Just got a job! Help with 401K choices

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darthvader747
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Joined: Thu Feb 19, 2009 9:11 pm

Just got a job! Help with 401K choices

Post by darthvader747 » Thu Feb 19, 2009 9:47 pm

Hi All,

I recently got a job with a major pharma company. I want help chosing my 401K funds. I am a total newbie to investing!

My company contributes 3% of my salary and matches dollar to dollar up to 2%. So I have elected to deduct 5% of my salary from my paychecks. The idea being that I get a total of 10% annual saving's for my 401K (3%-comp;2%-Me;2%-comp match;3%-me).

I was wondering if I should invest a lot in the S&P 500 tracker index fund (VIFSX) since the index is so low right now. However, I think it will go down further. What do you guys think? I was also thinking of investing in the windsor fund (VWNDX). Right now my money is in the vanguard treasury money market fund. Should I just keep the money parked there until the economy shows some sign's of recovery?

Also should I open a roth IRA or a regular IRA? Should I open it with Vanguard who runs my 401K. Is it easier to manage that way? I was leaning towards roth since there are no penalties for withdrawals!

Salary: $65,000-$75,000

Emergency funds = 12 months worth of expenses

Debt: Car Loan $18,000@3.9%

Tax Filing Status: Single

Tax Rate: Federal-25% (I think)

Age: 28

Desired Asset allocation: Not sure, please recommend. I am willing to take moderate risk.


Funds in my company 401K which is provided by Vanguard:

Balanced Funds

Vanguard LifeStrategy Consrv Grwth VSCGX
Vanguard LifeStrategy Growth Fund VASGX
Vanguard LifeStrategy Income Fund VASIX
Vanguard LifeStrategy Mod Growth VSMGX

Short Term Reserves
Vanguard Treasury Money Mkt Fund VMPXX

Bond Funds

Vanguard Inter-Term Invest-Gr Inv VFICX
Vanguard Short-Term Invest-Gr Inv VFSTX

Balanced Funds (Stocks and Bonds)
Vanguard Wellington Fund Inv VWELX

Domestic Stock Funds
Vanguard Explorer Fund Investor VEXPX
Vanguard U.S. Growth Fund Investor VWUSX
Vanguard Windsor Fund Investor VWNDX
Vanguard 500 Index Fund Signal VIFSX

Please help me secure my future!

bnw2001
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Joined: Fri Jan 16, 2009 11:18 pm

Re: Just got a job! Help with 401K choices

Post by bnw2001 » Fri Feb 20, 2009 12:08 am

Happy to give some basic advice, I've gotten so much thoughtful advice from this board in the past. There are so many people more knowledgeable than me here, though...

Anyways my basic advice for a retirement account is to mostly hold funds that you would NOT want to hold in a taxable account (ie highly tax-inefficient funds). But it doesn't look like you have too many in that category. Maybe the bonds.

I would definitely hold VIFSX, you are very lucky to have that option. The ER is 0.07!! And I thought I was lucky to have VFINX in my 401k.

In general, I think the advice you'll get here is to keep it mostly simple and choose one of the LifeStrategy funds. Maybe you can diversify a little by holding a couple of the others too.

Nebulous advice, I know. Hope it helps.

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Ilovevolleyball
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Post by Ilovevolleyball » Fri Feb 20, 2009 12:52 am

Hello,

Yes do start a Roth. Before 04/15/2009 and you can invest for tax year of 2008 thus you could invest 10k this year in your Roth. (If you are not sure what to invest in, it is more important that you do it than in what so you could put 5k in a moneymarket fund or total bond index or... and if you do not have access to that kind of money 5k so soon then I would still recommend you invest 1k in STAR fund for 2008 Roth.)

Yes do invest at Vanguard. Not that you have to or that it is so much easier. Low cost- that is why.

Your 401k has no international choices?

Look into recommended books on investing... You have to live with the consequences... and would be best to learn anyhow...

You should know there is a debate -heated, about active funds those that have managers who try to beat the index. And passive those that mimic the indexes. Pulling numbers out of a hat to illustrate what I think: in general passive beats active 1 year 52%, passive beats active 5 year 60%, and 10 year passive beats active like 80%.

These numbers are not correct, just illustrative, and there are other factors...

All this aside, one of your choices is probably the best active fund there is: Wellington. And, if you were my family member I would say invest there until you learn more. You can always switch later what ever you choose to invest in.

Mike

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tfb
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Post by tfb » Fri Feb 20, 2009 1:51 am

It's nice to see companies are still hiring and paying good salaries.
Harry Sit, taking a break from the forums.

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Ducks
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Re: Just got a job! Help with 401K choices

Post by Ducks » Fri Feb 20, 2009 9:22 am

darthvader747 wrote:My company contributes 3% of my salary and matches dollar to dollar up to 2%. So I have elected to deduct 5% of my salary from my paychecks. The idea being that I get a total of 10% annual saving's for my 401K (3%-comp;2%-Me;2%-comp match;3%-me).

My advice is to follow this rule of thumb:
1) 401k to the match.
2) Roth IRA to the Max
3) 401k to the max
4) Taxable Investing

It is good to have that 10%/year goal, but if you have at least $3k that you are willing to stash for the long term (5k max for 2008), open a Roth IRA at Vanguard.

If it were me, I would choose "Vanguard LifeStrategy Mod Growth VSMGX" in both accounts just to keep things simple in the short term, and revisit the decision in a few years. At that point, you can slice-n-dlice to beat costs down or to simply decide to enjoy simplicity.
Getting our Ducks in a row since 2008.

darthvader747
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Re: Just got a job! Help with 401K choices

Post by darthvader747 » Fri Feb 20, 2009 11:28 am

Ducks wrote:
darthvader747 wrote:My company contributes 3% of my salary and matches dollar to dollar up to 2%. So I have elected to deduct 5% of my salary from my paychecks. The idea being that I get a total of 10% annual saving's for my 401K (3%-comp;2%-Me;2%-comp match;3%-me).

My advice is to follow this rule of thumb:
1) 401k to the match.
2) Roth IRA to the Max
3) 401k to the max
4) Taxable Investing

It is good to have that 10%/year goal, but if you have at least $3k that you are willing to stash for the long term (5k max for 2008), open a Roth IRA at Vanguard.

If it were me, I would choose "Vanguard LifeStrategy Mod Growth VSMGX" in both accounts just to keep things simple in the short term, and revisit the decision in a few years. At that point, you can slice-n-dlice to beat costs down or to simply decide to enjoy simplicity.


