Opinions on Fidelity Freedom Index 2020 fund?

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avp1234
Posts: 23
Joined: Mon Jun 24, 2013 12:27 pm

Opinions on Fidelity Freedom Index 2020 fund?

Post by avp1234 » Mon May 11, 2015 10:41 pm

I'm 46 and reconsidering my risk tolerance. Right now, I'm about 85/15. I like the idea of all in one funds and found this. Low ER and it looks to be around 60/40. I don't have a large portfolio, but I am now maxing IRA's and my 457. I will also have a pension. I was trying to catch up with the more aggressive AA, but I'm not comfortable with it, tbh. Do you think this is a good choice?

JimInIllinois
Posts: 347
Joined: Wed Dec 22, 2010 9:55 am

Re: Opinions on Fidelity Freedom Index 2020 fund?

Post by JimInIllinois » Mon May 11, 2015 10:56 pm

This fund has 7% in a money market fund earning 0.1% interest, which is a waste given your time horizon. Since the fund assumes you are retiring soon it will be even more conservative in the future. There are funds that maintain a constant 60/40 ratio if that is what you want.

pingo
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Joined: Sat Sep 19, 2009 8:24 pm

Re: Opinions on Fidelity Freedom Index 2020 fund?

Post by pingo » Mon May 11, 2015 11:36 pm

Fido Freedom Index 2020 (FPIFX) is a good portfolio that'll get the job done. I notice there are discrepancies between what Fidelity.com and Morningstar.com say is the asset allocation path that 2020 will take over time. (Fidelity shows a slightly riskier AA and glide path.) Personally, I believe it in your best interest to keep your asset allocation hovering in the vicinity of 60/40 for as long as possible.

Long story short, it leads me to ask if you might be comfortable investing in the Fidelity Freedom Index 2025 Fund (FQIFX). Fido says that 2025 is 70/30 now (M* says it's ~67/33), but in only 5 years it'll be same as 2020 is now.

Keep in mind that JimInIllinois's point about Fido is a good one. In a way, it means that 2025 is more desirable and more viable since that cash allotment makes the fund more stable than a stock-bond portfolio with no cash. The amount of cash held by the portfolio continues to increase over time until it is more than 1/3 of the portfolio's fixed income...yet another reason to not be moved to a lower stock allocation too soon when using a Fidelity Freedom Fund.
Last edited by pingo on Tue May 12, 2015 11:36 am, edited 4 times in total.

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BL
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Joined: Sun Mar 01, 2009 2:28 pm

Re: Opinions on Fidelity Freedom Index 2020 fund?

Post by BL » Mon May 11, 2015 11:41 pm

If you only want 15% bonds, the Fidelity® Four-in-One Index FFNOX may suit you. Otherwise the other target date Index funds according to the amount of bonds you prefer would work fine. No one knows what amount will let you sleep at night. What is your age? The old "age in bonds" might be a starting point.
Last edited by BL on Mon May 11, 2015 11:43 pm, edited 1 time in total.

DVMResident
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Joined: Mon Aug 01, 2011 8:15 pm

Re: Opinions on Fidelity Freedom Index 2020 fund?

Post by DVMResident » Mon May 11, 2015 11:42 pm

avp1234 wrote:I was trying to catch up with the more aggressive AA, but I'm not comfortable with it
Listen to your gut. Don't risk what you can't afford to lose.

JimInIllinois
Posts: 347
Joined: Wed Dec 22, 2010 9:55 am

Re: Opinions on Fidelity Freedom Index 2020 fund?

Post by JimInIllinois » Tue May 12, 2015 9:21 am

Consider the Vanguard Life Strategy funds. $3000 minimum and fixed stock/bond ratios:
https://investor.vanguard.com/mutual-fu ... estrategy/#/

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