Author Topic: Retirement account questions  (Read 2295 times)

lschrader

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Retirement account questions
« on: November 04, 2016, 01:11:50 PM »
Hi everyone,

My husband has a 401k account (Prudential) and I will be starting a 403b account (TIAA Cref) in January. Right now he only contributes the minimum (5% and company match 1.5%). My job will contribute 11% even if I contribute nothing. Husband is not really interested in finances so when he first started at the job he let the person pick his allocation. I have a meeting set up to meet with a TIAA rep but I want to go in with more knowledge (I'm trying to read through as many MMM posts as I can). How do I pick my investments? Will this person have my best interest or am I better off not even meeting with her? Should I have my husband change his investments or should we have different ones? As someone new to investing I feel so overwhelmed and behind for not starting sooner. My parents are okay with money but will work until 60s-70s...their advice was just to meet with a rep and do what they suggest. My in laws are terrible with money and can't really provide guidance either.

Additional details:
Me: age 25
Husband: age 29
Recently purchased foreclosed home, cash-flowing all repairs, and currently working on building emergency fund/cutting spending before seriously increasing investing. I also started recently tracking our spending so we are actually seeing where our money goes.

Thank you!

Heroes821

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Re: Retirement account questions
« Reply #1 on: November 04, 2016, 01:34:49 PM »
Well Ischrader,

Welcome to the forum. Just discovering MMM puts you miles ahead of your peers.  Absorb what you can here, learn slowly.  You don't need to know everything all at once.  You have plenty of time. 

That being said from an MMM point of view know your spending habits before trying to cap your retirement accounts.

robartsd

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Re: Retirement account questions
« Reply #2 on: November 04, 2016, 01:56:22 PM »
If you post a list of funds available in your accounts (include ticker symbol, fund name, and expense ratio if you can), people will comment on which are likely the best. Basically the recommendation is to go for the broadest, lowest cost, stock market index fund. Vanguard Total Stock Market Index Fund (VTSAX, VTSMX, and VTI) basically sets the standard to compare other stock market funds to. You absolutely do not want high-cost, actively-managed funds or loaded (commission paid to salespeople) funds.

Hopefully the default fund in your husband's 401(k) was a target date type fund based on his age (this would be the best choice for most people who do not take the time to choose an allocation for themselves). These typically hold a stock market index fund and a bond market index fund (often a domestic and an international version of each) and adjust the ratio to be more conservative (more bonds) as they approach the target date. You can generally accomplish the same thing at lower cost by holding the constituent funds directly and taking a few minutes to re-balance your portfolio occasionally (lots of people do this once a year).

lschrader

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Re: Retirement account questions
« Reply #3 on: November 04, 2016, 02:33:05 PM »
Thank you robartsd! I will see if I can get that information and post more details.

robartsd

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Re: Retirement account questions
« Reply #4 on: November 04, 2016, 03:40:48 PM »
If you want to give yourself an more in-depth education on investing in stocks, this series of blog posts is highly recommended.

MDM

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Re: Retirement account questions
« Reply #5 on: November 04, 2016, 08:59:11 PM »

Choices

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Re: Retirement account questions
« Reply #6 on: November 04, 2016, 10:14:52 PM »
A Simple Path to Wealth by JL Collins is also very helpful in explaining index fund investing to beginners. It's a quick read with lots of examples that should help with many of the main issues.
Best of luck.