I like your idea of investing in the VSMGX fund. It seems less risky too since its pretty diversified. I am ready to take some risk and would like moderate growth, so this seems like a good idea. Should I also hold VIFSX since it has a very low expense ratio? And the S&P 500 right now is really low? How about a 50-50 split between VSMGX and VIFSX?

DSInvestor
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Post by DSInvestor » Fri Feb 20, 2009 11:49 am

Sorry to confuse things, but I just read the description of Vanguard Lifestrategy Moderate Growth.
Product summary

Fund facts

* Fund of funds appropriate for medium- to long-term goals where you’re seeking growth plus some income.
* Primarily holds index funds of U.S. and international stocks, plus Treasury and corporate bonds.
* Maintains an asset mix of between 45% stocks/55% bonds and 70% stocks/30% bonds.
* Includes Vanguard Asset Allocation Fund, which seeks to maximize long-term returns by strategically adjusting its asset mix.

bold = my emphasis.

This fund seems to have the flexibility to alter it's asset allocation from 45/55 to 70/30. Since it has no target retirement date, AA changes are at the whim of the manager. It seems to me that you may not know what you're invested in with this fund. Current allocation is 67/33. The main thing that determines the risk you're taking in the portfolio is the allocation to stocks. If you cannot be sure what the stock allocations are in the Lifestrategy funds at any given time, you can't be sure of the risks you're taking.

I'd suggest that you evaluate your ability, willingness and need to take risk and decide on an asset allocation that you think you can live with.
Look at Laura's post on Investment Planning:
viewtopic.php?t=6211

Once you feel you have a desired AA, pick some funds that will give you that AA. If you feel that 60% stocks /40% bonds is right for you, Wellington Fund which maintains 60/40 may be a good choice in the 401k and offer simplicity and automatic rebalancing. If 80/20 is what you'd like, perhaps you can consider a combination of 500 Index Signal (100% stocks) and Inter-Term Invest-Gr funds (100% bonds). If you use a combination of 2 or three funds, you'd have to rebalance manually perhaps once a year. It's not as simple as LifeStrategy, but at least you'll know exactly how much risk you're taking.

Swivelguy
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Post by Swivelguy » Fri Feb 20, 2009 12:07 pm

tfb wrote:It's nice to see companies are still hiring and paying good salaries.


This is neither here nor there, and I don't mean any offense to the OP, but of course big pharma is still hiring. With the way the FDA is in their pockets, they're practically already nationalized, with a license to print money.

The grain industry keeps us unhealthy, so that the pharma industry can keep us medicated, and everyone gets rich - except the people. Maybe I'm just paranoid.

Why the health of the People determines the fate of the economy

In other countries, workers are willing to work for less money, executives are aggressive and well educated, and companies aren't burdened with out-of-control health care costs that have been enforced by the Big Pharma / FDA conspiracy that seeks to keep Americans diseased and medicated.

The upshot is that, in many ways, America can no longer compete on the world stage, and it is now suffering the predictable effects of an economy built on mass consumer poisoning and the continuation of disease.

http://www.naturalnews.com/Big_Pharma.html

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modal
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Post by modal » Fri Feb 20, 2009 12:26 pm

Here's what I'd do.


Vanguard 500 40%
Vanguard Explorer 30%
Intermediate Invest GR Bond 30%


Any more funds?

I also suggest saving more if you can and it doesn't hurt much.
-Max your 2008 Roth
-Max your 2009 Roth
-Max your 401k if you can.... :D
-Make sure you have some liquidity... aka emergency funds

*Remember $16500 max for your 401k and this is from your contributions not your employers.

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Ducks
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Post by Ducks » Fri Feb 20, 2009 12:52 pm

DarthVader - I think at this point, your savings rate matters more than your asset allocation. If, as DSInvestor pointed out, the 45/55 - 70/30 allocation is okay with you, then I'd do that. If it isn't, then I'd figure out an allocation I was happy with and choose funds that meet that allocation. Vanguard has a pretty good quiz for figuring out your risk tolerance. I like TFB's Cascading asset allocation method for dividing stocks/bonds further. Once you figure out the AA you're happy with, then you can pick funds that meet those goals.

Also, it's unclear if you had earned income in 2008 (though I suppose that is how you got your 12 month emergency fund). If not, you won't be able to open that Roth with 2008 contributions, and you'll need to start with 09 contributions.
Getting our Ducks in a row since 2008.

darthvader747
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Post by darthvader747 » Fri Feb 20, 2009 1:27 pm

modal wrote:Here's what I'd do.


Vanguard 500 40%
Vanguard Explorer 30%
Intermediate Invest GR Bond 30%


Any more funds?

I also suggest saving more if you can and it doesn't hurt much.
-Max your 2008 Roth
-Max your 2009 Roth
-Max your 401k if you can.... :D
-Make sure you have some liquidity... aka emergency funds

*Remember $16500 max for your 401k and this is from your contributions not your employers.


I am leaning towards a 70/30 ratio (stocks/bonds). Going by the 'your age in bond rule'. This seems to fit modal's asset allocation and fund choice. Any thoughts on that would be really appreciated.

One question I forgot to ask relates to my car loan ($18,000 @ 3.9% for 60 months). Should I try paying my car loan off first or put my money in a roth IRA? With my current job, I think I can pay it off in 36 months.

How easy is it to pull money out of a roth IRA? Is the process complicated or will I have the money available to me in a week or two, should I need it. I ask because to get $5,000 out for 2008 IRA, I will need to dig into my savings. I don't anticipate needing that money but want to know just in case I need it.

DSInvestor
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Joined: Sat Oct 04, 2008 11:42 am

Post by DSInvestor » Fri Feb 20, 2009 1:36 pm

Ducks wrote:DarthVader - I think at this point, your savings rate matters more than your asset allocation. If, as DSInvestor pointed out, the 45/55 - 70/30 allocation is okay with you, then I'd do that. If it isn't, then I'd figure out an allocation I was happy with and choose funds that meet that allocation.


I fully agree with Ducks on this. Savings rate has a much larger impact on portfolio growth than asset allocation in the early years of investing when assets are small. The dynamic changes when your assets are larger say 100-200K and higher, where internal growth may provide more growth than contributions. With larger assets come potential for larger $ losses. A 70/30 portfolio can fall 35% which for a 200K portfolio is $70,000. Can you tolerate such a loss?

