Author Topic: Company 401k  (Read 2234 times)

stevefrederick5906

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Company 401k
« on: March 24, 2016, 10:48:21 AM »
Im just starting to apply some of the principles ive found here and had a question about my 401k.  I currently have 11k in it and signed up to have the company that runs it allocate my investments.  From what ive read here index funds are recommended. Should I cancel letting them run it, and pour it all into a vanguard fund?

thek1d

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Re: Company 401k
« Reply #1 on: March 24, 2016, 10:54:40 AM »
Chances are the funds they are using have high fees. If so, definitely consider low cost index funds. My employer recently switched their 401k administrator to Vanguard. The prior administrator was terrible in terms of options, fees and user friendliness. Big fan of Vanguard.

NoStacheOhio

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Re: Company 401k
« Reply #2 on: March 24, 2016, 11:20:36 AM »
It depends on you personally, but canceling management is probably the best call.

If you haven't yet, read this: http://jlcollinsnh.com/stock-series/

Do you know what fund options are available in your plan? Not everyone has Vanguard, but many times you'll be able to find a comparable choice.

Trip

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Re: Company 401k
« Reply #3 on: March 24, 2016, 11:34:53 AM »
You will likely find a lot of support for switching to index funds around here. It is very difficult to beat the market for an extended period of time, but the one area that you can control is your fees. Index funds typically have the lowest fees and keeping those fees low could mean the thousands of dollars difference or more in the long run.

georgicus

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Re: Company 401k
« Reply #4 on: March 26, 2016, 03:27:14 AM »
Ditto that.

Most smaller company 401k plans have a bunch of crappy funds (i.e., high management fees), with a few index funds buried/hidden in the list that are lower cost.  If this is your situation, job #1 is to crawl through the list of funds and find the one or two relative gems.

With 11k, what you want to do is pick the cheapest SP500 or "total stock market" fund with the lowest management fee and stick all your money in that fund.

(With that balance, I am assuming that you've got 20+ years to go before needing the money.  There's really no point in diversifying beyond stocks until you are within 10 years of FIRE.)

 

Wow, a phone plan for fifteen bucks!