stocks I choose. I had to fill out some form before getting access to be able to invest in individual stocks though, so you might have to do some digging. Otherwise it's like you said, you can select the different fund indexes or other "pie slices" and just leave it in there.
So after you signed the form, how did you go about allocating the funds?... Was it just through the company or firm website?... Or did you link it up with your personal brokerage account? Like, I have a TD Ameritrade account that I don't even use (well I've used it once now) because I found Robinhood....... I would never put my 401k on Robinhood, so don't worry bout that..... I'm just wondering if I could link it up with TD? Or if I have to go through the firm anytime I make changes Btw, the firm is Fidelity.. Don't know much about them, everyone I know has Vangard, and they like it
You will go through whatever firm your company is in partnership with. My work goes through Merrill Lynch, sounds like you'll be using fidelity.
10/4.. Thanks, I think that clears it up... Once I get signed up and check out the Fidelity site, maybe things will start clicking
My company uses John Hancock, they match 100% up to 4% which is what I contribute. I have mine in what is basically a money market account. My money is doubled off the top. If/when we see the great correction of 2017 I may spread it out some, but with the all time highs I'm kinda leery
I finally got signed up and checked it out There are several mixed mutual funds to chose from... Along with small and mid cap funds.. And a large cap 500 index fund... Then a hand full of bond related funds I have nothing to lose yet, so I made my selections and added them to my regular watch lists So, if/when I decide to make changes, is that when the fees kick in?
You probably won't have any "fees" charged to your account since the mutual funds offered are probably "no-load" funds where the management fees are rolled into the Net Asset Value; rolled into the reported gain/loss. I had a Fidelity-serviced 401k once with a previous employer that I since rolled into my TDA brokerage account.. However, I could have left it with Fidelity and traded it using their brokerage service. However, while I was still employed by that company my only choices were the fund offerings set up by the company I worked for. Just a quick background to my skepticism of mutual funds (which I think is what a 401k is meant to be??) Actually "401k" is the name of the subsection of the Internal Revenue Code where you would find the code related to this type of deferred-tax retirement account. The code spells out the rules and restrictions on what type of investments can be inside a 401k account. But you are right, in that the vast majority of these accounts are set up with various mutual funds.
I have mainly different index funds including, your small caps, growth, mid cap, large cap (multiple kinds of all of these), then I hav a few bond funds an inflation fund, lastly i have 2 international funds which is where my money has been in 2017. Oh and a stable "Cash fund"