In general we can't control returns but we can control how much we save and the risks that we take. The higher the savings rate and the longer the time horizon, the lower the rate of return we need to achieve our goal. The lower the needed rate of return the less risk we need to take.

retiredjg
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Re: Just got a job! Help with 401K choices

Post by retiredjg » Fri Feb 20, 2009 2:10 pm

Hi Darth, welcome to the forum!

Since you are new to investing, you need to make a plan. Right now, you are just trying to "pick good funds", but that is backwards. Make a plan. Then pick the funds. Below is a link to an investment planning page. It also contains a list of several books. You need to read at least 1 to start, probably 2 or 3 over the next year. Unlike previous generations, you are going to have to make sure you have your own money for retirement. So education is critical.

http://www.bogleheads.org/forum/viewtopic.php?t=6211


You are so lucky to have Vanguard as your 401(k) provider! However, you did not list the Target Retirement Funds as an option. Is that because they are not available or were you just not interested? If they are available, your best bet would probably be to hold a TR fund in both your 401(k) and your Roth. That way, you get simplicity accompanied by the greatest amount of diversification possible for a beginning portfolio. By that I mean you would get total US stock market, total US bond market, and international stocks all in one fund.

I agree with others than Roth is better for most people than a traditional IRA. However, you must have had income in 2008 to make a 2008 Roth contribution and the contribution cannot exceed your income. If you did have income in 2008, that would be a very good choice.

The 500 index tracker is probably going to be your best choice, but not for the reasons you think. The 500 index is a big part of the total US market. If you had "total stock market" available, that would be a little better. If not, 500 index is just fine and should form part of the core of your portfolio. The fact that "the index is so low right now" is not why you buy it. It only means that you are able to buy your core funds cheaper than in the future. Like buying lots of toilet paper on sale because you know you will want it the rest of your life.

In my opinion, a reasonable moderate AA for you would be 70 - 75% stock. 80% stock is probably fine, but you get less "bang for your buck" (return for risk) if you go higher than 80%.

For today, I think your best bet would be holding 75% 500 index and 25% of the intermediate bonds. Modal's recommendation is fine too, but it involves the use of small cap growth funds. I think it would be better for you to understand what a total market approach actually is before going in that direction. For now, 500 index is just fine. But that's just one person's opinion.

Do you have any money available now to put in your Roth or are you going to have to save it from each paycheck? The reason I ask is that most VG funds carry a $3,000 minimum. The STAR fund carries a $1,000 minimum and it would be a good one to start with if you need to. It will bring your stock to bond ratio down just a little which is why I suggested holding 75% stocks in your 401(k) instead of the 70% you said you want. Right now, the amount you save is much more important than having your percentages absolutely perfect. In fact, until your portfolio is at least $30 to $60k, it can be awkward to get things just right due to the $3,000 minimums. This is not a problem. Just consider it growing pains.

A recommendation:

401(k)
75% 500 Index
25% Intermediate bonds

Roth
Star Fund

This is not perfect. When you hit $3000 in your Roth, I would change STAR to total international (VGTSX) and adjust the stock/bond ratio in your 401(k) back to make the whole portfolio 70/30 - your stated target. This may make you a little high in international for a year, but it will even out as more money goes into your 401(k).

And, no, don't try to wait for "recovery". You'll just pay more for the same thing once recovery happens.

I realize I have repeated some of what others have already told you. I think, for new people especially, it is good to hear it different ways for better understanding. Good luck!

darthvader747
Posts: 51
Joined: Thu Feb 19, 2009 9:11 pm

Re: Just got a job! Help with 401K choices

Post by darthvader747 » Fri Feb 20, 2009 2:55 pm

retiredjg wrote:Hi Darth, welcome to the forum!

Since you are new to investing, you need to make a plan. Right now, you are just trying to "pick good funds", but that is backwards. Make a plan. Then pick the funds. Below is a link to an investment planning page. It also contains a list of several books. You need to read at least 1 to start, probably 2 or 3 over the next year. Unlike previous generations, you are going to have to make sure you have your own money for retirement. So education is critical.



You are so lucky to have Vanguard as your 401(k) provider! However, you did not list the Target Retirement Funds as an option. Is that because they are not available or were you just not interested? If they are available, your best bet would probably be to hold a TR fund in both your 401(k) and your Roth. That way, you get simplicity accompanied by the greatest amount of diversification possible for a beginning portfolio. By that I mean you would get total US stock market, total US bond market, and international stocks all in one fund.

I agree with others than Roth is better for most people than a traditional IRA. However, you must have had income in 2008 to make a 2008 Roth contribution and the contribution cannot exceed your income. If you did have income in 2008, that would be a very good choice.

The 500 index tracker is probably going to be your best choice, but not for the reasons you think. The 500 index is a big part of the total US market. If you had "total stock market" available, that would be a little better. If not, 500 index is just fine and should form part of the core of your portfolio. The fact that "the index is so low right now" is not why you buy it. It only means that you are able to buy your core funds cheaper than in the future. Like buying lots of toilet paper on sale because you know you will want it the rest of your life.

In my opinion, a reasonable moderate AA for you would be 70 - 75% stock. 80% stock is probably fine, but you get less "bang for your buck" (return for risk) if you go higher than 80%.

For today, I think your best bet would be holding 75% 500 index and 25% of the intermediate bonds. Modal's recommendation is fine too, but it involves the use of small cap growth funds. I think it would be better for you to understand what a total market approach actually is before going in that direction. For now, 500 index is just fine. But that's just one person's opinion.

Do you have any money available now to put in your Roth or are you going to have to save it from each paycheck? The reason I ask is that most VG funds carry a $3,000 minimum. The STAR fund carries a $1,000 minimum and it would be a good one to start with if you need to. It will bring your stock to bond ratio down just a little which is why I suggested holding 75% stocks in your 401(k) instead of the 70% you said you want. Right now, the amount you save is much more important than having your percentages absolutely perfect. In fact, until your portfolio is at least $30 to $60k, it can be awkward to get things just right due to the $3,000 minimums. This is not a problem. Just consider it growing pains.

A recommendation:

401(k)
75% 500 Index
25% Intermediate bonds

Roth
Star Fund

This is not perfect. When you hit $3000 in your Roth, I would change STAR to total international (VGTSX) and adjust the stock/bond ratio in your 401(k) back to make the whole portfolio 70/30 - your stated target. This may make you a little high in international for a year, but it will even out as more money goes into your 401(k).

