Author Topic: Is it best to use my company 401k?  (Read 6209 times)

blackjack

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Is it best to use my company 401k?
« on: October 27, 2013, 07:32:11 PM »
I work at UPS and they offer the teamsters Prudential Roth 401k plan( https://www.retirement.prudential.com/cws/teamsterups/ ).. They dont offer any matching...
I'm not sure if I should just use them or set up something with vanguard 401k. Or i thought about setting up 401k via work, then setting up a IRA through vanguard..
thoughts?.

Rebecca Stapler

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Re: Is it best to use my company 401k?
« Reply #1 on: October 27, 2013, 07:37:01 PM »
I think the answer depends on your tax bracket, your investment strategy and tolerance, the investments available through your 401(k), your age, and how much you would like to invest.

Eg, max contribution to a Roth IRA is $5,500 this year, and less if you earn in a certain income bracket.
Eg, if your 401(k) doesn't have a highly rated, low expense ratio fund that meets your investment strategy, then you probably want to open an IRA where you can invest your $$ how you want.
Etc.

blackjack

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Re: Is it best to use my company 401k?
« Reply #2 on: October 27, 2013, 07:40:19 PM »
I have much to learn...I think I might see a vangaurd adviser in my area. Ideally he could set up my 401k, IRA and maybe some index funds with let over cash.

« Last Edit: October 27, 2013, 07:42:59 PM by blackjack »

Rebecca Stapler

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Re: Is it best to use my company 401k?
« Reply #3 on: October 27, 2013, 07:49:17 PM »
I have much to learn...I think I might see a vangaurd adviser in my area. Ideally he could set up my 401k, IRA and maybe some index funds with let over cash.

Your IRA can be comprised of index funds -- mine is! That's the best part of IRA's: That you can choose your own adventure ;)

ETA: I love Vanguard's funds, but I've never worked with an advisor there. I would like to think that they're as good as their funds, but I tend to be suspicious of anyone selling me anything. If you can do some research on your own, you might feel less in the dark about it all. I really liked Andrew Tobias's "The Only Investment Guide You'll Ever Need." Shortlink: http://ow.ly/qe4qH
« Last Edit: October 27, 2013, 07:52:37 PM by stan »

curler

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Re: Is it best to use my company 401k?
« Reply #4 on: October 27, 2013, 09:03:52 PM »
Hi Blackjack, just to clarify one thing, generally 401(k)s can only be set up through your employer.  So unless your employer sponsors a 401(k) with Vanguard, you can't get one through them.  You can, however, set up an IRA with them.

superannuationfreak

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Re: Is it best to use my company 401k?
« Reply #5 on: October 28, 2013, 12:46:22 AM »
Glancing very quickly at that plan it seems to have some incredibly low cost index funds available: http://www3.prudential.com/email/retirement/IMFPWeb/cws/teamsterups/0212325-00003-00.pdf

S&P 500 for 1.28 bps (that's 0.0128%), International for 6.28bps, etc.  Nothing too fancy but all the basic tools needed at even lower costs than Vanguard, it looks like.

blackjack

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Re: Is it best to use my company 401k?
« Reply #6 on: October 28, 2013, 05:43:46 AM »
Thanx! I'm currently 29 y/o and want to retire by age 40-45 (no later than 50!)
So ideally id get the work prudential 401k and index funds and maybe set up an IRA with vanguard.?
« Last Edit: October 28, 2013, 05:45:28 AM by blackjack »

On_a_slow_boat

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Re: Is it best to use my company 401k?
« Reply #7 on: October 28, 2013, 10:26:49 AM »
Overall i agree with the previous posters:

 I see quite a few positives in signing up.

1) ability to put away 17,500  this year in either pre tax or roth money

2) some very low cost funds to invest in.

With the size of this plan and its bargaining power - There will be a lot of pressure on Prudential as the DC plan administrator to supply good service and a mix of managed funds and low cost index funds. This is UPS / Teamsters- a great client to have for them.

So I would use the tax advantages in #1 above in a way that best suits your needs and take advantage of some pretty good low cost investment options and sign up for the plan.



blackjack

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Re: Is it best to use my company 401k?
« Reply #8 on: October 28, 2013, 11:13:40 AM »
thanx so I invest in the 401k and get some index funds?
I cant invest to much because i'm going to save hard cash(saving for home) but I just want to start my 401k and wouldnt mind getting some index funds such as US large cap s&p 500 equity index fund
« Last Edit: October 28, 2013, 12:49:43 PM by blackjack »

aj_yooper

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Re: Is it best to use my company 401k?
« Reply #9 on: October 28, 2013, 12:01:22 PM »
If you plan to retire in the same tax bracket you are currently in, I would recommend a Roth 401k, if they have one.  If not, I would do the Roth IRA and then put my retirement money in a taxable account and don't disturb it at all.  If you are in a higher tax bracket than you will have when you retire, a traditional 401k is helpful as it transports your money from a higher tax time (now) to your retirement tax time.  YMMV

curler

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Re: Is it best to use my company 401k?
« Reply #10 on: October 28, 2013, 12:48:06 PM »
From the plan website, it looks like they do offer a Roth 401(k).  They also do have a ~$25 annual fee, so that is another 25bps on a $10,000 balance.  But still, overall, looks like a good place to have a retirement account.

blackjack

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Re: Is it best to use my company 401k?
« Reply #11 on: October 28, 2013, 12:50:35 PM »
thanks for the help everyone

blackjack

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Re: Is it best to use my company 401k?
« Reply #12 on: November 03, 2013, 05:52:28 PM »
I signed up for my 401k today I picked the (employee pre tax) Traditional 401k via prudential... I"ll slowly work up to maxing it out

S&P 500 EQUITY INDEX FUND Added Large Cap Stock - Blend 25 %
 S&P 400 MIDCAP INDEX FUND Added Mid Cap Stock - Blend 25 %
 RUSSELL 2000 INDEX FUND Added Small Cap Stock - Blend 25 %
 INTERNATIONAL INDEX FUND - Blend 25 %

Eventually I will open a ROTH IRA and max that out.

thoughts?