401k help

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jen25w
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401k help

Post by jen25w »

Hello I just started my 401k with a company called PlanMember. The total annual fees are around 1.48% annually. My husband and I are new to investing but he’s been reading a listen to John Bogles audiobooks a lot and decided he wants me to roll over my 401k so we can pick out what stocks we want in it and manage it ourselves. I am very uncomfortable with this. Do I want to pay a lot of fees for someone to manage my 401k, no BUT I’m not comfortable doing to alone, no matter what Bogle says. Thoughts?
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retired@50
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Re: 401k help

Post by retired@50 »

Have you seen the 401k wiki page section that deals with expensive or mediocre choices in a plan?

Link: https://www.bogleheads.org/wiki/401(k)# ... re_choices

Even though the costs are high, sometimes these fees are offset by employer matching contributions.

Depending on your ability to influence management, or desire to, you could also consider this link about campaigning for a better 401k plan.

Link: https://www.bogleheads.org/wiki/How_to_ ... 01(k)_plan

You might want to begin rather cautiously so as to not become the "squeaky wheel".

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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jen25w
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Re: 401k help

Post by jen25w »

Hello thank you for your reply. I am in a solo 401K. I own my own 1-person company. Does this change your previous thoughts at all? Thanks!
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jen25w
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Re: 401k help

Post by jen25w »

Hello thank you for your reply. I am in a solo 401K. I own my own 1-person company. Does this change your previous thoughts at all? Thanks!
wetgear
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Re: 401k help

Post by wetgear »

Is Planmember your employer, your employers 401k administrator, or something else?

What 401k (previous employer or current employer) are you considering rolling over?

What type of account are you considering rolling it into?

Are the 1.48% fees just account fees in general or are they expense ratios? Why do you say around 1.48%?

For better and more complete advice consider posting more details in this format: viewtopic.php?f=1&t=6212
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retired@50
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Re: 401k help

Post by retired@50 »

jen25w wrote: Thu Jun 17, 2021 5:49 pm Hello thank you for your reply. I am in a solo 401K. I own my own 1-person company. Does this change your previous thoughts at all? Thanks!
It sure does. I see that you have some pretty strong influence in the C-suite. :happy

Can't you move your solo 401k to Vanguard, Fidelity, or Schwab?

See link: https://investor.vanguard.com/small-bus ... -solo-401k

I simply cannot imagine that Vanguard would charge as much as you're paying (1.48%).

I suspect you can decide to move your 401k plan to a new custodian, but since I've never been self employed, I wouldn't know how to do it. If it's not clear from your research and reading, then ask the forum something like 'What are the rules about moving a solo 401k?"

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
wetgear
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Re: 401k help

Post by wetgear »

jen25w wrote: Thu Jun 17, 2021 5:49 pm Hello thank you for your reply. I am in a solo 401K. I own my own 1-person company. Does this change your previous thoughts at all? Thanks!
In that case find a different company to hold your solo 401k, those fees are too expensive at Planmember, its not worth it.

Fidelity seems to have a low cost option for you. Note I haven't done much homework on this front and there may be better/other options but this link seems promising: https://www.fidelity.com/retirement-ira ... k/overview
Topic Author
jen25w
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Re: 401k help

Post by jen25w »

Thank you both for your assistance. I have a Charles Schwab account and was considering them or Fidelity, BUT again I am not comfortable picking my own mutual funds or ETFS and would prefer someone else manage it. I don't trust myself to choose the correct funds and would prefer someone who specializes in the area do it.
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ruralavalon
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Re: 401k help

Post by ruralavalon »

jen25w wrote: Thu Jun 17, 2021 5:49 pm Hello thank you for your reply. I am in a solo 401K. I own my own 1-person company. Does this change your previous thoughts at all? Thanks!
Switch to a low cost provider like Vanguard, E*Trade, Fidelity or Schwab. They all offer individual (solo) 401k plans. What features do you want in your plan? Do you want a plan which permits Roth contributions?

College Investor (6/8/2021) "Comparing The Most Popular Solo 401k Options", link.

White Coat Investor (1/3/2014), "Where to Open Your Solo 401K", link.
Last edited by ruralavalon on Thu Jun 17, 2021 6:10 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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retired@50
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Re: 401k help

Post by retired@50 »

jen25w wrote: Thu Jun 17, 2021 6:03 pm Thank you both for your assistance. I have a Charles Schwab account and was considering them or Fidelity, BUT again I am not comfortable picking my own mutual funds or ETFS and would prefer someone else manage it. I don't trust myself to choose the correct funds and would prefer someone who specializes in the area do it.
Look into target date retirement funds.

They are the perfect all-in-one solution for investors who aren't sure.

Just make sure you use a target date INDEX fund that has a low expense ratio, of around .15% or .10% or somewhere in that ballpark.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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ruralavalon
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Re: 401k help

Post by ruralavalon »

jen25w wrote: Thu Jun 17, 2021 6:03 pm Thank you both for your assistance. I have a Charles Schwab account and was considering them or Fidelity, BUT again I am not comfortable picking my own mutual funds or ETFS and would prefer someone else manage it. I don't trust myself to choose the correct funds and would prefer someone who specializes in the area do it.
You can use a target date fund, a simple allocation fund, or a balanced fund. You can use a single fund that is very diversified (to reduce your risk), and a very low expense ratio (to increase your net returns).

Examples, depending on the company used:
Vanguard Target Retirement (20xx) funds;
Vanguard LifeStrategy funds
Vanguard Balanced Index Fund;
Fidelity Freedom Index (20xx) funds;
Schwab Target (20xx) funds; or
BlackRock iShares Core Allocation ETFs.

