Author Topic: Fidelity Investments  (Read 3030 times)

Greenroller

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Fidelity Investments
« on: March 13, 2016, 11:31:59 AM »
Hello, I would love some help. I have several accounts with Fidelity as that is who my current  employer uses. I rolled over my last employers 401K into them as well ( as a rollover IRA)to keep things simple. I now have 3 separate accounts in Fidelity. A

401A with $11,401.73  FID Freedom K Income 100%

401K with $9,526.00 TRP Retire 2045 R 100%

Rollover IRA with $119,854.33  CORE/FFFGX/FSGDX equally

I want a hands off approach to these. I am not well versed in reallocating/rebalancing,etc.  Can anyone suggest where I can put this money and leave it to work for me best over the next 10-15 years while avoiding the higher fee options?  I obviously cannot roll all of these into one large account as Fedelity has made that clear to me. So whats your best suggestion for someone like me who wants to set it and forget it? Thank you all, I feel better asking you all than the Fidelity people.

MDM

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Re: Fidelity Investments
« Reply #1 on: March 13, 2016, 12:15:59 PM »
Assuming you have access to any Fidelity fund, something such as Fidelity Freedom Index 2055 (FDEWX) might work.

See http://thefinancebuff.com/fidelity-freedom-index-funds.html and https://www.bogleheads.org/forum/viewtopic.php?t=167147.

Frankies Girl

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Re: Fidelity Investments
« Reply #2 on: March 13, 2016, 12:21:17 PM »
You can stay with Fido and be just fine. I have all my accounts with them and I'm happy with the service. I use their Spartan series of funds, which match up pretty closely with Vanguard's index fund series, and in some cases beat their expense ratios (rare, but they use the Spartan series as a loss leader to get you in the door... they'd like you to invest with other funds as well, but they'll give the same service no matter what you're invested in).

The main thing is to find a lazy/couch potato portfolio that you can basically set up with super low expense ratios and forget about for a few decades. So you're going to want index funds, and you're going to want to focus on Spartan (see the bogleheads link below for the Vanguard/Fido comparison funds). Your current funds look to be target date retirement funds that hold a mix of equities and bonds and that will automatically rebalance for you as you get closer to retirement date. But you're paying extra to have them rebalance for you. It may be worth it to you and the expense ratios are not insanely high - but learning a bit about how that works could make you feel even more comfortable about investing in general and save you a bit of change in the long run. Nothing wrong with a decent target date fund tho. ;)

That being said, no you can't combine all accounts into one master account, but you should be able to convert any old 401ks into rollover IRAs and if you hold all your portfolio in the same place like Fido, you'll be able to see the big picture easily from their website interface.

Your current employer's 401k is stuck with the selections available, but by turning the older ones into IRAs, you gain the ability to invest in any fund currently traded.

There are a few reasons not to convert a 401K to an IRA: you live in a state that offers an higher level of protection for 401Ks against judgements/lawsuits (like California) that IRAs do not have; you are able to access institutional shares or have a deep discount on other shares through your 401K that would not be available in an IRA.

Reasons to definitely consider rolling: you will be charged a management fee for staying in the former company's 401K group; and the main reason - you are no longer restricted to the small pool of fund choices the 401K plan administrator chose for that company. Most cases, it is a good idea to roll, but do be aware of the first part (lawsuit protection and institutional shares) just in case those are a concern for you. ;)

But it sounds like you might need to decide on an investor policy statement first, then figure out your asset allocation for your whole portfolio, and then change up your investments to match.

https://www.bogleheads.org/wiki/Investment_policy_statement
https://www.bogleheads.org/wiki/Asset_allocation_in_multiple_accounts
https://www.bogleheads.org/wiki/Fidelity
https://www.bogleheads.org/wiki/Tax-efficient_fund_placement

As far as rebalancing, I really only look at my accounts for this purpose once a year. If it falls more than 5% out of balance, I'll sell off the high growth fund and buy the slower one. Under 5% change is left alone. I have a simple excel sheet to calculate the numbers/percentage for me if I am feeling extra lazy. Easy.

I have a 3 fund portfolio across many accounts (traditional IRA, rollover IRA, inherited IRA, taxable account and spouse's accounts). I am FIREd, and I'm also fine with high volatility for higher growth. You will need to figure out for yourself what works for you for now, but here is my current AA for an example:

80% Fidelity Spartan Total Market Index Fund (FSTVX)
10% Fidelity Spartan U.S. Bond Index Fund (FSITX)
8%   Fidelity Spartan Real Estate Index Fund (FSRVX)
~2% Cash (emergency fund/1-2 years' expenses)


And finally, if you haven't read Jim Collins' stock series, do try it. It is a highly entertaining read overall, but you'll come through it understanding a bit more than basic investing and it should make you feel much more confident and capable. I owe my understanding and currently knowledge to his excellent writing/explanations.
http://jlcollinsnh.com/stock-series/

« Last Edit: March 13, 2016, 12:23:02 PM by Frankies Girl »

Greenroller

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Re: Fidelity Investments
« Reply #3 on: March 13, 2016, 01:42:55 PM »
Thank you so much for your thorough answer!