And, no, don't try to wait for "recovery". You'll just pay more for the same thing once recovery happens.

I realize I have repeated some of what others have already told you. I think, for new people especially, it is good to hear it different ways for better understanding. Good luck!


I do have the $3000 for the roth. So what should my total portfolio allocation including the roth be? Also, do I go add $6000 for 2009 contribution to the same fund (eg VGTSX)? If I just keep adding money to the roth upto the maximum allowed, I will be adding a disproportionate amount of money to VGTSX! Wont I? What would you do?

ohiost90
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Joined: Wed Apr 11, 2007 3:24 pm

Post by ohiost90 » Fri Feb 20, 2009 3:06 pm

If I was 28 again this is what I would do...

1. Pick a target fund for my 401k
2. Open a Roth for '08 with a target fund for 5k
3. Set-up automated deposits to max out target fund in roth for 09 and beyond.
4. Forget my online passwords and not open my statements for 15 years.

darthvader747
Posts: 51
Joined: Thu Feb 19, 2009 9:11 pm

Re: Just got a job! Help with 401K choices

Post by darthvader747 » Fri Feb 20, 2009 3:29 pm

darthvader747 wrote:
retiredjg wrote:Hi Darth, welcome to the forum!

Since you are new to investing, you need to make a plan. Right now, you are just trying to "pick good funds", but that is backwards. Make a plan. Then pick the funds. Below is a link to an investment planning page. It also contains a list of several books. You need to read at least 1 to start, probably 2 or 3 over the next year. Unlike previous generations, you are going to have to make sure you have your own money for retirement. So education is critical.



You are so lucky to have Vanguard as your 401(k) provider! However, you did not list the Target Retirement Funds as an option. Is that because they are not available or were you just not interested? If they are available, your best bet would probably be to hold a TR fund in both your 401(k) and your Roth. That way, you get simplicity accompanied by the greatest amount of diversification possible for a beginning portfolio. By that I mean you would get total US stock market, total US bond market, and international stocks all in one fund.

I agree with others than Roth is better for most people than a traditional IRA. However, you must have had income in 2008 to make a 2008 Roth contribution and the contribution cannot exceed your income. If you did have income in 2008, that would be a very good choice.

The 500 index tracker is probably going to be your best choice, but not for the reasons you think. The 500 index is a big part of the total US market. If you had "total stock market" available, that would be a little better. If not, 500 index is just fine and should form part of the core of your portfolio. The fact that "the index is so low right now" is not why you buy it. It only means that you are able to buy your core funds cheaper than in the future. Like buying lots of toilet paper on sale because you know you will want it the rest of your life.

In my opinion, a reasonable moderate AA for you would be 70 - 75% stock. 80% stock is probably fine, but you get less "bang for your buck" (return for risk) if you go higher than 80%.

For today, I think your best bet would be holding 75% 500 index and 25% of the intermediate bonds. Modal's recommendation is fine too, but it involves the use of small cap growth funds. I think it would be better for you to understand what a total market approach actually is before going in that direction. For now, 500 index is just fine. But that's just one person's opinion.

Do you have any money available now to put in your Roth or are you going to have to save it from each paycheck? The reason I ask is that most VG funds carry a $3,000 minimum. The STAR fund carries a $1,000 minimum and it would be a good one to start with if you need to. It will bring your stock to bond ratio down just a little which is why I suggested holding 75% stocks in your 401(k) instead of the 70% you said you want. Right now, the amount you save is much more important than having your percentages absolutely perfect. In fact, until your portfolio is at least $30 to $60k, it can be awkward to get things just right due to the $3,000 minimums. This is not a problem. Just consider it growing pains.

A recommendation:

401(k)
75% 500 Index
25% Intermediate bonds

Roth
Star Fund

This is not perfect. When you hit $3000 in your Roth, I would change STAR to total international (VGTSX) and adjust the stock/bond ratio in your 401(k) back to make the whole portfolio 70/30 - your stated target. This may make you a little high in international for a year, but it will even out as more money goes into your 401(k).

And, no, don't try to wait for "recovery". You'll just pay more for the same thing once recovery happens.

I realize I have repeated some of what others have already told you. I think, for new people especially, it is good to hear it different ways for better understanding. Good luck!


I do have the $3000 for the roth. So what should my total portfolio allocation including the roth be? Also, do I go add $6000 for 2009 contribution to the same fund (eg VGTSX)? If I just keep adding money to the roth upto the maximum allowed, I will be adding a disproportionate amount of money to VGTSX! Wont I? What would you do?


An MSN article on 401k recommends the Vanguard Wellington Fund (VWELX) as a definite choice. Should I just allocate 50% of my roth to VWELX and 50% to VGTSX?

So my overall would be:

401(k):
75% 500 Index
25% Intermediate bonds

Roth

Total International VGTSX (50%)

Vanguard Wellington VWELX (50%)

Comments plese. And THANK YOU SO MUCH for all the help!

DSInvestor
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Joined: Sat Oct 04, 2008 11:42 am

Post by DSInvestor » Fri Feb 20, 2009 3:34 pm

Wellington is a great 60/40 balanced fund. However, it has a 10K minimum investment for new accounts. It may be a better choice inside your 401k where the 10K minimum may be waived.

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Fri Feb 20, 2009 4:16 pm

ohiost90 wrote:If I was 28 again this is what I would do...

1. Pick a target fund for my 401k

This is a perfect idea except the OP does not list a target fund in the 401(k) choices. Darn.

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: Just got a job! Help with 401K choices

Post by retiredjg » Fri Feb 20, 2009 4:28 pm

darthvader747 wrote:If I just keep adding money to the roth up to the maximum allowed, I will be adding a disproportionate amount of money to VGTSX! Wont I?

Correct. That is why your next $3,000 goes to something else. As you can see, the $3000 minimums throw things off the first few years. As your portfolio gets larger, it will all even out and be in the proportion you want. The first few years just have lumps and bumps due to the $3,000 minimums. But again, right now, the amount you save is the most important thing, not what fund it is in.

retiredjg
Posts: 30593
Joined: Thu Jan 10, 2008 12:56 pm

Re: Just got a job! Help with 401K choices

Post by retiredjg » Fri Feb 20, 2009 4:50 pm

darthvader747 wrote:An MSN article on 401k recommends the Vanguard Wellington Fund (VWELX) as a definite choice. Should I just allocate 50% of my roth to VWELX and 50% to VGTSX?