Just pick one fund.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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retired@50
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Re: 401k help

Post by retired@50 »

jen25w wrote: Thu Jun 17, 2021 6:03 pm Thank you both for your assistance. I have a Charles Schwab account and was considering them or Fidelity, BUT again I am not comfortable picking my own mutual funds or ETFS and would prefer someone else manage it. I don't trust myself to choose the correct funds and would prefer someone who specializes in the area do it.
I'm not sure we've overcome your fears and uncertainty with the information posted thus far...???

If we haven't, then please let the forum know what magic you think someone else possesses in this area?

One of the most common Bogle quotes is that "Nobody knows nothing", or words to that effect.

In my opinion, you have to take charge of your own future, and I believe that anyone who is smart enough to be self-employed is also smart enough to do some reading and settle on a simple plan that will help achieve your financial goals.

See link: https://www.bogleheads.org/wiki/Books:_ ... nd_reviews

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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jen25w
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Re: 401k help

Post by jen25w »

I appreciate your opinion and the vote of confidence to take charge of my own retirement. Some people love doing their own investing, I do not. I have a very difficult time understanding investing concepts and it is overwhelming to me.

There are so many choices or methods of investing that I freeze and am unable to make decisions because I’m afraid I’ll make a mistake. It’s so difficult for me that I can’t even decide if I should choose a 401k from Vanguard, Fidelity or Schwab. I’ve read about them all but still can’t make a choice. Everyone excels in certain things and everyone also struggles at other things, no matter how much they attempt to learn about it. This is MY struggle.

I don’t want to feel overwhelmed anymore. I would like a 401K that I know what to add to it from day one, without doing a ton of research, because it’s overwhelming, that I won’t need to buy different funds for. Something I only need to add money to make it grow.
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Beensabu
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Re: 401k help

Post by Beensabu »

Planmember has high expense ratio funds and charges a ~2% AUM fee on top of those when I checked a few years ago. I had to talk someone I care about into making a move away from them. They "trusted the people who knew what they were doing". I had to diiiiiiiiiiig to find the actual fees. They do not want you to know.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
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retired@50
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Re: 401k help

Post by retired@50 »

jen25w wrote: Thu Jun 17, 2021 8:47 pm I appreciate your opinion and the vote of confidence to take charge of my own retirement. Some people love doing their own investing, I do not. I have a very difficult time understanding investing concepts and it is overwhelming to me.

There are so many choices or methods of investing that I freeze and am unable to make decisions because I’m afraid I’ll make a mistake. It’s so difficult for me that I can’t even decide if I should choose a 401k from Vanguard, Fidelity or Schwab. I’ve read about them all but still can’t make a choice. Everyone excels in certain things and everyone also struggles at other things, no matter how much they attempt to learn about it. This is MY struggle.

I don’t want to feel overwhelmed anymore. I would like a 401K that I know what to add to it from day one, without doing a ton of research, because it’s overwhelming, that I won’t need to buy different funds for. Something I only need to add money to make it grow.
In my opinion, an investor such as yourself should definitely use Vanguard.
This is because they are most consistently on the side of the investor.

Fidelity and Schwab both have low-cost funds, but they make you work to find them on their website, and they also tend to offer or try to entice people into expensive funds or financial arrangements that often aren't in an investor's best interest. Being naive at one of these institutions can cost you dearly. Since you're not likely to do enough reading to know when you're being "played", it's probably best to stay away.

Vanguard doesn't play this way. While they do offer an advisory service, it's offered at a low price, and finding a low-expense ratio index fund on Vanguard is a breeze. They're not hiding them in the back store-room.

Finally, as far as what fund to buy into inside your 401k plan, here's the simplest advice I can offer.
Add 65 to your birth year. (e.g. 1995 + 65 = 2060).
Then, using the result, go find the Vanguard target date retirement fund with the closest year in the title.
Like the Vanguard Target Retirement 2060 Fund. https://investor.vanguard.com/mutual-fu ... file/VTTSX

The beauty of these target retirement funds from Vanguard is that they are globally diversified, including both stocks and bonds, and they have an age-appropriate asset allocation that adjusts as you get older. So the riskiness of the portfolio is never way out of line with how old you are. They are literally a fund you can hold for the rest of your life. Simply add money in the years you are working, and withdraw money during your retirement. It's that simple.

I wish you well.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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ruralavalon
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Re: 401k help

Post by ruralavalon »

jen25w wrote: Thu Jun 17, 2021 8:47 pm I appreciate your opinion and the vote of confidence to take charge of my own retirement. Some people love doing their own investing, I do not. I have a very difficult time understanding investing concepts and it is overwhelming to me.

There are so many choices or methods of investing that I freeze and am unable to make decisions because I’m afraid I’ll make a mistake. It’s so difficult for me that I can’t even decide if I should choose a 401k from Vanguard, Fidelity or Schwab. I’ve read about them all but still can’t make a choice. Everyone excels in certain things and everyone also struggles at other things, no matter how much they attempt to learn about it. This is MY struggle.

I don’t want to feel overwhelmed anymore. I would like a 401K that I know what to add to it from day one, without doing a ton of research, because it’s overwhelming, that I won’t need to buy different funds for. Something I only need to add money to make it grow.
To start use is a single target date fund or other allocation fund. Then all you have to do is make regular contributions.

I suggest reading one or two books on investing. This is easy to learn. This is definitely not rocket science. It's just takes a little time and very little effort. Do this and you won't feel overwhelmed anymore.

Wiki article Books: recommendations and reviews.

For a start consider "How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn", by Allan Roth, link.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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