Investment strategies in my early 40's

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Topic Author
LRH
Posts: 10
Joined: Wed May 11, 2022 9:05 am

Investment strategies in my early 40's

Post by LRH »

Hi -

I am new to the board and would like some feedback from the experts here:

1. 401K - my company automatically contributes 5% whether we match or not. I contribute 8% of my current salary in my Fidelity 401K plan.

2. I opened a ROTH IRA and an Individual Account to start adding more money since my student loans from graduate school have been paid off.

3. I also have a M1 account that I contribute about $100 each month

Question - how should I contribute to my ROTH IRA? I currently have the following - AAP:, FSKAX, MSFT, SPAXX, SYK, VOO, and VTI. Fidelity doesn't have auto-transfers so if someone can provide any suggestions or recommendations that would be great.

I am investing for the long term and would prefer a strategy that will allow me to set it and forget it. Would using a service like Betterment be ideal for someone like me?
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ruralavalon
Posts: 23271
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Investment strategies in my early 40's

Post by ruralavalon »

Welcome to the forum :) .

It's great that your "student loans from graduate school have been paid off."
" .

LRH wrote: Thu May 12, 2022 9:14 am Hi -

I am new to the board and would like some feedback from the experts here:

1. 401K - my company automatically contributes 5% whether we match or not. I contribute 8% of my current salary in my Fidelity 401K plan.
How much (in dollars) do you contribute to your employer's 401k plan annually? The maximum annual employee contribution is $20.5k. The employer contribution does not count toward the employee maximum, it's extra.I

I suggest maximum annual employee contributions if practical.

What funds are offered in your employer's plan? Please give fund names, tickers, and expense ratios.


LRH wrote: Thu May 12, 2022 9:14 am2. I opened a ROTH IRA and an Individual Account to start adding more money since my student loans from graduate school have been paid off.
The maximum annual contribution to an IRA is $6k.

"If the company plan offers good, low-cost funds, it may be preferable to contribute to the company plan before contributing to an IRA" .

Wiki article PrioritizingInvestments.

LRH wrote: Thu May 12, 2022 9:14 am3. I also have a M1 account that I contribute about $100 each month
I suggest maximum annual contributions to all tax-advantaged accounts as a priority ahead of investing in a taxable account.

Wiki article PrioritizingInvestments.



LRH wrote: Thu May 12, 2022 9:14 amQuestion - how should I contribute to my ROTH IRA? I currently have the following - AAP:, FSKAX, MSFT, SPAXX, SYK, VOO, and VTI. Fidelity doesn't have auto-transfers so if someone can provide any suggestions or recommendations that would be great.
In a Roth IRA at Fidelity I suggest at using:
1) FSKAX - Fidelity ® Total Market Index Fund; and
2) FTIHX - Fidelity ® Total International Index Fund.




LRH wrote: Thu May 12, 2022 9:14 amI am investing for the long term and would prefer a strategy that will allow me to set it and forget it. Would using a service like Betterment be ideal for someone like me?
Probably not, if you are able to manage for yourself.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
LRH
Posts: 10
Joined: Wed May 11, 2022 9:05 am

Re: Investment strategies in my early 40's

Post by LRH »

ruralavalon wrote: Thu May 12, 2022 12:33 pm Welcome to the forum :) .

It's great that your "student loans from graduate school have been paid off."
" .
Thanks! It was a tough task, but I got it done with the help of a part time job...LOL
LRH wrote: Thu May 12, 2022 9:14 am Hi -

I am new to the board and would like some feedback from the experts here:

1. 401K - my company automatically contributes 5% whether we match or not. I contribute 8% of my current salary in my Fidelity 401K plan.
How much (in dollars) do you contribute to your employer's 401k plan annually? The maximum annual employee contribution is $20.5k. The employer contribution does not count toward the employee maximum, it's extra.I

I suggest maximum annual employee contributions if practical.

What funds are offered in your employer's plan? Please give fund names, tickers, and expense ratios.

I contribute about $7,000 a year it appears.
Funds - FSNZX
Expense Ratio - 0.65%



LRH wrote: Thu May 12, 2022 9:14 am2. I opened a ROTH IRA and an Individual Account to start adding more money since my student loans from graduate school have been paid off.
The maximum annual contribution to an IRA is $6k.

"If the company plan offers good, low-cost funds, it may be preferable to contribute to the company plan before contributing to an IRA" .

Wiki article PrioritizingInvestments.
Did not know this.. Thanks!

LRH wrote: Thu May 12, 2022 9:14 am3. I also have a M1 account that I contribute about $100 each month
I suggest maximum annual contributions to all tax-advantaged accounts as a priority ahead of investing in a taxable account.