There you go again - picking "good funds" rather than picking funds to fit a good plan. :)

Wellington is wonderful. We all love it. BUT...when you hold a balanced fund (meaning it contains both stocks and bonds), it becomes awkward to figure out what you actually own. Every time you check your portfolio, you have to figure this out. "37% of my portfolio is Wellington and 60% of that is stocks. How many stocks do I have?" and then add that to the stocks that are in other places. A pain in the neck and totally unnecessary when you can get the same stocks in easier ways. Also, the expense ratio of Wellington is higher than holding most index funds (although Wellington is very cheap for a managed fund). Not to mention the $10k minimum....

Do you have another $3,000 to put in your Roth now? In fact, do you have more than another $3k to invest now?

You asked earlier about paying off your car loan. With such a low interest rate, I'd be inclined to not pay it off too early. If you pay it off at 3.9%, you are getting an immediate 3.9% return on your money. You are likely to do better in the market (long term, certainly not this month!) On the other hand, if you don't like having debt, it is rarely wrong, if ever, to pay them off.

If you can tell me how much money will be going into your 401(k) and how much cash you have to invest in your Roth, I can give you a starting portfolio idea. In reality, you need to get started reading so you understand how this works. Whatever starting idea someone here comes up with is not a good long term plan (unless you have a Target Retirement fund hidden away in your 401(k).... :lol: )

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Re: Just got a job! Help with 401K choices

Post by Ducks » Fri Feb 20, 2009 5:01 pm

retiredjg wrote:Correct. That is why your next $3,000 goes to something else. As you can see, the $3000 minimums throw things off the first few years. As your portfolio gets larger, it will all even out and be in the proportion you want. The first few years just have lumps and bumps due to the $3,000 minimums. But again, right now, the amount you save is the most important thing, not what fund it is in.

Thanks JG - you said this much better than I did. This is why I suggested picking a LifeStrategy fund (I said the moderate growth one, but really, pick the one that best matches your risk tolerance). It will get you in the door, start you on a decent path, and then after you have maxed out your savings for a few years, you can revisit the scenario and really get down and dirty. It would be better if you had a Target Retirement fund for sure. But since you do not, I chose the next simplest option.

Alternatively, split everything between Vanguard 500 Index Fund and Total Bond Market (this will have to go into your Roth) according to your preferred stock/bond split ... which we still haven't heard yet.

Have you taken that Vanguard quiz I linked earlier? If so, how did it come out?
Getting our Ducks in a row since 2008.

darthvader747
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Post by darthvader747 » Fri Feb 20, 2009 5:11 pm

retiredjg wrote:
ohiost90 wrote:If I was 28 again this is what I would do...

1. Pick a target fund for my 401k

This is a perfect idea except the OP does not list a target fund in the 401(k) choices. Darn.


How about this:

401(k)

Vanguard 500 40%
Vanguard Explorer 30%
Intermediate Invest GR Bond 30%

Roth:

Vanguard Target Retirement 2045 (VTIVX) and keep putting money in that every year up till the maximum limit

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Ducks
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Post by Ducks » Fri Feb 20, 2009 5:25 pm

How about this:

Vanguard 500 40%
Vanguard Explorer 30%
Intermediate Bond 30%

Where your total funds are:

Roth 2008 - $3,000
Roth 2009 - $5,000
401(k) 2009 - $5250
TOTAL: $13,250

Roth = $4000 Total Bond Market
Roth = $4000 Explorer (or any other one fund, really - what is Explorer doing for you?)
401(k) = $5250 S&P 500
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Post by DSInvestor » Fri Feb 20, 2009 5:50 pm

401k is already 70/30
Vanguard 500 40%
Explorer (small cap) 30%
Intermediate bond 30%

ROTH should be 70/30 to maintain allocation.
Target Retirement 2025 is 76/24
or
Target Retirement 2020 is 69/31

The advantage of this setup is that both the 401k and ROTH are at desired allocation. The ROTH will be rebalanced automatically. 401k can be rebalanced manually without consideration of the ROTH. It's a very manageable portfolio.

The TR 2025 holds slightly more stocks than OP's desired 70/30 but the stock allocation will decrease over time.

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Post by retiredjg » Fri Feb 20, 2009 5:54 pm

darthvader747 wrote:401(k)

Vanguard 500 40%
Vanguard Explorer 30%
Intermediate Invest GR Bond 30%

Roth: Vanguard Target Retirement 2045 (VTIVX) and keep putting money in that every year up till the maximum limit


DS Investor is right. If you are going this route, don't use TR 2045. Use the target fund close to 70/30 AA.

Again, I'm not too sure about the Vanguard Explorer which is small cap growth stocks. Small cap - yes. Growth - no. That's just what I have heard, but I know little to nothing about VG Explorer.

If you are going to mix things up, what do you think about Option 2:

401(k)
Wellington (60/40)

Roth
TR 2045 (90/10) or TR 2030 (85/15)

Since your 401(k) is bigger than the Roth, you'd have to play around with it to get 70% stocks in the total portfolio. But it is doable.

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Post by retiredjg » Fri Feb 20, 2009 6:16 pm

Ducks wrote:How about this:

Vanguard 500 40%
Vanguard Explorer 30%
Intermediate Bond 30%

Where your total funds are:

Roth 2008 - $3,000
Roth 2009 - $5,000
401(k) 2009 - $5250
TOTAL: $13,250

Roth = $4000 Total Bond Market
Roth = $4000 Explorer (or any other one fund, really - what is Explorer doing for you?)
401(k) = $5250 S&P 500

Ducks, I think you are on to a very good idea, but I think your estimate of the 401(k) contributions is low. Trouble is, we don't really know what the OP has available to invest!

401(k)
50% 500 index ($7,000)

Roth
30% Total Bond Market ($4,000)
20% International ($3,000)

This would be a great starting portfolio, but it does not take full advantage of all the potential Roth space for 2 years. However, $3,000 minimums are making that difficult. I suppose any other money (if indeed there is any available) could go into STAR fund in the Roth until $3k is reached. In fact, until the portfolio is bigger, that might be a real good idea.

Darth, my apologies. We have been on the merry-go-round with about a million recommendations and I suspect this has been more confusing to you than helpful. It is not usually this way. The truth is, we needed more info from you than we had and we tried to help anyway. It is possible we have done more harm than good, and if that is the case, I'm really sorry. If you have any idea which of these ideas looks best to you, perhaps one of us can help fine tune it.

