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homeboi808 t1_jegbu2f wrote

What funds have you chosen for your 401k?

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lions239 OP t1_jegcsl9 wrote

So here is where I am greatly inexperienced. Online it says my "annualized rate of return" is 0.55% (I believe this was honestly negative last time I checked) & that 100% is in "American Funds 2060 Trgt Date Retire R6"

I have no idea what this means nor do I believe I ever selected anything when I set this up, maybe it was just the default?

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homeboi808 t1_jegelmj wrote

> American Funds 2060 Trgt Date Retire R6

Target date funds have the retirement year in the name (so 2060) and it invests into stocks/bonds/etc. and the more closely the date approaches it changes the allocation more to bonds and less to stocks (just imagine people 1 year out from retirement with everything in stocks and then Covid hit and they lose hundreds of thousands).

It’s a hands-off approach. Because it is more safe, it has less gains than just say a fund tracking the S&P 500, but that’s the price you pay.

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lions239 OP t1_jegj9lc wrote

What's your personal recommendation? Sounds like I'm in the safe bet but S&P 500 might be riskier but with greater returns? Are these the most commonly used options? Is this something I can change easily? If so, would I need to track things closely to see when to change it back and forth? Or once you pick, you pick and it just sits?

I'm willing to put in the time to educate myself using online resources, but do you think I would ever need to entertain consulting or hiring a financial planner?

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homeboi808 t1_jegl3aj wrote

Index funds mostly are damn close to the index they follow. Just Google “S&P 500 price” and change the time-frames and you can see the performance. Besides S&P 500 there is also Total US Market and some others. It depends on what funds are offered, but you should be able to click on the ones available and see their performance and the fees (labeled “expense ratio”, you want this below 1% or even below 0.1%).

You yourself can just transition to bonds (should also be in the list of offerings) as you get older.

> Is this something I can change easily?

For mine, I can transfer 20%/yr from one fund to another (but I can change future contributions with no limit), the limit isn’t something I knew it just was a pop-up message when I went to do it. Meaning if I have everything in A and want to fully tradition to B, it would take 5 years. But yours may be different options.

You can also contact whoever is in charge of your retirement.

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