Wiki article PrioritizingInvestments.

Thanks!



LRH wrote: Thu May 12, 2022 9:14 amQuestion - how should I contribute to my ROTH IRA? I currently have the following - AAP:, FSKAX, MSFT, SPAXX, SYK, VOO, and VTI. Fidelity doesn't have auto-transfers so if someone can provide any suggestions or recommendations that would be great.
In a Roth IRA at Fidelity I suggest at using:
1) FSKAX - Fidelity ® Total Market Index Fund; and
2) FTIHX - Fidelity ® Total International Index Fund.




LRH wrote: Thu May 12, 2022 9:14 amI am investing for the long term and would prefer a strategy that will allow me to set it and forget it. Would using a service like Betterment be ideal for someone like me?
Probably not, if you are able to manage for yourself.
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ruralavalon
Posts: 23271
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Investment strategies in my early 40's

Post by ruralavalon »

I contribute about $7,000 a year it appears.
Funds - FSNZX
Expense Ratio - 0.65%
You may be able to use funds with lower expense ratios than Fidelity Freedom® 2045 K (FSNZX) ER 0.65%.

Low expense ratios are important to long-term investing performance.

What other funds are offered in your employer's 401k plan? Please give fund names, tickers, and expense ratios.

Establishing a high rate of contributions is the most important investing decision you can make, forum discussion.
Last edited by ruralavalon on Thu May 12, 2022 1:31 pm, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
mega317
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Joined: Tue Apr 19, 2016 10:55 am

Re: Investment strategies in my early 40's

Post by mega317 »

Your investing plan, as it reads here, is scattershot. Individual companies, multiple funds with tons of overlap. Probably what you should do is start over from the beginning, build your plan top-down.

https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/forum/viewtopic.php?t=6212
tashnewbie
Posts: 2901
Joined: Thu Apr 23, 2020 12:44 pm

Re: Investment strategies in my early 40's

Post by tashnewbie »

Welcome to the forum.

I agree that you should maybe take a step back and figure out a high-level plan and then work to execute it. Getting Started wiki is a good place to start, no pun intended.
LRH wrote: Thu May 12, 2022 9:14 am 2. I opened a ROTH IRA and an Individual Account to start adding more money since my student loans from graduate school have been paid off.
You mention a Roth IRA and an Individual Account. So you have these 2 accounts at Fidelity? What is the "Individual Account"?
Fidelity doesn't have auto-transfers so if someone can provide any suggestions or recommendations that would be great.
Fidelity does support automated investments into mutual funds, but not ETFs. I've set it up with a HSA at Fidelity. I don't remember the steps to do it, but look for something on your account page like "automatic investment schedule". If you still can't figure it out, I'm sure you can Google it or contact a Fidelity rep via chat or phone, or another Boglehead may be able to help.
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Duckie
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Re: Investment strategies in my early 40's

Post by Duckie »

tashnewbie wrote: Thu May 12, 2022 2:57 pm You mention a Roth IRA and an Individual Account. So you have these 2 accounts at Fidelity? What is the "Individual Account"?
I think that's a standard taxable account. Vanguard also calls it "Individual".
tashnewbie
Posts: 2901
Joined: Thu Apr 23, 2020 12:44 pm

Re: Investment strategies in my early 40's

Post by tashnewbie »

Duckie wrote: Thu May 12, 2022 5:32 pm
tashnewbie wrote: Thu May 12, 2022 2:57 pm You mention a Roth IRA and an Individual Account. So you have these 2 accounts at Fidelity? What is the "Individual Account"?
I think that's a standard taxable account. Vanguard also calls it "Individual".
Makes sense. So OP has 2 taxable brokerage accounts, one at Fidelity and one at M1? I don't think OP needs more than 1.
Topic Author
LRH
Posts: 10
Joined: Wed May 11, 2022 9:05 am

Re: Investment strategies in my early 40's

Post by LRH »

mega317 wrote: Thu May 12, 2022 1:31 pm Your investing plan, as it reads here, is scattershot. Individual companies, multiple funds with tons of overlap. Probably what you should do is start over from the beginning, build your plan top-down.

https://www.bogleheads.org/wiki/Getting_started
Thanks for the feedback. Will look at the link provided.
Topic Author
LRH
Posts: 10
Joined: Wed May 11, 2022 9:05 am

Re: Investment strategies in my early 40's

Post by LRH »

Thanks for all the help. Just looking for a strategy where I can auto invest and keep it moving....Seems like contributing to an index fund in my ROTH and increase my 401K contributions are the way to go.
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