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Post by Ducks » Fri Feb 20, 2009 6:47 pm

retiredjg wrote:Ducks, I think you are on to a very good idea, but I think your estimate of the 401(k) contributions is low. Trouble is, we don't really know what the OP has available to invest!

Yeah - I assumed 7% of $75,000. I still think OP should choose a single fund for all accounts until he is at about $25k total and then revisit the Asset Allocation issue. For the few years he will sit in a LifeStrategy fund, he'll at least be in the market, buying in low... (theoretically ;))... and the few % either way won't make that big of a difference. At that point, it'll certainly make things easier for us! ;)

The truth is, we needed more info from you than we had and we tried to help anyway. It is possible we have done more harm than good, and if that is the case, I'm really sorry. If you have any idea which of these ideas looks best to you, perhaps one of us can help fine tune it.

100% Agreed. Darth, I will restate my hope that you will take the Vanguard Risk Assessment Quiz, and at least determine a stock/bond ratio that you are comfortable with. Then pick the most basic funds that meet that goal. When you get more $ in your accounts, you might choose to get more intricate.
Getting our Ducks in a row since 2008.

Laura
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Getting Started

Post by Laura » Sun Feb 22, 2009 10:45 am

Darth,

The key to long term investing success is a plan. You are in the process of building one and would like to start with an asset allocation of 70/30. This is great. Step one done.

Next, you need to pick the funds that will allow you to implement your plan and pick the best place to hold those funds. You have two options for location - your 401k or a roth IRA. Most of us here recommend:
1. 401k to receive the full match. (2% of your salary)
2. Max out roth ($5k)
3. Max out 401k

So, you should change your 401k contributions and set it at 2% of your income for now then direct the next $5k into a roth IRA. If you still have more money for investing then direct it toward the 401k by increasing the 2% figure to 3%, 4%, or more.

Your savings rate is far more important than actual fund selection at this point in time. When starting from zero every new contribution dramatically changes the value of your portfolio. Let's build a plan for the next few years:

2009

roth
Star (requires $1k to open)

401k
LifeStrategy Moderate Growth

2010

roth
Switch Star to Target Retirement 2020 (do this when your roth reaches $3k total)

401k
Life Strategy Growth

2011+

roth
Target Retirement 2020

401k
LifeStrategy Growth

You should work toward contributing 10% of your gross income into these two retirement accounts.

Next, you have a car loan. Your interest rate is fairly low but I would still concentrate on paying it off so you can free up extra cash flow for the future. So, after getting to 10% of your income into your retirement accounts direct any excess money toward the car loan.

One other suggestion, even when you pay off your car loan continue paying the same amount monthly. However, instead of paying the bank add the money into your emergency fund bucket. You are basically pre-paying for a car in the future. When you need to replace the car you just purchased you will have the money and can pay cash.

Keep investing simple. All you need for long term success is the Target Retirement fund and the LifeStrategy Moderate Growth fund. It really is that easy.

Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.

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Re: Just got a job! Help with 401K choices

Post by Valuethinker » Sun Feb 22, 2009 12:45 pm

darthvader747 wrote:Hi All,

I recently got a job with a major pharma company. I want help chosing my 401K funds. I am a total newbie to investing!

My company contributes 3% of my salary and matches dollar to dollar up to 2%. So I have elected to deduct 5% of my salary from my paychecks. The idea being that I get a total of 10% annual saving's for my 401K (3%-comp;2%-Me;2%-comp match;3%-me).

I was wondering if I should invest a lot in the S&P 500 tracker index fund (VIFSX) since the index is so low right now. However, I think it will go down further. What do you guys think? I was also thinking of investing in the windsor fund (VWNDX). Right now my money is in the vanguard treasury money market fund. Should I just keep the money parked there until the economy shows some sign's of recovery?

Also should I open a roth IRA or a regular IRA? Should I open it with Vanguard who runs my 401K. Is it easier to manage that way? I was leaning towards roth since there are no penalties for withdrawals!

Salary: $65,000-$75,000

Emergency funds = 12 months worth of expenses

Debt: Car Loan $18,000@3.9%

Tax Filing Status: Single

Tax Rate: Federal-25% (I think)

Age: 28

Desired Asset allocation: Not sure, please recommend. I am willing to take moderate risk.


Funds in my company 401K which is provided by Vanguard:

Balanced Funds

Vanguard LifeStrategy Consrv Grwth VSCGX
Vanguard LifeStrategy Growth Fund VASGX
Vanguard LifeStrategy Income Fund VASIX
Vanguard LifeStrategy Mod Growth VSMGX

Short Term Reserves
Vanguard Treasury Money Mkt Fund VMPXX

Bond Funds

Vanguard Inter-Term Invest-Gr Inv VFICX
Vanguard Short-Term Invest-Gr Inv VFSTX

Balanced Funds (Stocks and Bonds)
Vanguard Wellington Fund Inv VWELX

Domestic Stock Funds
Vanguard Explorer Fund Investor VEXPX
Vanguard U.S. Growth Fund Investor VWUSX
Vanguard Windsor Fund Investor VWNDX
Vanguard 500 Index Fund Signal VIFSX

Please help me secure my future!


You have received a lot of excellent advice here.

Can I suggest a 'big picture' solution?

Work towards

30% in bonds - VG ST investment grade

70% in stocks - VG 500 index

You really should have 20% in an international stock fund (out of the 70% ie only 50% in the 500 index fund) but I don't see a fund that would do this for you. If an inferior (higher expense ratio) fund from another company is available, I would still do 10% in that fund and 60% in S&P500 index.

My thinking is simply this:

- you are young, and have lots of years to recover from the bear market.

Yes stocks could drop another 50% from here, but you have a whole career to recover that.

- 30% bonds will, however, calm your nerves in the bad years. All you have to do is rebalance, once a year, back to your 70/30 target, and forget about it.

Otherwise I suggest the LifeStrategy Conservative Growth Fund, which will also provide you with a degree of diversification and stability (100% invested in).

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Post by giacolet » Sun Feb 22, 2009 2:52 pm

darthvader747

You are getting some mixed advice here. Some seem to be confusing Target Retirement Funds (not one of your options) with Life Strategy Funds (which is one of your options).

Also, take heed. The Balanced Funds, which are all Target Retirement and LifeStrategy funds, contain taxable and tax advantaged funds which may lead to asset allocation adjustment problems down the line.

