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I have my retirement plans in American Funds 2060 target date stock
Posted on 3/2/20 at 8:28 pm
Posted on 3/2/20 at 8:28 pm
Am I an idiot? I’m 25 so I have 40 years before I retire but is this a dumb move early on or is it fine?
10
Posted on 3/2/20 at 8:31 pm to jlovel7
No, you aren’t an idiot.
Posted on 3/2/20 at 8:37 pm to jlovel7
The most common knocks against target date funds is that the fees are too high and they are too conservative.
But if I were giving advice to someone who truly wanted a set it and forget it retirement plan, you could do worse than picking your retirement date, adding ten years, and piling money into that fund for the next half century.
But if I were giving advice to someone who truly wanted a set it and forget it retirement plan, you could do worse than picking your retirement date, adding ten years, and piling money into that fund for the next half century.
Posted on 3/2/20 at 8:39 pm to jlovel7
Do that until you’re 30 and then reassess. At your age it’s about the amount you’re saving not what exact fund (generally speaking)
Posted on 3/2/20 at 8:49 pm to jlovel7
quote:
Am I an idiot? I’m 25 so I have 40 years before I retire but is this a dumb move early on or is it fine?
That fund has an expense ratio of 0.78% which is high. Do you have other options from Vanguard etc in your 401k?
Posted on 3/2/20 at 9:34 pm to gpburdell
As far as I know I have any American funds traded stock at my disposal. Beyond that I’m
Unsure. Would this be outside of that?
Unsure. Would this be outside of that?
Posted on 3/2/20 at 9:41 pm to jlovel7
First, it is never idiotic to save for retirement. EVER. Second, you are very near diving into learning expense ratios.
Third, you could perform the reset yourself and average an expense ratio of %0.04-%0.07 per year.
Third, you could perform the reset yourself and average an expense ratio of %0.04-%0.07 per year.
Posted on 3/2/20 at 10:03 pm to Junky
quote:Well since it's a 401k, his options may not be great.
Third, you could perform the reset yourself and average an expense ratio of %0.04-%0.07 per year.
Posted on 3/2/20 at 10:12 pm to jlovel7
Not dumb, just not as aggressive as I would be at 25. I would be in something with higher growth potential.
Posted on 3/3/20 at 8:05 am to jlovel7
Not idiotic at all. But what other funds or fund families are available to you?
Posted on 3/3/20 at 9:09 am to jlovel7
to keep it simple for YOUR situation at YOUR AGE and experience levels
If you know nothing else about real estate, stocks, bonds, futures/commodities, etc
put it in a growth index fund
IF AVAILABLE. yeah GTFO that target date fund.
why are you in american funds? please do not tell me you use EJ. Is this through work? what is available then we can help you.
If you know nothing else about real estate, stocks, bonds, futures/commodities, etc
put it in a growth index fund
IF AVAILABLE. yeah GTFO that target date fund.
why are you in american funds? please do not tell me you use EJ. Is this through work? what is available then we can help you.
Posted on 3/3/20 at 9:09 am to Jag_Warrior
quote:
But what other funds or fund families are available to you?
yeah we need to know this
Posted on 3/3/20 at 9:32 am to jlovel7
Do you have index fund or are they based on cap size and international? My 401k put me in a target date fund for the year I turn 65. I think it is standard practice and then you can allocate accordingly.
Go all in on equity.
Go all in on equity.
Posted on 3/3/20 at 10:02 am to yatesdog38
American Funds charges high fees in most of their funds. Stick to Schwab, Fidelity, or Vanguard funds as a simple rule.
Posted on 3/3/20 at 10:07 am to lynxcat
This is a 401k. Expense ratios and historical performance not fees are gonna be what you need to pay attention to.
Posted on 3/3/20 at 10:12 am to yatesdog38
I was grouping expense ratio into “fees” but, yes, agreed.
Posted on 3/3/20 at 10:40 am to jlovel7
I would advise researching some ETFs or low fee mutual funds (Vanguard is always popular depending on what your program offers).
At 25 years old, IMHO, you should be 100% in equities. More than likely, your target fund has some bond allocation which is pretty worthless for you. Target funds also have higher expense ratios which will cumulatively reduce your return over the long run.
Look for low fee growth funds, S&P ETFs, etc.
Many funds and ETFs in the same categories will have similar 10 year track records. I always use expense ratio as the deciding factor.
At 25 years old, IMHO, you should be 100% in equities. More than likely, your target fund has some bond allocation which is pretty worthless for you. Target funds also have higher expense ratios which will cumulatively reduce your return over the long run.
Look for low fee growth funds, S&P ETFs, etc.
Many funds and ETFs in the same categories will have similar 10 year track records. I always use expense ratio as the deciding factor.
This post was edited on 3/3/20 at 10:42 am
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