upschuck
Well-Known Member
It basically is a fund that consist of the stock of the 500 largest companies in the US. Solid and reliable. It stands for Standard & Poors.
I need advice on 401K
- Thread starter Damondogg
- Start date
Man Of Brown
Well-Known Member
Prudential manages the funds for UPSers so you don't choose. You get to choose which mutual fund your contributions go to. It tells you the last months performance, quarter, year, etc. The site I used today actually was teamsterups401kplan.com
Richard Harrow
Deplorable.
I have "a guy".
This is absolutely the way to go. You'll spend some money in the here and now, but poor and otherwise uneducated decisions can potentially cost you tens, if not hundreds of thousands of dollars in the long run.
Man Of Brown
Well-Known Member
I think all new employees are auto enrolled at like 1% and then it goes up automatically by default.
Cementups
Box Monkey
My wife and I have a financial advisor who has never charged us a dime. Most FAs don't make money from their investors. They make money froth companies who they are invested thru. Like referral money.
I just need stuff explained to me face to face. Especially regarding things I'm paranoid about like money.
Cementups
Box Monkey
Do you need a birds and bees talk too? We seem to have a few experts in that field here.
A lot of posters here seemed to have spoken with financial advisors. Or where you talking about b&b's?
The 401k is easy. Put all your money in the low cost index funds, the S&P500, midcap400, the russell2000, and the Bond index. If you want a little more diversification put some in the REIT index (real estate) and international index. If you want to get super simple split your money just between the S&P500 and Bond index. As a rule of thumb use your age as a guide to how much you should have in the Bond Index, ie, if you're 35 you should have 35% of your portfolio in bonds.
Stay out of all the managed funds, they have higher fees and lower returns and their only purpose is to line someone else's pockets with your hard earned cash. If someone tells you to put money in any of the Bright Horizon funds what they're really telling you is that they have no clue what they're talking about and shouldn't be trusted with their own money, much less yours.
Now if you want you can go pay a financial adviser to tell you what I just told you for free.
DriveInDriveOut
Inordinately Right
I'd make sure I had a couple thousands in liquid savings before I worried about contributing to a 401k. A retirement account doesn't do someone living week to week any good if they lose their job. I didn't put anything in the 401k when I was making p/t peanuts and I don't regret it at all, it's not like I missed out on matching contributions.
UpstateNYUPSer(Ret)
Well-Known Member
This is true for the most part. There is a feature of the plan called the Self Managed Account which allows you to buy and sell individual shares of stock.
To the OP----open your 401k and start with a small % (<5%). If it were me I would choose one of the Bright Horizon funds.
What'dyabringmetoday???
Well-Known Member
You need to listen to Upstate only. He is a financial guru. He claims to have squirreled away several thousand dollars over the years.I hope this helps.
Invest immediately. Here are my contributions as recommended by a buddy in the finance field. It's very important to diversify. He's doing very well so I trust his advice:
10% Roth 401k / 3% 401k
Bond Market Index 10%
Balanced 10%
S&P Equity Index 30%
S&P 400 Midcap Index 15%
Russell 2000 20%
International Index 10%
US REIT Index 5%
Be aware the Roth is after taxes. The benefit of the Roth is that it is income tax free when you reach the age requirement. You can also designate a beneficiary, who also receives the money income tax free. In other words, $100k in the Roth 401k is $100k, whereas $100k in the regular 401k will be less after Uncle Sam takes his piece of your pie.
If you find that your contribution is making money tight you can always reduce it (not recommended, adjust your spending habits before you adjust your retirement income), but keep a 3:1 ratio Roth 401k and regular 401k, respectively.
As your pay increases, so should your contributions, especially when approaching the next tax bracket. Eventually, you'll want to max out your contributions.
10% Roth 401k / 3% 401k
Bond Market Index 10%
Balanced 10%
S&P Equity Index 30%
S&P 400 Midcap Index 15%
Russell 2000 20%
International Index 10%
US REIT Index 5%
Be aware the Roth is after taxes. The benefit of the Roth is that it is income tax free when you reach the age requirement. You can also designate a beneficiary, who also receives the money income tax free. In other words, $100k in the Roth 401k is $100k, whereas $100k in the regular 401k will be less after Uncle Sam takes his piece of your pie.
If you find that your contribution is making money tight you can always reduce it (not recommended, adjust your spending habits before you adjust your retirement income), but keep a 3:1 ratio Roth 401k and regular 401k, respectively.
As your pay increases, so should your contributions, especially when approaching the next tax bracket. Eventually, you'll want to max out your contributions.
UpstateNYUPSer(Ret)
Well-Known Member
Keep in mind that the OP is a PTer bringing home $240/week. While I do agree that he should start saving, your suggestion is much too aggressive for him at this point in his career.
The difference will be about $40 a week. I guess the other options would be to do nothing and blow that money, or put it in a savings account while earning < a penny a month in interest while resisting the urge to blow it.
If my plan makes me aggressive, so be it.
UpstateNYUPSer(Ret)
Well-Known Member
$40/week is roughly 17% of his take home. It's a bit too aggressive.
Yeah, just throw 5% in Bright Horizon. Pick any one. Throw a dart and choose whichever it lands on. No mention whether that's 5% Roth or 5% 401k. It doesn't matter.
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