The Vanguard 500 Index Fund Signal shares is a great advantage fund for you. Take advantage of it early on. I'd put 100% of my 401k in that fund.

I would also fund the IRA (a Roth is suggested) with taxadvantaged investments. I'd put my entire $5,000.00 per year into Total Bond market.

I would keep these two funds going until I reach a portfolio worth $100k.

At that juncture, with a solid core of diversified low cost index funds in your portfolio, re-evaluate.
May your heart always be joyful. | May your song always be sung. | May you stay forever young. | ----Bob Dylan

SnoDad
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Nice

Post by SnoDad » Sun Feb 22, 2009 2:58 pm

Was a lot of help.

darthvader747
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Joined: Thu Feb 19, 2009 9:11 pm

Re: Getting Started

Post by darthvader747 » Mon Feb 23, 2009 10:18 am

Laura wrote:Darth,

The key to long term investing success is a plan. You are in the process of building one and would like to start with an asset allocation of 70/30. This is great. Step one done.

Next, you need to pick the funds that will allow you to implement your plan and pick the best place to hold those funds. You have two options for location - your 401k or a roth IRA. Most of us here recommend:
1. 401k to receive the full match. (2% of your salary)
2. Max out roth ($5k)
3. Max out 401k

So, you should change your 401k contributions and set it at 2% of your income for now then direct the next $5k into a roth IRA. If you still have more money for investing then direct it toward the 401k by increasing the 2% figure to 3%, 4%, or more.

Your savings rate is far more important than actual fund selection at this point in time. When starting from zero every new contribution dramatically changes the value of your portfolio. Let's build a plan for the next few years:

2009

roth
Star (requires $1k to open)

401k
LifeStrategy Moderate Growth

2010

roth
Switch Star to Target Retirement 2020 (do this when your roth reaches $3k total)

401k
Life Strategy Growth

2011+

roth
Target Retirement 2020

401k
LifeStrategy Growth

You should work toward contributing 10% of your gross income into these two retirement accounts.

Next, you have a car loan. Your interest rate is fairly low but I would still concentrate on paying it off so you can free up extra cash flow for the future. So, after getting to 10% of your income into your retirement accounts direct any excess money toward the car loan.

One other suggestion, even when you pay off your car loan continue paying the same amount monthly. However, instead of paying the bank add the money into your emergency fund bucket. You are basically pre-paying for a car in the future. When you need to replace the car you just purchased you will have the money and can pay cash.

Keep investing simple. All you need for long term success is the Target Retirement fund and the LifeStrategy Moderate Growth fund. It really is that easy.

Laura


First of all I want to thank you all for trying to help me out. Ducks, I have taken the vanguard survey and the outcome was a 80/30 ratio. I like your idea Laura as you give me a simple plan which spans out over a few years. Simple because its a life strategy fund (Moderate Growth) and I dont have to worry too much about the allocations.

The only thing I feel is that I may be missing out on the Vanguard 500 signal fund which is offered in my 401k, and everybody seems to think its a great fund. Thats okay with me, but I just wanted to point that out and get your view on that.

I have one question that I would really appreciate answered. Why do you guys recommend that I only go for the 2% match in my 401K and max out my roth IRA?

Also, I called the Ernst and Young financial help line and they suggested that I allocate my assets like this (In my 401K):

29%-Bonds
28%-Large Cap
7%-Mid Cap
36%-International

They said this spread targets a overall long term return of 7.5%. They added that I can expect a maximum one year loss of 17% and one year gain of 34%. Obviously they said that this is just for guidance and nothing is written in stone! They also said that instead of doing this, I could just go for the vanguard moderate growth fund as suggested by Laura.

The simplest option so far has been:

401(k)

Vanguard Life Strategy Mod Growth Fund VSMGX ( Upto Match)

Roth IRA

Max out roth IRA in Target ret 2020 fund

I like the simplicity of this solution. Am I missing out on the much spoken vanguard s&p 500 signal fund. How much diff would it really make. Ducks-what say you?

Thanks all, please keep the ideas coming! Cant really express how much I appreciate this help. I have already learnt so much!

PS: Why should I max out my roth and invest only to match in my 401(k) as per most you guys?

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Re: Getting Started

Post by retiredjg » Mon Feb 23, 2009 12:21 pm

darthvader747 wrote:The only thing I feel is that I may be missing out on the Vanguard 500 signal fund which is offered in my 401k, and everybody seems to think its a great fund.

Darth, you would not be missing the S&P 500 (Vanguard 500) - it is in the total stock market fund which is in the life strategy fund. Laura's advice is simply a different way to do it.

I have one question that I would really appreciate answered. Why do you guys recommend that I only go for the 2% match in my 401K and max out my roth IRA?

I believe that was a typo or maybe Laura read your company match wrong. (If not, hopefully Laura will jump back in and correct me.) Get all the free money possible by contributing at least up to the full company match. Put $5,000 in your Roth. If you still have money left to invest, put more in your 401(k). Laura's suggestion was to invest 10% of your salary in your retirement accounts and if you have more money available after that, to pay off more on your car loan.

Also, I called the Ernst and Young financial help line and they suggested that I allocate my assets like this (In my 401K):

29%-Bonds
28%-Large Cap
7%-Mid Cap
36%-International

They said this spread targets a overall long term return of 7.5%. They added that I can expect a maximum one year loss of 17% and one year gain of 34%.

I doubt that anyone here would agree. With 71% in stocks, most here would say you to expect a 30 - 35% drop.

You really need to do some reading so all this makes more sense to you. You've been given a lot of seemingly different portfolio recommendations. However, many are simply different ways of getting the same stuff. I would suggest that Bogleheads' Guide to Investing would help you understand this a lot.

darthvader747
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Re: Getting Started

Post by darthvader747 » Mon Feb 23, 2009 2:14 pm

retiredjg wrote:
darthvader747 wrote:The only thing I feel is that I may be missing out on the Vanguard 500 signal fund which is offered in my 401k, and everybody seems to think its a great fund.

Darth, you would not be missing the S&P 500 (Vanguard 500) - it is in the total stock market fund which is in the life strategy fund. Laura's advice is simply a different way to do it.

I have one question that I would really appreciate answered. Why do you guys recommend that I only go for the 2% match in my 401K and max out my roth IRA?

I believe that was a typo or maybe Laura read your company match wrong. (If not, hopefully Laura will jump back in and correct me.) Get all the free money possible by contributing at least up to the full company match. Put $5,000 in your Roth. If you still have money left to invest, put more in your 401(k). Laura's suggestion was to invest 10% of your salary in your retirement accounts and if you have more money available after that, to pay off more on your car loan.

