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Old 11-22-2018, 07:29 AM
6,341 posts, read 4,774,534 times
Reputation: 12998


At 30 years old, it seems you have no knowledge about saving or investing. That is not at all unusual, in fact it is sadly typical. To make the story even sadder, most people don't learn much about personal finances as they age. The schools do not provide any education in these matters and often our parents knew little either.

Asking for help on the internet will be hit or miss with mostly a lot of misses and poor information. I would suggest beginning with some sort of evening classes. You can begin to learn but watch out most of these courses will be taught by someone trying to drum up business. Eventually you will learn enough to seek professional advice and to be able to evaluate that advice. Like many others, I cost myself lots of potential gains by not doing this early enough. You will be greatly rewarded if you spend time on this area even if it is not something you want to do.
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Old 11-25-2018, 04:56 PM
Location: Central Massachusetts
4,800 posts, read 4,864,124 times
Reputation: 6379
Originally Posted by NewbieHere View Post
Just put in the total market, if they donít have it then put in sp&500.
NewbieHere has the Warren Buffet answer. This is the most efficient method and will be better than any of those target date funds. I have a friend whose entire retirement account savings went into a S&P 500 Index fund in 1988. In the last few years he was able to max out to 18.5k a year. His account prior to the most recent drop was 1.1mil and that is just one fund and it is a 401k traditional

Originally Posted by Petunia 100 View Post
I think you should just choose the Target Retirement 2050 Fund. If you want to learn more about what your fund choices are, how to allocate, etc., then go ahead and start learning. Once you know more, you will be in a better position to make a good decision. For now, the Target Retirement fund will do.
I usually tell people that exact same thing. It is the simplest solution.

But if it is possible they should look for the S&P 500 index if one exists in their choices. It is usually no load and low fees. Some of the other choices could contain managed funds. Most of those cannot compete with the S&P for consistent gains.
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Old 11-25-2018, 05:47 PM
Location: Minnesota
95 posts, read 81,472 times
Reputation: 306
Default Bogleheads

Go to bogleheads.com and maybe watch some videos featuring John Bogle the inventor of the index fund. Bogleheads is a wealth of information. If you pick an appropriate target date fund you should be okay. Invest early and often and stay the course. Don't peek for 35 years and you should be very pleasantly surprised.
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Old 11-25-2018, 06:35 PM
Location: SoCal
13,412 posts, read 6,411,220 times
Reputation: 10002
Here is what Bogle says about target fund.

Target funds sometimes are more expensive, and they have international allocations that may not fit your need.
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Old 11-26-2018, 03:55 AM
72,014 posts, read 72,043,164 times
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target date funds load you up on investments based on time instead of what is happening around you and what part of the cycle an asset is in with no regard for your own risk tolerance.

not only do they not take risk tolerance in to the equation there is no standard format for what a fund should hold. it varys from fund family to fund family.

keep in mind there is noooooooooo standard as to how risky a target date should be even if you are at retirement .

the same 2010 target date fund from wells fargo in 2008-2009 lost 11.5% while the t.rowe price 2010 target fund lost 26.5%. that is a target fund that had 2 years to go before retirement. in fact the t.rowe target date fund didn't fall to below 45% equities until 5 years after the target date.

to make things worse after the downfall instead of buying more equities over the next 5 years as good investing tactics would dictate target funds actually shed their holdings further as they reduced down by design the equity side and sold while they really should be buying.

they are quite poor for dollar cost averaging in to , which is exactly how they are utilized . . because markets are up 2/3's of the time and down only 1/3 you are buying fewer and fewer shares as time goes on coupled with them reducing equities as part of their plan. the end result is your own performance will lag the funds intention over time.

any method of investing that uses age or age too an event with disregard for the persons own pucker factor and what is happening in the world around them you can bet will not end well.

my vote is for retirement investing stay away from target funds , concentrate on a portfolio of funds where you have control over what to shed and what to keep as the big picture changes if you choose to

Last edited by mathjak107; 11-26-2018 at 04:35 AM..
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Old 11-27-2018, 01:49 PM
Location: Denver area
157 posts, read 48,939 times
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Various studies have proven that high fees can decimate any retirement plan you are in so watch them like a hawk. Anything over 1% is not good. Index and target date funds and ETF's should run anywhere from around .04-.15% +/- so there's some ballpark fees advice. Of course if this is an employer sponsored thing then you are bound by whatever company they are using. Hopefully their fees are competitive. Vanguard is who I like in my private accounts. Just make sure you're contributing enough to qualify for the match...that's key.

I like S&P and Small Caps funds as others have mentioned. Total market funds have had nice returns too. I do have a target date fund in my Roth that achieves around 7%/yr. which is good enough. At age 30 I wouldn't worry too much about bond funds unless you are really skittish and can't stand the thought of losing during down markets. You have plenty of years to recover from those. I do have 30% in one of my accounts allocated to bonds and Treasuries, but I'm about 7 years from retiring. The past 10 years the markets have been pretty kind, but just recently we have hit some choppy waters. No telling what's coming, but I'm prepared for a little rougher ride next year. Again however, as a 30 year old don't sweat it. Just enjoy buying quality shares at a cheaper price until the next bull runs.

Last edited by TattedCOdude; 11-27-2018 at 02:05 PM..
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Old 11-27-2018, 02:11 PM
72,014 posts, read 72,043,164 times
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most of those studies were from john bogle who built an empire on brainwashing the public that fees were the be all and end all .

funny how once vanguard got in to managing money for investors all of a sudden the grand pappy of do it yourself investing was producing studies that showed not spending the money for professional mgmt cost the typical investor 2-3% a year in gains .

fees matter , but unless they are obscene they are no more important then any of the other dozen or so parameters that determine how you do.

as important or even more more important is when you buy , when you sell ,when you rebalance , how the portfolio construction interacts , tax planning , etc .

i always liken it to the bogle head who buys a car . he pounds the dealer for the lowest price , beats up the finance guy for the lowest terms and then a few years later trades the car in wholesale .

grandma pays a higher price , gets a bit higher financing and sells the car at a better deal privately . in the end grandma won .
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Old 11-27-2018, 03:10 PM
Location: SoCal
13,412 posts, read 6,411,220 times
Reputation: 10002
I know one of my kid’s 401k has target fund with 1% fee. I had TRow Zprice target fund for a while, it did very well, best among all target fund but it’s expensive so I exchanged it to some other funds.
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Old 11-27-2018, 03:59 PM
Location: Denver area
157 posts, read 48,939 times
Reputation: 253
Fees are not the "be all and end all" I'll agree with that...but I'd rather pay a .15% fee vs. a 1.7% fee on two funds tracking the same index. Frontline did a great piece on this very topic. An Economist charted, graphed, spread-sheeted and evaluated his own retirement account and realized over 30 years the fund managers were going to make more off his account than he was (after compounding). By now everybody knows about Buffetts famous bet so it has merit. If you don't like Bogle/Vanguard--Schwab, Fidelity, BlackRock all offer low fees as well.

In any case the OP is likely stuck with whomever his company chose to manage the account and their associated funds and fees so this point may not matter much.

Last edited by TattedCOdude; 11-27-2018 at 04:10 PM..
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Old 11-27-2018, 04:07 PM
72,014 posts, read 72,043,164 times
Reputation: 49585
i will gladly pay the higher fees on my contra fund which i have owned for a long long time , any day
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