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oldhat

American Funds

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OLDHAT,

 

With so many choices that might be a tough question for anyone to answer simply.

 

I would divide your contributions into:

 

Large Cap Growth and value

Mid cap Growth and Value (some say you don't need this category if you have small cap funds)

Small cap-Growth and value

International (large and small cap 50/50

Bonds, both domestic and international. According to Bogle always have your age in Bonds

Tips

Cash

 

A target retirement fund might make good sense. Vanguard's are top rated.

 

From my experience don't start becoming a mutual fund collector. Keep your funds to ten or less.

 

Invest in 403b, Roth, and taxable accounts (use tax managed accounts)

 

Groundswell and others might have more specific recommendations.

 

 

And of course.....Keep your costs as low as possible!!

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My advisor told me to hold off on starting a Roth IRA until the value of my 403(b) is equal my 3-6 month cash savings safety cushion. Sounds right?

 

What's Tips?

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This should explain What Tips are. They are recommended as part of your bond allocation by many of the great

investment minds. I have a 50% Bond(domestic and international) 50% TIPS

 

 

https://personal.vanguard.com/us/FundsSnaps...;FundIntExt=INT

 

 

 

In my opinion a Roth should be the first thing you fund but opinions vary and so do individual circumstances.

 

 

 

Here is a link again. If it won't open go to the vanguard site and look up Inflation protected securities also Known as TIPS

 

https://personal.vanguard.com/us/FundsSnaps...;FundIntExt=INT

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In my opinion a Roth should be the first thing you fund but opinions vary and so do individual circumstances.

 

 

I'll second that statement. Why not first put your money in a place of your choosing without employer/plan complications? That's the way I look at it.

 

 

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I'll "third" that statement and suggest nuking all 4xx plans in favor of an IRA with much higher contribution limits.

 

 

Not yet ready to throw in the towel. The 457b plan is promising, but that promise needs to come to fuition within the next 5 years and if it does NOT, yes I will agree to "nuking all 4xx plans." Use the Roth IRA.

 

Why? As we having for saying for years, Vanguard, TIAA CREF and Fidelity are not available on most SD benefit plans and the rest of the vendors are too expensive. In order for the tax deferred feature work to its potential, the costs must be less than 1%. If higher than 1% total ER, that powerful benefit is no longer exists. It becomes more of a benefit to the company and their agent.

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My advisor told me to hold off on starting a Roth IRA until the value of my 403(b) is equal my 3-6 month cash savings safety cushion. Sounds right?

 

 

No it doesn't. Having your "cash savings safety cushion" in a 403b plan makes no sense.

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My advisor told me to hold off on starting a Roth IRA until the value of my 403(b) is equal my 3-6 month cash savings safety cushion. Sounds right?

 

 

No it doesn't. Having your "cash savings safety cushion" in a 403b plan makes no sense.

 

She meant don't start putting money into your Roth IRA until you have, arbitrarily, $5000 in cash and $5000 in the 403(b). Only then start contributing to a Roth IRA.

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I'll "third" that statement and suggest nuking all 4xx plans in favor of an IRA with much higher contribution limits.

 

 

I have to wonder why this hasn't happened yet. It makes total sense. No one I know is happy the way 401K and 403b plans take advantage of their participants. Let us be our own administrators. Let us decide for ourselves how much we are willing to pay for our investments.

 

My advisor told me to hold off on starting a Roth IRA until the value of my 403(b) is equal my 3-6 month cash savings safety cushion. Sounds right?

 

 

No it doesn't. Having your "cash savings safety cushion" in a 403b plan makes no sense.

 

She meant don't start putting money into your Roth IRA until you have, arbitrarily, $5000 in cash and $5000 in the 403(b). Only then start contributing to a Roth IRA.

 

 

I still don't understand her logic

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Oldhat,

 

No Expert, and you may have already got this going on, but why not put first 5k in roth if you still have extra cash for retirement then use the 403b.

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I still don't understand her logic

 

It didn't make much sense to me as a rookie, either.

She might be missing out on her cut. Roth IRA with a VG, TIAA CREF or similar no load, low expense fund does not pay her.

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