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 Investing and 401K
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Choila_sukutikoachar
Posted on 03-15-15 7:49 PM     Reply [Subscribe]
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So, mero company offers me certain percentage of match on 401K. So, I thought let me open one finally after 3 yrs. While I have been investing on Vanguard Institutional Index-Inst Plus (42.09%), Vanguard Total bond market index Inst (11.26%) and JpMc retirement 2050-C (46.65%). I have no idea what I'm doing and if I am doing it right and how this thing works :(

Any advice would be really appreciated.
 
Posted on 03-16-15 6:59 AM     [Snapshot: 147]     Reply [Subscribe]
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Their projection never works: Price depends on market.
It's good to have retirement fund and tax free now.
 
Posted on 03-16-15 7:19 AM     [Snapshot: 156]     Reply [Subscribe]
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If I were you, I'd put in the max that they'd match or the max you can safely afford to, whichever is lower. Roll over to one of vanguard's index funds when you part with the company.
 
Posted on 03-16-15 7:44 AM     [Snapshot: 183]     Reply [Subscribe]
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Hello Choila

First of all, it's very highly recommended that you, at the minimum, contribute the maximum that your employer will match. So if they match, say 3 %, then contribute at least 3%.
How much more you want to contribute depends upon your future plans. I could recommend more if you tell me your plans and when (and where) you plan to retire.

401k also has max limit (I believe for 2014 it is 18k). You might want to consider other vehicles for retirement savings such as IRA (your contributions/earnings will be pre-tax) or Roth IRA (contributions will be post-tax and earnings won't be taxed). Remember though, if you withdraw your 401k, IRA or Roth IRA prematurely, you will be penalized. 401k and IRA will tax you and then impose around 10% penalty if you withdraw before you turn 59.5 (you might want to check this number). Roth will not penalize you and will only tax your earnings if you withdraw before maturity.

Now how to allocate also depends upon your goals. If you aren't certain, Vanguard offers age-indexed funds (like 35, 45 yrs) - the longer you have the more allocation in equities (stocks) than bonds/mutual-funds.
The best way to invest for long is to diversify. Currency devaluation is a big concern, as is market condition. So, you don't just want to invest in various sector within US, but might want to include some portfolios from Euro, Asia and emerging markets. This will hedge you against inflation and currency fluctuations.
 
Choila_sukutikoachar
Posted on 03-16-15 7:49 PM     [Snapshot: 356]     Reply [Subscribe]
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Thanks kiddo.

I'm basically looking to buy a house in tri-state/ east coast in a year and two, make some extra funds and reserve some funds when i retire. I'm currently 30. My understanding was you can take loan from your 401k as primary homeowner. So, i'm planning to do that.

Like a lot of millennials, I'm also a bit concerned about where my money is going and if I will actually get MY money when i retire. What if I will have a bunch of stocks and funds which have no value then 😳...
That's why trying to find a relatively safe investing way. Also, I want to be aggressive and take risks, not much, maybe a thousand. Can you suggest?

Cheers!
 


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