yeppeuntwofive t1_jefraw4 wrote on March 31, 2023 at 6:08 PM

Hi everyone, have a few questions!

I’m completely new to the 401k and IRA stuff.

I have a 401k with my employer that I match with and invest in Vanguard Target Date Fund 2060 on Fidelity. I’m most likely going to stick with TDF for all of my accounts as I want to set it and forget it. I want to set up a Roth IRA via Fidelity as well. Should I do the invest for the same exact TDF I am with my 401k or is it ok to invest in different TDF on my Roth IRA? The vanguard 2060 has a minimum investment and high fees for a Roth IRA so idk if it’s worth!

Milkmanism t1_jeg6obx wrote on March 31, 2023 at 7:50 PM

Yeah, it's fine to invest in a different TDF. Just be careful with Fidelity to pick a TDF that has "index" in the title as they also have actively managed TDFs with much higher expense ratios. FDKLX should be what you're looking for.

yeppeuntwofive t1_jeh3ypp wrote on March 31, 2023 at 11:47 PM

Ok perfect! That’s good to know that, I was worried if it would be weird to invest in two different TDFs

Raspyy t1_jeg6y92 wrote on March 31, 2023 at 7:52 PM

I think TDFs are fine. Some like to manage their own portfolio and tweak it to be more aggressive or more passive. It may save you a tiny bit on the expense ratios if you do it yourself.

sciguyCO t1_jeg9b1i wrote on March 31, 2023 at 8:07 PM

I do find it odd that a 401k plan managed through Fidelity is offering Vanguard's funds. Most bigger brokerages stick with just their own "in house" funds. Could just be something with your particular employer's plan.

But for a personal IRA, while you might be able to buy Vanguard's TDF in a Fidelity IRA, Fidelity is going to charge extra for it, usually through transaction fees. You can bypass those by just sticking with the "Fidelity Freedom Index 2060", their version of a target date fund. But make sure you get the "Index" version, they have an actively managed TDF with a higher expense ratio.

While they're issued by different brokerages, there is very little practical difference between a target date fund through Fidelity and one with Vanguard. Almost all TDFs follow pretty similar guidelines around asset mix vs. time. So a 2060 "Fidelity Freedom Index Fund" won't be too different from Vanguard 2060 "Target Retirement Fund".

yeppeuntwofive t1_jeh3v7b wrote on March 31, 2023 at 11:46 PM

Yeah, it was weird that the only TDF that my employer 401k had was just Vanguards even though it’s managed by Fidelity. But thank you so much for the input! Didn’t know about the fees so that’s nice to know, going to follow your advice with doing a different TDF for my Roth IRA! So the Fidelity Freedom Index Fund 2060 is FDKLX, correct? Just want to make sure!