Better late than never, I guess.
I'm not even sure where to start on my first post here. My DH and I are both not financially savvy folks. The truth is we just have never taken the time to focus on retirement and have had our heads in the sand about getting educated about and developing a sound plan to get us to a secure retirement. I'd like to relay a bunch of excuses on why we wasted so many years w/out a plan, but the truth is that there really are no good excuses. We are both 48 and employed with megacorps. Two kiddos - one a sophomore in college and the other a highschool freshman.
Back in 2008, when the stock market took a huge nosedive, I did something really stupid - I moved the majority of my holdings in my 401K (with Vanguard) into Cash Reserves - after the market hit an all time low. That has been the one and only move I've made with my 401K in the 26 years I've had it. I haven't done anything since I moved it into Cash Reserves five years ago, missing out on the huge market gains since I sold at the bottom.
Now I want to learn about investing and develop a retirement plan and stumbled upon this site as well as a few others. I am highly motivated to figure out a plan. Over the last few weeks I've been reading, trying to learn the lingo (holy moly there is alot of lingo!) and absorb. I went to the library this week and borrowed Millionare Teacher and think I understand the basics:
- LBYM
- Invest in low fee index funds (both stock and bond index funds).
- Don't fall into the buy high/sell low emotionally driven idiotic investing like I did in the past!
- Rebalance at regular intervals
So, while a have a ton of questions, I'll start with just this one. HOW/(When?) do I go about getting back into the market?
Here are my current 401K funds:
$204K in Vanguard Prime Money Market Fund
$23K Vanguard Dodge and Cox Stock Fund
$30K Vanguard Institutional Index Fund Institutional Plus Shares
$8K Vanguard PRIMECAP Fund Admiral Shares
$13K Company stock
Total: $277K (rounded)
Do I just research low fee index funds available within my vanguard 401K options, call up Vanguard and move all the money into the funds (plan will be to do 60% stock index - 40% US, 20% international) and 40% bond index fund) at one time? With the market up like it is now? (I know, I know, you can't time the market). Do I just move $20K at a time over the next year? (Isn't that like dollar cost averaging?)
Not sure if the answer to the question is dependent on any other factors? I need to do the same with my DH's account. He hasn't made changes to his account in years, and has no idea if the funds he is in are low fee or the right funds. He is basically relying on me to figure this out and then explain it to him and he'll make the changes.
My DH has a 401K with Fidelity with $240K in the following funds:
$9K in Blended Funds Investment Target 2030 Fund
$61K in S&P 500 Equity Index
$111K in Domestic Bond Index
$7K in Actively Managed Large Cap Eq Fund
$32K Fixed Income Fund
$19K in Company Stock
This is all so confusing. Outside or our (substantial) mortgage (owe about $310K), we are debt free - no CCs, car payments, etc. We do have about $300K+ in home equity, but have minimal (~$20K) in 529 plans for the kiddos. We've been paying as we go for older DS' college, but it is hard. He has been told he will have to commute to local university for last two years to decrease costs and is ok with that. We have depleted, significantly, our emergency cash fund to pay for college. I don't track our monthly costs (that is also something I am starting to do as part of my new retirement planning!), but figure we only have about 4 months of cash available if things went south so my primary focus over the next 6 months is to rebuild that by lowering my 401K contributions to just the company match (6%) versus the current 10% allocation. Will ask DH to do the same.
We have no IRAs or any other savings/investments.
Anyway, thanks in advance for any thoughts on best approach to moving forward with an actual PLAN for retirement and how to fix my Vanguard 401K.
I hate working, so a plan is desperately needed!
I'm not even sure where to start on my first post here. My DH and I are both not financially savvy folks. The truth is we just have never taken the time to focus on retirement and have had our heads in the sand about getting educated about and developing a sound plan to get us to a secure retirement. I'd like to relay a bunch of excuses on why we wasted so many years w/out a plan, but the truth is that there really are no good excuses. We are both 48 and employed with megacorps. Two kiddos - one a sophomore in college and the other a highschool freshman.
Back in 2008, when the stock market took a huge nosedive, I did something really stupid - I moved the majority of my holdings in my 401K (with Vanguard) into Cash Reserves - after the market hit an all time low. That has been the one and only move I've made with my 401K in the 26 years I've had it. I haven't done anything since I moved it into Cash Reserves five years ago, missing out on the huge market gains since I sold at the bottom.
Now I want to learn about investing and develop a retirement plan and stumbled upon this site as well as a few others. I am highly motivated to figure out a plan. Over the last few weeks I've been reading, trying to learn the lingo (holy moly there is alot of lingo!) and absorb. I went to the library this week and borrowed Millionare Teacher and think I understand the basics:
- LBYM
- Invest in low fee index funds (both stock and bond index funds).
- Don't fall into the buy high/sell low emotionally driven idiotic investing like I did in the past!
- Rebalance at regular intervals
So, while a have a ton of questions, I'll start with just this one. HOW/(When?) do I go about getting back into the market?
Here are my current 401K funds:
$204K in Vanguard Prime Money Market Fund
$23K Vanguard Dodge and Cox Stock Fund
$30K Vanguard Institutional Index Fund Institutional Plus Shares
$8K Vanguard PRIMECAP Fund Admiral Shares
$13K Company stock
Total: $277K (rounded)
Do I just research low fee index funds available within my vanguard 401K options, call up Vanguard and move all the money into the funds (plan will be to do 60% stock index - 40% US, 20% international) and 40% bond index fund) at one time? With the market up like it is now? (I know, I know, you can't time the market). Do I just move $20K at a time over the next year? (Isn't that like dollar cost averaging?)
Not sure if the answer to the question is dependent on any other factors? I need to do the same with my DH's account. He hasn't made changes to his account in years, and has no idea if the funds he is in are low fee or the right funds. He is basically relying on me to figure this out and then explain it to him and he'll make the changes.
My DH has a 401K with Fidelity with $240K in the following funds:
$9K in Blended Funds Investment Target 2030 Fund
$61K in S&P 500 Equity Index
$111K in Domestic Bond Index
$7K in Actively Managed Large Cap Eq Fund
$32K Fixed Income Fund
$19K in Company Stock
This is all so confusing. Outside or our (substantial) mortgage (owe about $310K), we are debt free - no CCs, car payments, etc. We do have about $300K+ in home equity, but have minimal (~$20K) in 529 plans for the kiddos. We've been paying as we go for older DS' college, but it is hard. He has been told he will have to commute to local university for last two years to decrease costs and is ok with that. We have depleted, significantly, our emergency cash fund to pay for college. I don't track our monthly costs (that is also something I am starting to do as part of my new retirement planning!), but figure we only have about 4 months of cash available if things went south so my primary focus over the next 6 months is to rebuild that by lowering my 401K contributions to just the company match (6%) versus the current 10% allocation. Will ask DH to do the same.
We have no IRAs or any other savings/investments.
Anyway, thanks in advance for any thoughts on best approach to moving forward with an actual PLAN for retirement and how to fix my Vanguard 401K.
I hate working, so a plan is desperately needed!