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401k and Retirement Choices
Luinmac
Registered User regular
Registered User regular
Pic related, it's where my current company-matched retirement fund is being placed. I'm in my early 20's, working for a good company with a generous match on 401k plans...
But, due to the recent economy issues, and future issues to come in our deteriorating society, which of these plans is least "touched" by the government? I mean, which will just hold the money... persay? If I could, I'd put my money in my matress, but companies don't match those deposits...
Anyway, for those of you with Wachovia retirement plans, or ones with similar services to these, I'd really appreciate your advice on this. I've looked through the explanations for these plans and I'm not really understanding them to their fullest...
Luinmac on
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I don't think Wachovia matters, as your current funds are being administered by Vanguard (the company I work for uses them as well). Are you worried the government will seize your 401(k) or something? Or that it will deteriorate in value? If it's the former, we'd have bigger problems if that started happening. If it's the latter, 401(k) funds are not guaranteed to grow, so if you're concerned it may be best to contribute only up to what the company will match.
Based on what I have read and heard from financial planners, the index funds really are the best bet for long term growth. If you look at the prospectus for your Vanguard fund right now, you'd probably see it starts out as all index funds and then shifts to bonds or something similar as you get closer to the target year.
If you're worried that your money will lose value, and want to put it in something ultra-stable, you should consider opening a self-directed account. Most 401K programs allow that, so you'd have an account with Ameritrade or something. If you do that, you can buy gov't bonds or even buy nothing, I suppose.
I understand retirement funds lose and gain, I just want to be sure that there wasn't a smarter choice to be transferring my 401k into until things get better, if they do.
I was also told about an IRA Roth? What are these, and do I have them as an option with Wachovia/Vanguard?
Expect it to go up and down with the economy, but you aren't planning on retiring for another 36 years (at least) so I wouldn't worry too much about it. Remember, when an employee matches that is basically free money. If the markets go down, you aren't actually losing money that you contributed until you get past the amount that your employer matched.
Matching is the best thing ever, and everyone should take advantage of it to it's full extent, especially in today's climate.
No, for someone your age a retirement fund is probably one of the better places to have money, you're essentially an accumulator in that retirement isn't in your near future so you are in the process of building wealth. Even if things go down, thanks to matching you will still be ahead. If you have concerns with this kind of thing you should call a financial advisor and they will set you straight.
Yes.
That page lists pretty much everything you need to know about Roth IRAs.
Seconded. In economic terms, consider this: My company will match 50% of my contributions up to 6%, plus another 0.5% base. So if I contribute 6%, I get 9.5%, an automatic 100% no-risk guaranteed 58% return on investment. There is no other investment in the world that can offer you those terms.
So if your company has any kind of matching, got for it to the full extent. You probably won't miss whatever percent is being taken out.
I don't know if your company only offers what is listed, but if you are wanting to diversify your contributions you'll need to get in touch with your benefits department and/or Vanguard.
I'll have to look into that...
And yes, the booze/hookers need to be funded! :P
Company matching 75% of 6% salary. I'm putting in 6% at the moment (just moved out on my own, need to guage what I can afford at the moment.)
I like the Target Funds but have a bit in the World Fund too, so I can live on the edge.
As to your question above: Wachovia is administering it for you but the funds are actually controlled by Vanguard.
The closest one to cash is "Evgrn Money Market/I". If you put it in there, it won't lose anything, but you'll get a shit rate of return (1-2.5%).