First retirement account advice

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Topic Author
brett41
Posts: 56
Joined: Mon Mar 09, 2020 10:20 am

First retirement account advice

Post by brett41 » Wed Mar 25, 2020 4:37 pm

We just started a Roth IRA for my wife at Fidelity. She is 31 and has no retirement savings. Her work offers a 403b w/ no match. She only has enough to contribute 500 a month to max out the Roth.

Should she start with a single fund until she gets to a certain amount and then split to a 4 fund? If so what would that dollar amount be?

She eventually wants to be at
Fskax 50%
Ftihx 30%
Fxnax 10%
Fsrnx 10%
And plans to increase bond allocation 5% each 5 years

If you would recommend starting with one fund until the account is larger, what would it be?
Fxaix, Fskax, Ffnox, Fffhx, or something else?

bloom2708
Posts: 7412
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: First retirement account advice

Post by bloom2708 » Wed Mar 25, 2020 4:42 pm

If you are married, do you make enough extra to help save for both of you?

We are a one income family now. I max my pre-tax 401k and both our Roth IRAs each year. Family HSA too.

No his/her money once married. Her pre-tax 403b is a great way to save. Defer the tax and get a bigger check.

Just some ideas. I don't have the symbols memorized. I would keep Roths 100% stocks and put bonds in workplace plans.
"People want confirmation, not advice" Unknown | "We are here to provoke thoughtfulness, not agree with you" Unknown | Four words: Whole food, plant based

Topic Author
brett41
Posts: 56
Joined: Mon Mar 09, 2020 10:20 am

Re: First retirement account advice

Post by brett41 » Wed Mar 25, 2020 4:48 pm

bloom2708 wrote:
Wed Mar 25, 2020 4:42 pm
If you are married, do you make enough extra to help save for both of you?

We are a one income family now. I max my pre-tax 401k and both our Roth IRAs each year. Family HSA too.

No his/her money once married. Her pre-tax 403b is a great way to save. Defer the tax and get a bigger check.

Just some ideas. I don't have the symbols memorized. I would keep Roths 100% stocks and put bonds in workplace plans.
Yes, I have a Roth 401k that is 100% in Fidelity 500 right now. Only has a balance of just 36k right now. I get a 5% match and contribute up to that. I will also be mirroring whatever we do in her Roth IRA with Fidelity. We both have very stable jobs that offer pensions as well.Our income is still low enough that we are in the 12% tax bracket for now.

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ruralavalon
Posts: 17659
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: First retirement account advice

Post by ruralavalon » Wed Mar 25, 2020 5:05 pm

brett41 wrote:
Wed Mar 25, 2020 4:37 pm
We just started a Roth IRA for my wife at Fidelity. She is 31 and has no retirement savings. Her work offers a 403b w/ no match. She only has enough to contribute 500 a month to max out the Roth.

Should she start with a single fund until she gets to a certain amount and then split to a 4 fund? If so what would that dollar amount be?

She eventually wants to be at
Fskax 50%
Ftihx 30%
Fxnax 10%
Fsrnx 10%
And plans to increase bond allocation 5% each 5 years

If you would recommend starting with one fund until the account is larger, what would it be?
Fxaix, Fskax, Ffnox, Fffhx, or something else?
brett41 wrote:
Wed Mar 25, 2020 4:48 pm
bloom2708 wrote:
Wed Mar 25, 2020 4:42 pm
If you are married, do you make enough extra to help save for both of you?

We are a one income family now. I max my pre-tax 401k and both our Roth IRAs each year. Family HSA too.

No his/her money once married. Her pre-tax 403b is a great way to save. Defer the tax and get a bigger check.

Just some ideas. I don't have the symbols memorized. I would keep Roths 100% stocks and put bonds in workplace plans.
Yes, I have a Roth 401k that is 100% in Fidelity 500 right now. Only has a balance of just 36k right now. I get a 5% match and contribute up to that. I will also be mirroring whatever we do in her Roth IRA with Fidelity. We both have very stable jobs that offer pensions as well.Our income is still low enough that we are in the 12% tax bracket for now.
If good low expense funds are offered in your 401k plan then don't necessarily limit yourself to contributing just enough to get the employer match.

If good low expense funds are offered in her 403b plan it may be worthwhile to contribute to that plan even without an employer match.

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

For a very simple portfolio she and you could consider just a single fund, like a low expense Fidelity Freedom Index Fund or Fidelity Four-in-One Index Fund (FFNOX).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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