Appropriate Fidelity Funds in my Situation

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Topic Author
Old Guy
Posts: 320
Joined: Mon Mar 19, 2012 7:20 am

Appropriate Fidelity Funds in my Situation

Post by Old Guy » Thu Jan 24, 2019 7:53 am

We’ve decided to move our TSP into Fidelity because of inheritance issues. I’m 76 and my wife is in her 70s. We have one child. I’m thinking of splitting the money between their 2020 or 2025 lifecycle fund and the Fidelity Balanced Fund. What are your thoughts?

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travelogue
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Re: Appropriate Fidelity Funds in my Situation

Post by travelogue » Thu Jan 24, 2019 8:04 am

Well, you're going to move from an ER of approximately 0.03% to 0.66%, but I'm not aware of the inheritance issues you're planning to mitigate. What about building a portfolio of individual funds or ETFs with lower ERs?

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David Jay
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Location: Michigan

Re: Appropriate Fidelity Funds in my Situation

Post by David Jay » Thu Jan 24, 2019 8:27 am

Be careful. Fidelity has Freedom 2025 (high cost) and Freedom Index 2025 (low cost) and make it much easier to find the high cost funds.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius


retiredjg
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Re: Appropriate Fidelity Funds in my Situation

Post by retiredjg » Thu Jan 24, 2019 9:18 am

Old Guy wrote:
Thu Jan 24, 2019 7:53 am
We’ve decided to move our TSP into Fidelity because of inheritance issues. I’m 76 and my wife is in her 70s. We have one child.
I understand why you might want to move out of the TSP and I think that is fine, especially if it makes you feel more comfortable about how an inheritance is handled.

I’m thinking of splitting the money between their 2020 or 2025 lifecycle fund and the Fidelity Balanced Fund. What are your thoughts?
Why use 3 funds? Why use these 3 funds? Not that it is wrong, but the logic behind this choice is not obvious to me.

As for cost, the Fidelity Freedom INDEX funds cost only .14% which may be higher than the TSP, but certainly still very low cost.

The Balanced Fund cost is higher -.6% - and it is not an index fund. It is actively managed. Did you pick that on purpose?

Topic Author
Old Guy
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Re: Appropriate Fidelity Funds in my Situation

Post by Old Guy » Thu Jan 24, 2019 9:26 am

I did pick that on purpose. I’m looking for a stable value type fund and this seemed to match. But what do I know?

retiredjg
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Re: Appropriate Fidelity Funds in my Situation

Post by retiredjg » Thu Jan 24, 2019 9:40 am

Depends on what you mean by "stable value". A stable value fund is usually found only in a 401k or similar fund and does not usually have a significant allocation to stocks . This fund is 65% stocks.

https://fundresearch.fidelity.com/mutua ... /316345206

Were you actually looking at something else with a similar name maybe? Or did you just mean a fund that is stable or maintains a certain asset allocation?

Topic Author
Old Guy
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Re: Appropriate Fidelity Funds in my Situation

Post by Old Guy » Thu Jan 24, 2019 9:41 am

What I’m looking for is a way of preserving capital considering RMDs.

retiredjg
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Re: Appropriate Fidelity Funds in my Situation

Post by retiredjg » Thu Jan 24, 2019 10:30 am

The target funds you picked are 58% stock and 50% stock. Is that what you had in mind?

Do you have an overall stock to bond ratio in mind?

Are there other accounts to consider?

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