Bogleheads.org

StevenNJ1

So, going back to the initial question .... what funds do I pick and how do I distribute my investments? thank you. happy new year! My current incomple thoughts are along these lines -- 401k ($15k; adds ~ $4k + ~ $4k employer match = ~ $8k/yr) Vangaurd Total Stock Market Index Fund, ER 1.04% An IRA...

StevenNJ1

My apologies for not responding earlier. Regarding questions ... I thought I answered them all but maybe I missed a few. I'll go over this thread again. It's funny ... these new funds became available to us just a few days ago and they threw everything into American Target date fund .... so I had to...

StevenNJ1

So, going back to the initial question .... what funds do I pick and how do I distribute my investments?

thank you.
happy new year!

StevenNJ1

In addition to contributing 4% to get the full match in the 401k are you able to contribute $5.5k/yr to an IRA? Would you be able to contribute more than that to investing? Have you given any thought to the asset allocation (stock/bond mix) that you want to have? To be honest ... I am concerned tha...

StevenNJ1

The over 100K is sitting in the savings account for when we're ready to buy a house. It's also there for me to have a better night sleep. :-) I know someone is saying that it's a nightmare to have all that money doing nothing for you .. but I just don't see a lot of good choices right now if I need...

StevenNJ1

That's excellent news, congratulations. Maybe next time the provider contract comes up for renewal the CFO and HR will consider getting bids from a low cost provider such as Employee Fiduciary, Intuit or Vanguard. About me: 33 Years old, No dept, wife and child (1yr old), renting apartment, been at...

StevenNJ1

I was at the same point last year ... do I got for Roth IRA or not for both 2014 and 2015 .... I chickened out and did not open up. Now ... if I go for Vanguard funds in my 401k ... what funds would you get in let's say Vanguard Roth IRA account .. if I finally open it up :-) ? thank you. To answer...

StevenNJ1

I was at the same point last year ... do I got for Roth IRA or not for both 2014 and 2015 .... I chickened out and did not open up.

Now ... if I go for Vanguard funds in my 401k ... what funds would you get in let's say Vanguard Roth IRA account .. if I finally open it up

?

thank you.

StevenNJ1

Glad you are making progress! IIWY I'd use the Vanguard stock funds: Vanguard Small Cap Index Vanguard Total International Stock Index Vanguard Total Stock Market Index I like a tilt, so I'd split the money evenly in these three funds, and put the taxable money in a CD ladder, or maybe munis, just ...

StevenNJ1

So ... thanks to all of you guys who contributed and answered my questions on this forum (http://www.bogleheads.org/forum/viewtopic.php?f=2&t=138739) and gave great advice .... after 2 hour meeting with our company's financial adviser (snake), and after involving 2 more employees who are great a...

StevenNJ1

thanks guys. Always a great place to get suggestions and a few laughs.
thanks

StevenNJ1

I would send her to Vanguard and deposit her into one of their low-ER day care accounts. She will develop at the average rate of all other kids (with very little cost) and when you get her back at age 18 she will have compounded into a terrific young woman, free from a lot of the excess emotional c...

StevenNJ1

all comments much appreciated.
thanks

I was just thinking that if I put away a small yearly amount and let it grow, maybe 18 years later I'll thank myself.

StevenNJ1

I'd set up a 529 with an automatic monthly contribution for college savings - especially if you're already maxing out your tax advantaged retirement accounts. You might even be eligible for a state tax deduction for your contributions. Very interesting. Already reading up on it. Does it have a limi...

StevenNJ1

Hi all,

So, I have a 1 year old daughter and some people are suggesting I open up some sort of a savings fund for her. Gerber or anything like that for education etc.

Any input? Suggestions?

Much appreciated.
thank you.

StevenNJ1

I agree with the comment to max your pretax work 401k every year. Use some of the 100k cash if needed for living expenses if putting more current income into your 401k leaves you short on monthly expenses. You are missing out on the entire 401k contribution growing over the years, to have a little ...

StevenNJ1

What about sites like this one. www.prosper.com

so giving money to some well rated borrowers? Much higher % of return. And if one diversifies to never have more than $1,000 per investment, this could be pretty safe. No ?

StevenNJ1

I have to be somewhat conservative as those money and whatever I accumulate in the next 3-5 years would be a home downpayment.

