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Old 12-29-2008, 04:28 PM
 
28,453 posts, read 73,528,339 times
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Basically every plan that I have every seen has at least TWO ways to rebalance. You can shift around NEW money or shift around existing money. There are lot of researchers who study the overall positives / negatives, but basically all the data I have seen is that unless you are talking REALLY large amounts of money OR really short amounts of time it does not matter.

You don't have to worry about the vested contributions. the plan administrator will have that all figured out behind the scene.

Here is an example:

Say you have a balance of $10,000 and it is got there over a few years. Every year you have been putting 60% into US stocks, 30% into international stock, 5% into bonds and 5% into money market.

You decide you want to SHIFT so that all 6000 in US stocks and 3000 in international is transfered into money market. End of transaction you'd still a total of $10000 but 9500 would be money market. If you decide in a few months (or longer) "hey stocks are looking up" you could shift it back in.

Meanwhile the new money (say $100 a pay check) is still getting split 60/30/5/5 UNLESS you decide to shift that. You COULD shift it to 100% mm orshfit to maybe 60/40 stocks/fixed income or anythink else. As long as you REVISIT on a regular basis (most experts say at least twice a year, but rarely more than once every 60 days) you should be able to shift in/out of the funds that are doing OK.

Data shows that MOST people make mistakes like have TOO MANY funds that all behave about the same, rarely plan for MORE risky things when young and then shift to LESS risky things as they get closer to retirement and GENERALLY do a bad job of hoping that "deoressed" funds will come back. They'd almost always do better getting OUT of bad fund and going to mm OR straight to another fund that is doing better.
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Old 12-31-2008, 07:25 AM
 
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thank you all for your help and advice.
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Old 12-31-2008, 08:14 AM
 
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The matching part is like getting a 50% return on your money. Then take into account the tax deferral you get for 401K and it's pretty much a no brainer to continue. Do you have options of where to invest? If you are concerned of investments just put it into the cash/money market funds and will still get 3-4% appreciation.
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Old 12-31-2008, 09:15 AM
 
Location: San Diego
2,518 posts, read 2,004,713 times
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Quote:
Originally Posted by chet everett View Post
What's a paraplanner?
The college for Financial planning (The CFP) has a designation called a Paraplanner, where you are qualified to develop retirement plans, perform asset allocation analysis and other financial planning activities for clients. The CFP takes two years to complete, a paraplanner can begin immediately if they have experience in the financial services industry. I've worked for three different broker/dealers and my entire professional career has been working with the stock market and people's finances. In some respects it's like a paralegal, but with a bit more control and influence over the business. My other certification allows me to collect consulting fees for my investment advice.
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Old 12-31-2008, 09:36 AM
 
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Thanks, I have not heard that term before.
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Old 06-24-2010, 10:07 AM
 
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think of the employer match as a 50% return on your money. not too shabby. I've done it for 28 years.
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Old 06-24-2010, 11:23 AM
 
77,846 posts, read 76,804,851 times
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with 2 back to back recessions in one decade the markets have quite a bit of catching up to do eventually...... this point in time may be relatively low for the long term..

dont forget 15 years ago we stood in the 4,000's..today thru it all we are in the 10,000's.....

i certainly would keep adding and re-balancing as much as i could.... off in the future you may wish you bet the ranch now..
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Old 06-24-2010, 12:19 PM
 
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You should continue to contribute to 401k with employer matching, and invest it in very conservative category, i.e. income funds, money market funds...etc
And when you leave your job, make sure to roll over this 401K fund to your own IRA account.
Employers all get kickbacks when appointing employee 401K management companies.
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Old 06-24-2010, 12:22 PM
 
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very few folks have the discipline to acually do that..if its not taken out of their check it will never make it into their investments.
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Old 06-24-2010, 12:56 PM
 
Location: Virginia Beach, VA
5,517 posts, read 9,219,281 times
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Quote:
Originally Posted by chet everett View Post
Darrell:

You pretty close to EXACTLY correct. The "free money" part ALONE is worth contributing to get the employer match. Even if that stops (like the weasel at Motorola are doing) you still get to BANK the money and reduce you taxable income, so that is a slam dunk.
Thats a load of crap.

Not are you normally stuck investing in a bunch of worthless funds your company rigs you in to, but the only reason why you are "reducing your taxable income", is because you GET to pay taxes on it later.

For most younger workers, they will likely be in a higher tax bracket when they can pull the money out. That isnt even taking in to account how high of taxes we are going to be paying 40 years from now.

You also are not "banking" anything. The money you put in the 401k is essentially stuck there unless you have a qualifying life event, or you want to pay a boatload of penalties.

There are only a few legit reasons for putting ANY money in a 401k

1. You are in a peak tax bracket of your life time, and you know that for a fact.

2. Your company is giving you a healthy match worth the opportunity cost of locking up your money

3. You are a complete imbecile, cant invest your own money, and need a very convenient sheppard.

If you are not in a peak tax bracket, your company has stopped your match, and you have a little bit of a brain, youd be better off investing your own money, and not paying some ridiculous fees to some fund manager to do it.
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