Also, I called the Ernst and Young financial help line and they suggested that I allocate my assets like this (In my 401K):

29%-Bonds
28%-Large Cap
7%-Mid Cap
36%-International

They said this spread targets a overall long term return of 7.5%. They added that I can expect a maximum one year loss of 17% and one year gain of 34%.

I doubt that anyone here would agree. With 71% in stocks, most here would say you to expect a 30 - 35% drop.

You really need to do some reading so all this makes more sense to you. You've been given a lot of seemingly different portfolio recommendations. However, many are simply different ways of getting the same stuff. I would suggest that Bogleheads' Guide to Investing would help you understand this a lot.


Retiredjg I realize that I will be investing in the S&P 500 indirectly through the moderate growth life strategy fund. The life strategy fund has expenses listed as .23% whereas the S&P 500 signal fund has an expense ratio of .07%. This is what I wanted to point out to Laura and ask her thoughts on it.

retiredjg
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Re: Getting Started

Post by retiredjg » Mon Feb 23, 2009 2:36 pm

darthvader747 wrote: The life strategy fund has expenses listed as .23% whereas the S&P 500 signal fund has an expense ratio of .07%. This is what I wanted to point out to Laura and ask her thoughts on it.

Yes. That's why I suggested the 500 index in the first place. However, Laura is probably the most respected portfolio designer on this forum and if she suggested life strategy, she had a reason. (Like you, I'd like to know what it is!)

If she does not reply here, I'd suggest a PM. She is very busy and may miss your question. Good luck!

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Post by giacolet » Mon Feb 23, 2009 7:08 pm

Do not miss the opportunity for the Signal shares in your 401k.

I don't see how anything could be simpler than Vanguard 500 Index Fund Signal Shares in your 401k and Total Bond Market in your Roth IRA.

Compare the costs of the LifeStrategy Fund to the Signal share costs of the 500 Index Fund. It's a no brainer in my book.

The printed Boglehead guides do not recommend LifeStrategy or Target Retirement Funds or Star Fund. These are recommended by some on this Forum, however.

It's your choice.
May your heart always be joyful. | May your song always be sung. | May you stay forever young. | ----Bob Dylan

Laura
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Why

Post by Laura » Mon Feb 23, 2009 9:07 pm

darth,

Let me try to explain. First, you ask why I recommend only 2% in the 401k then the rest in a roth. You wrote:
My company contributes 3% of my salary and matches dollar to dollar up to 2%. So I have elected to deduct 5% of my salary from my paychecks. The idea being that I get a total of 10% annual saving's for my 401K (3%-comp;2%-Me;2%-comp match;3%-me).


If I understand you correct you get 3% from your company whether you contribute or not. After that, if you contribute 2% the company will give you another 2%. So, I selected the 2% because that will get the match.

Now, I said do that then the roth because you are young and can benefit from many, many years of tax free growth. You are in the 25% tax bracket and many people think taxes will go up so you can pay taxes now in a lower tax bracket then let it grow tax free. Of course, no one can predict what will happen with taxes in the future.

On the question of the LifeStrategy fund vs the S&P 500 fund I prefer the LifeStrategy fund. You are just getting stated and can benefit from immediate diversification by using two balanced funds. You are also going to be contributing different amounts to the different accounts so using these balanced funds makes it much easier to maintain your desired asset allocation. The cost is a little more but let's put this in perspective. If you have $5k at .23 that means you are paying $11.5. If you put the money in the less diverse S&P 500 fund at .07 you are paying $3.50. We are talking very small sums of money right now. I would be willing to pay a little extra for the ease of management and diversification.

Now, in a few years when your portfolio is larger and you can contribute more to the 401k then you can easily switch to different funds if you want to. It isn't required.

As Taylor says, we are dancing on the head of a pin. Mr. Bogle recommends simplicity and I agree so I prefer the LifeStrategy/TR fund combo but both are a winning combination and far superior to the other 99% of the fund options available.

Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.

darthvader747
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Re: Why

Post by darthvader747 » Wed Feb 25, 2009 5:08 pm

Laura wrote:darth,

Let me try to explain. First, you ask why I recommend only 2% in the 401k then the rest in a roth. You wrote:
My company contributes 3% of my salary and matches dollar to dollar up to 2%. So I have elected to deduct 5% of my salary from my paychecks. The idea being that I get a total of 10% annual saving's for my 401K (3%-comp;2%-Me;2%-comp match;3%-me).


If I understand you correct you get 3% from your company whether you contribute or not. After that, if you contribute 2% the company will give you another 2%. So, I selected the 2% because that will get the match.

Now, I said do that then the roth because you are young and can benefit from many, many years of tax free growth. You are in the 25% tax bracket and many people think taxes will go up so you can pay taxes now in a lower tax bracket then let it grow tax free. Of course, no one can predict what will happen with taxes in the future.

On the question of the LifeStrategy fund vs the S&P 500 fund I prefer the LifeStrategy fund. You are just getting stated and can benefit from immediate diversification by using two balanced funds. You are also going to be contributing different amounts to the different accounts so using these balanced funds makes it much easier to maintain your desired asset allocation. The cost is a little more but let's put this in perspective. If you have $5k at .23 that means you are paying $11.5. If you put the money in the less diverse S&P 500 fund at .07 you are paying $3.50. We are talking very small sums of money right now. I would be willing to pay a little extra for the ease of management and diversification.

Now, in a few years when your portfolio is larger and you can contribute more to the 401k then you can easily switch to different funds if you want to. It isn't required.

As Taylor says, we are dancing on the head of a pin. Mr. Bogle recommends simplicity and I agree so I prefer the LifeStrategy/TR fund combo but both are a winning combination and far superior to the other 99% of the fund options available.

Laura


Laura, thanks for the explanation. Now I think I know what to do and why. Thanks a ton to all you guys. Really appreciate the help.

bozo
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Post by bozo » Wed Feb 25, 2009 5:23 pm

I'd go with a "balanced" 60/40. Don't try to time the market.

An employer match is nice. My wife has one, and it just about made up for one fourth of what her 401K lost last year.

Oh, well, this is why I took half off the table back in 2004.

Mamma said, mamma said.


"Mamma said theyrd be days like this, mamma said mamma said."

Anybody remember that song?

Bozo

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