StevenNJ1

Hi all, So ... not going to be buying a house at least in the next 3-5 years. Already contributing 11K/year into company 401k (half of that amount is company match), no IRA though. I have 100K that are just sitting in the bank and losing value every day. What's the smartest thing to do with that mon...

StevenNJ1

just a follow up ... it was a 2 hour meeting .... CFO, Adviser, HR Director and I. All defensive points that Adviser came up with .. I shut them down. (you're a small company, our managed funds do better than index funds, your 1.5% fee is average, etc). One point that stuck of his is him saying how ...

StevenNJ1

Hi all, So our CFO, HR manager, 401k Adviser and I had a meeting about our American Funds high fees (1.5-1.8%). I showed info about how managed funds were not that great and how we are being screw*d and went aggressive on the guy. Every argument he gave back, I defended. Showed charts how their fund...

StevenNJ1

Steven, Congrats on the progress you have made so far. I have 20+ years of CFO experience at companies about the size of yours. My advice would be: 1) Cut your management (CFO and CEO) some slack as they probably have dozens of more important issues (in their minds) that they are dealing with. They...

StevenNJ1

If the employer match is 4% and you have say 100K salary, that's worth 4K/yr. If you're paying 1.5% or more in fees, that applies to your entire account. If your 401k balance is 300K, 1.5% is $4,500 which is more than the match. I wonder what kind of 401k balance the CFO has. CFO is new and so is t...

StevenNJ1

what I am curious to know is ... is the CFOs argument valid? Are we paying high fees (an no way around this) because our total asset as a company is low? Because not many people contribute, etc??? is this a dead end??? You're CFO is wrong. He just isn't familiar with lower cost alternatives. Here i...

StevenNJ1

Hi - just was reading this due to interest. FYI - I did not know much about investing (and still am an infant compared to the knowledgeable people on this board) but started lurking here about 1.5 years ago at the urging of my business partner. He is right - these people are phenomenal. Anyway, we ...

StevenNJ1

Thanks to all that gave such great feedback. I now have about 15 slides to share in our upcoming meeting with CFO, HR and 401k Advisor. In that presentation you may see me quoting many of you. You can view it here https://www.dropbox.com/s/kh60bt98muy2wuu/111%20ret%20plan%20%28short%29.pptx Would lo...

StevenNJ1

I avoid our 401(k) plan for the simple reason of the very high fees. I max the Roth IRAs and then the taxable account! I understand your frustration. I am curious, how high is that fee that you decided to completely opt out. ------------------ to everyone else that responded ... i guess I am so use...

StevenNJ1

So then I guess the most fair way of calculating 401k, IRA is to use something like 5-6% return instead of 7-10%. Just to be modest as well as fair to inflation,. by the way ... from the price increases I see in the past few years, I hardly believe that it's at just 2% like someone suggested above. ...

StevenNJ1

interesting info. It's just that adding that 3% (inflation) into the mix, . . . , made all the numbers drop significantly. Inflation is the great enemy of all savers, and of creditors in general. The results can be shocking, but it is a good lesson. The real question is what is the alternative? So ...

StevenNJ1

The 1.5% expenses is crazy but such is life in 401K-land (my ex-employer's plan is 7x less). Focusing on the rest of the equation, 3% real return (7% nominal - 4% inflation) is very conservative but not unreasonable. While the average real return of the stock market has been 7% many folks are predi...

StevenNJ1

"so what I'm saying makes sense, right?" You're right that inflation will reduce real return on your savings - the "magic of compounding" is not quite as magic as it's sometimes made out to be. But it's not as bad as you think. The disconnect is that your calculations assume tha...

StevenNJ1

The 1.5% expenses is crazy but such is life in 401K-land (my ex-employer's plan is 7x less). Focusing on the rest of the equation, 3% real return (7% nominal - 4% inflation) is very conservative but not unreasonable. While the average real return of the stock market has been 7% many folks are predi...

StevenNJ1

The 1.5% expenses is crazy but such is life in 401K-land (my ex-employer's plan is 7x less). Focusing on the rest of the equation, 3% real return (7% nominal - 4% inflation) is very conservative but not unreasonable. While the average real return of the stock market has been 7% many folks are predi...

StevenNJ1

Please don't consider this post as just Rhetoric. For me, this is a huge question that I try to answer before I start investing into my retirement. I am just curious ... if our 401k plan has 1.5% expense fees (i know, high and we're about to battle to get them lower) ... when you use a calculator to...

