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Started By
Message
401k Advice
Posted on 8/24/15 at 11:46 am
Posted on 8/24/15 at 11:46 am
I'm 27 and have been contributing to a 401k about 4 years. I really don't have much knowledge when it comes to the market, investing, retirement...but I have been trying to "grow up" lately by starting to pay attention to these things.
When I first setup my 401k, I basically just picked one of the premade investment plans, I believe one of the higher risk since I was young, and never looked back. I have basically been contributing money ever since and not really paying attention to what that money is doing or where it was going.
With all this talk about the stock market dropping off, I pulled up my online account today for my 401k...
"Your account rate of return from August 22, 2014 until August 21, 2015 is -1.4%."
Now it's really got my interest, as I am sure this is not good and should not be in the red.
With no knowledge of the stock market and which funds to allocate this money to, I am looking for some advice to resurrect this issue. Should I follow a different of the "pre-made plans" they offer or should I try to select my investments on my own?
Any advice is appreciated from the MT Board, I can provide additional information if needed.
When I first setup my 401k, I basically just picked one of the premade investment plans, I believe one of the higher risk since I was young, and never looked back. I have basically been contributing money ever since and not really paying attention to what that money is doing or where it was going.
With all this talk about the stock market dropping off, I pulled up my online account today for my 401k...
"Your account rate of return from August 22, 2014 until August 21, 2015 is -1.4%."
Now it's really got my interest, as I am sure this is not good and should not be in the red.
With no knowledge of the stock market and which funds to allocate this money to, I am looking for some advice to resurrect this issue. Should I follow a different of the "pre-made plans" they offer or should I try to select my investments on my own?
Any advice is appreciated from the MT Board, I can provide additional information if needed.
5
Posted on 8/24/15 at 11:49 am to Mark Makers
27 - keep plugging away - you will be just fine at 60.
vanguard is your friend
Max out 401k and Roth - save 10 percent of paycheck for brokerage account -
vanguard is your friend
Max out 401k and Roth - save 10 percent of paycheck for brokerage account -
Posted on 8/24/15 at 12:11 pm to nelatf
quote:
27
quote:
Max out 401k and Roth - save 10 percent of paycheck for brokerage account -
Posted on 8/24/15 at 12:43 pm to Mark Makers
We're just in a bad period. Will be many more good periods before you retire. save away
Posted on 8/24/15 at 1:06 pm to Mark Makers
I am by no means a guru but your situation is similar to mine and and many others in the late 20's, early 30's range. Our 401K will fluctuate dramatically because the Retirement and Stock Mix (assuming that is what your portfolio mix consists of) is one of higher risk. The younger you are, the riskier an investment mix your institution will recommend, vice versa.
My YTD ROR -2.43%, however, my ROR for an entire year is +2.7%. That should tell you how much fluctuation can occur in a short period of time within the market.
Case in point, don't worry about short term falls. Keep an eye on it but don't make any drastic decisions. FWIW, I chose to do 100% in a 2055 Retirement plan instead of stock and retirement fund mix. I purchase stock via my Associate Stock purchase plan from work which is separate from 401k so I can sit on the 401K and manage stock via another source.
My YTD ROR -2.43%, however, my ROR for an entire year is +2.7%. That should tell you how much fluctuation can occur in a short period of time within the market.
Case in point, don't worry about short term falls. Keep an eye on it but don't make any drastic decisions. FWIW, I chose to do 100% in a 2055 Retirement plan instead of stock and retirement fund mix. I purchase stock via my Associate Stock purchase plan from work which is separate from 401k so I can sit on the 401K and manage stock via another source.
This post was edited on 8/24/15 at 1:08 pm
Posted on 8/24/15 at 1:59 pm to Mark Makers
If it makes you feel better, my YTD ROE is -30%.
Posted on 8/24/15 at 2:02 pm to cberni1
Thanks all for advice, maybe I'm not in as bad of a situation as I thought then.
Posted on 8/24/15 at 2:08 pm to Mark Makers
quote:
"Your account rate of return from August 22, 2014 until August 21, 2015 is -1.4%."
Now it's really got my interest, as I am sure this is not good and should not be in the red.
Doesn't even matter. Alot of people will be in the red YTD. When you are at your retirement age I can guarantee you that you will not look back and regret that one year that you were in the red. Honestly, be prepared for a few more years on the red especially since you picked more risky investments. Don't even look at that though. All that matters is that the 30+ year trend is positive. With risky investments you are more likely to have a year in the red, but you are also more likely to have a year where you see better returns than others.
Posted on 8/24/15 at 2:09 pm to Mark Makers
-9.7....
Hang in there...itll be ok. Youre still at the starting line of a very long marathon.
Hang in there...itll be ok. Youre still at the starting line of a very long marathon.
Posted on 8/24/15 at 2:19 pm to PhiTiger1764
Why is that funny? I'm 27 max out both, only save 5% for brokerage account but will contribute more as my pay increases.
Posted on 8/24/15 at 2:38 pm to TigerSaint1
quote:
Why is that funny? I'm 27 max out both, only save 5% for brokerage account but will contribute more as my pay increases.
I think he's saying that most 27 year olds don't make enough money to put $23,500 in 401k and Roth IRA and then also save an additional 10% of the salary for a brokerage account on top of that, but the way you stated it made it seem like everyone should be doing that at a minimum.
You are probably talking about the 5% of 27 year olds that can swing that and even that number might be high.
Posted on 8/24/15 at 2:53 pm to Mark Makers
Just think of market downturns in your 20s and 30s as your favorite stocks going on sale. It's an opportunity for you to buy what you normally get at a discount. Load up.
Posted on 8/24/15 at 2:54 pm to nelatf
quote:Wait a second here. Im 27. You want me to give 18,000 to my 401k and then an additional 10% to my IRA? Ok, beans and the 9th ward for me then
Max out 401k and Roth - save 10 percent of paycheck for brokerage account -
This post was edited on 8/24/15 at 2:56 pm
Posted on 8/24/15 at 2:56 pm to TigerSaint1
quote:Congrats on being really rich at 27. Yall all seem to post here on tigerdroppings
Why is that funny? I'm 27 max out both, only save 5% for brokerage account but will contribute more as my pay increases
Posted on 8/24/15 at 3:08 pm to TigerSaint1
quote:
Why is that funny?
It's great advice. But it's funny because it's just an unreasonable standard for almost everyone who is 27. I'm 27 and only know one person my age able to max a 401k alone. And that's not also maxing Roth and 10% to brokerage accounts.
quote:
I'm 27 max out both, only save 5% for brokerage account but will contribute more as my pay increases.
You are the 1%. Again, it's great advice. I was laughing at how it was recommended in such a nonchalant fashion.
Posted on 8/24/15 at 3:44 pm to PhiTiger1764
I have discovered that people think maxing out their 401k means the amount when truly saying they are putting their max contribution rate, unless like you said they are that 1% and just have to post on tigerdroppings to make themselves feel better.
Posted on 8/24/15 at 7:08 pm to AUTigerLSUSaints
I'm in the same boat. 27 and invested about 90% stocks (35% large cap, 35% small cap, 20% non-US) and 10% fixed income in my 401(k). YTD return is -1.84%. Keep investing though. Our time horizon is so long at this point no need to be worried.
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