Last time I checked ours were lower than vanguard across the board. Vanguard is an excellent choice for index funds in an IRA, no doubt about it, but it's not a better choice than our 401k.
enrolling in 401k
- Thread starter Nomad
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I use the Vanguard Divided growers and Divenend appreciation funds. They have both done very well.
Catatonic
Nine Lives
Management is much better!
Gabba
It's a vicious cycle
don't know what to pick, huh? you're so young so might as well go all in stocks. go 25% in each of s&p 500 equity index fund, s&p 400 midcap index fund, russell 2000 index fund, and international index fund. 401k vs roth 401k vs aftertax 401k? ok so you can contribute up to 35% combined of each paycheck to 401k and roth 401k. and that caps out at $18,000 a year. the after tax 401k you can do up to 5% and i can't remember what the yearly cap is but it's so high you can't hit it so it doesn't matter. what matters is that they have different tax advantages. plain 401k contributions reduce the tax you pay on your paycheck, but you pay tax on it later when you retire. roth you pay with money after taxes are deducted but once you retire all the money is yours and like the government can't even see it let alone tax it. so to get the max benefit one has to finesse which one they use when. as a rule of thumb when you're young and don't have kids or a mortgage, the plain 401k is more advantageous, but then when you have kids and are paying off a house loan, the roth is better. so if you're not going to do the math make about 1/3 of your contributions in the roth flavor and 2/3 in the regular flavor.
and how much should you contribute? well since you're not likely to have any other better investment options (especially if you have to ask) 35% or 18,000 (plus 5% to the after tax dealie) is the most right answer. short of that: as much as you can afford to. the more the better, especially when you're young because the contributions you make now will be the ones with the most time to grow. far better to contribute alot when you're young and taper off as you get to retirement than wait till retirement is near to make big contributions.
just as a reference point, my dad contributed the max to his 401k every year he worked and now that he's retired that's now over 2 million dollars. and that's on top of his social security benefits and my mom has her pension and her own 401k money.
and how much should you contribute? well since you're not likely to have any other better investment options (especially if you have to ask) 35% or 18,000 (plus 5% to the after tax dealie) is the most right answer. short of that: as much as you can afford to. the more the better, especially when you're young because the contributions you make now will be the ones with the most time to grow. far better to contribute alot when you're young and taper off as you get to retirement than wait till retirement is near to make big contributions.
just as a reference point, my dad contributed the max to his 401k every year he worked and now that he's retired that's now over 2 million dollars. and that's on top of his social security benefits and my mom has her pension and her own 401k money.
Just save
flatbread
Occasional Lurker
Just as a starting point, you could go "age in bonds." You're 22, so 78% stocks, 22% bonds. Vary that by 10% towards stocks if you wish (88/12). Check once or twice a year to rebalance to your age. Or just put it all in Bright Horizon to your expected retirement year and let it diversify among the funds for you.
But the others above saying that saving is more important are correct at least at your age. Get funds in there now. I started at age 22. I'm now 32. The funds I've put in since have about doubled. That will be an even bigger difference in the final balance down the road.
Book recommendation: The Bogleheads' Guide to Investing.
But the others above saying that saving is more important are correct at least at your age. Get funds in there now. I started at age 22. I'm now 32. The funds I've put in since have about doubled. That will be an even bigger difference in the final balance down the road.
Book recommendation: The Bogleheads' Guide to Investing.
CoolStoryBro
Well-Known Member
the mutual funds in our teamster 401k are atrocious.
The bny mellon s&p 500 index fund has a 28 basis point custodial fee and 75 basis point transaction fee. Not great but ok. Our 401k sucks.
I quite like warren buffet's suggested allocation to normal people. 90% in s&p. 10% in bonds. However i would not hold those bonds in a crappy mutual fund in our crappy 401k plan. Personal accounts and ira's sre better in my opinion
The bny mellon s&p 500 index fund has a 28 basis point custodial fee and 75 basis point transaction fee. Not great but ok. Our 401k sucks.
I quite like warren buffet's suggested allocation to normal people. 90% in s&p. 10% in bonds. However i would not hold those bonds in a crappy mutual fund in our crappy 401k plan. Personal accounts and ira's sre better in my opinion
CoolStoryBro
Well-Known Member
Vanguard has a 17 basis point fee. Our s&p has a 28 basis point fee
CoolStoryBro
Well-Known Member
Th
That number displayed in the 401k site is bogus. You have to dig deep into the prospectus to discover the 0.28% custodial fee (yearly). And 0.75% transaction fee (buy or sell). Our funds suck. Vanguard via IRA is way better
That number displayed in the 401k site is bogus. You have to dig deep into the prospectus to discover the 0.28% custodial fee (yearly). And 0.75% transaction fee (buy or sell). Our funds suck. Vanguard via IRA is way better
CoolStoryBro
Well-Known Member
Our s&p 500 index fun is run by BNY mellon
CoolStoryBro
Well-Known Member
I
Ours suck compared to Vanguard. The fee's displayed on the site are BS. You have to read the prospectus to discover the true fund fee's.
Remember, the 401k plan has fee's. Then the fund's themselves have additional fees.
Ours suck compared to Vanguard. The fee's displayed on the site are BS. You have to read the prospectus to discover the true fund fee's.
Remember, the 401k plan has fee's. Then the fund's themselves have additional fees.
That is incorrect.
upschuck
Well-Known Member
Cool story, Bro
flatbread
Occasional Lurker
I'm reading the fact sheet for the S&P 500 fund. It says “Investment Fee 0.75 bps” and “Custody Fee 0.28 bps.” A single basis point is 0.01% Where are you seeing 0.75% and 0.28%?
1989
Well-Known Member
When the Fed raised 25 bps. It's .25 or a quarter percent.
flatbread
Occasional Lurker
Right. The rates I quoted had decimal points. So 0.28 basis points is 0.0028%. 0.75 basis points is 0.0075%.
flatbread
Occasional Lurker
I have my pre-UPS Roth IRA in Vanguard funds VTIAX, VTSAX, and VGSIX. Bond side is in traditional TSP (federal gov't version of 401(k)). No complaints.
My Vanguard funds all have done well, with the exception of the precious metals and mining fund.
DriveInDriѵeOut
Inordinately Right
WDFD
Silence
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