StevenNJ1

I used the Excel FV function with an interest rate of (1.07/1.04-1-.002), 33 periods, pmt of $4000 made at beginning of period and got $213,745. So that is the result in real dollars when there is constant inflation of 4% and a constant nominal return of 7%. You can see why people do worry about in...

StevenNJ1

P.S. If I decide to hold off on the taxable account .... maybe do a small portion of international fund in my IRA for now??? or skip International all together until I do a taxable account? The Initial minimum investment will be $3k per fund, so you cannot initially split up your $5.5k into two fun...

StevenNJ1

yep ... ROTH IRA is what I am looking at and I did some math and numbers I see are not making me happy ......... so I used a calculator here (this one doesn't have option to punch in the 0.20% expense on funds) http://www.bankrate.com/calculators/retirement/roth-ira-plan-calculator.aspx so I used th...

StevenNJ1

ok, then I guess what I thought actually makes sense. so when someone told me how expensive it will get after I retire ... the answer is ... not really as I can always roll it into IRA. I understand all the money lost during work years, but the graph that scares you of what happens after you retire ...

StevenNJ1

niceguy7376 wrote:OP, just curious, what charts are you talking about? When people talk about 401K fees, it is during the accumulation phase where we are contributing to the fund.

this chart right here
http://www.bogleheads.org/wiki/Expense_ratios

StevenNJ1

So then why are there so many charts raving about how awful fund expense fees are in 401k especially during retirement age? People can just roll them over to IRA and not pay those crazy fees right before they are ready to retire.

StevenNJ1

I am still not 100% sure I understand how this 1.5% expense fee plays into affect as one retires and starts withdrawing 4% a year out of 401k. If I let's say I stay 20 years with current 401k plan and pay those 1.5% fees yearly, I understand that my growth is cut by that 1.5%. BUT ... year 21 I chan...

StevenNJ1

This is still what I think is a good way to start -- 401k (adds $16.5k/yr, or if meeting with 401k advisor does not get some low expense index funds will scale back and do only $11,200/yr, = ~ 50% or more of annual new money ) 25%, American Funds Growth Fund of America (RGABX), ER 1.41%, <= 1/2 of ...

StevenNJ1

I am keeping Bonds in 401K like you suggested. Opening up IRA today ....

does it make sense to do

VTSMX = 80% (us stocks)
VGTSX = 20% (International)

in my Roth IRA? or just stick with VTSMX to faster get to their Admiral lower expense fund?

thanks

StevenNJ1

...4% match but she doesn't want to. Low salary. We also don't have index funds. Avg fund cost is 1.5% So if she can't do the in-service rollover to IRA, what's the answer? put money into something like RGABX = 1.41% exp ... cheapest fund we have Since you wanted some help with understanding the in...

StevenNJ1

3. Plan before you start buying. Its little trouble to later switch funds inside the 401k or inside the IRA. But there often is tax pain if you buy in the taxable account and later decide you need to switch something there. hmm, interesting point. So, if it's not too much trouble for you ... what f...

StevenNJ1

Guys ... and ladies ... I appreciate the feedback. I didn't mean to start a heated discussion here. I fully understand the importance of contributing to 401k especially when there is a match. No need to tell me this. I know, I agree, 100%. with her situation however ... she just can't. No matter how...

StevenNJ1

Gotta contribute up to the match! That's free money, which will help offset the high fees<snip> she can't. I tried to explain but financially unable. What you are saying is she doesn't make much of a salary so she is voluntarily accepting a 4% reduction in her salary. If you think that doesn't make...

StevenNJ1

So ... my plan tomorrow is ........... 1) Open up Vanguard Trad IRA, do the $5,500 into (VTSMX) 24 hours later convert it into ROTH IRA 2) Modify my 401K ($16,500/yr with employer match) to be 75%, American Funds Growth Fund of America = RGABX (1.41%) 25%, American Funds Bond Fund of America = RBFB...

StevenNJ1

Gotta contribute up to the match! That's free money, which will help offset the high fees. Perhaps convince her that leaving it alone will 'cost' her money, but contributing the minimum to get the match will earn 'free' money... As it is, fees on $7k, left alone, isn't the issue. she can't. I tried...

StevenNJ1

She could have pulled it all out, paid the penalty, and spent it on shoes... now that would be dumb. :D It may not have been the best choice, but all is not lost either. You would have to check into the in-service transfers and if they're allowed... probably not. If not, pick the lowest ER fund pro...

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