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Question about 401k
Posted on 8/26/14 at 12:23 pm
Posted on 8/26/14 at 12:23 pm
My wife is currently contributing to her 401k for the maximum that her current company will allow. Every time her money and the company's matching money is placed into the 401k it automatically goes toward the companies stock. There is no way to change how the initial incoming money is allocated.
Wells Fargo is who they do it through, and at the top of the website it says that the incoming monies will always be allocated towards the company stock, and you can diversify the money to other investments afterwards. Would this not set her up at a disadvantage to reallocate money on a different day when other funds prices could be higher?
Wells Fargo is who they do it through, and at the top of the website it says that the incoming monies will always be allocated towards the company stock, and you can diversify the money to other investments afterwards. Would this not set her up at a disadvantage to reallocate money on a different day when other funds prices could be higher?
Posted on 8/26/14 at 12:42 pm to STB
In short no if you re-allocate regularly.
If you do it lump sum then you have a chance of bad timing or good timing.
If you do it regularly (bi-weekly or monthly) then it should not matter because you are dollar cost averaging over the long term.
If you do it lump sum then you have a chance of bad timing or good timing.
If you do it regularly (bi-weekly or monthly) then it should not matter because you are dollar cost averaging over the long term.
Posted on 8/26/14 at 3:13 pm to STB
Something is not adding up. I cannot imagine her company could mandate that 401k contributions go toward company stock. Have you confirmed this with a quick phone call to Wells Fargo?
I may very well be wrong, but what you described just doesn't sound right.
I may very well be wrong, but what you described just doesn't sound right.
Posted on 8/26/14 at 3:15 pm to STB
quote:
Wells Fargo is who they do it through, and at the top of the website it says that the incoming monies will always be allocated towards the company stock
My thought is that this may continue with "unless you direct us otherwise", but that note is not explicit, at least in what you are viewing.
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