32 and looking to take over

[thundergod]

Hi all! My wife and I just left a meeting with Fidelity last week, and funnily enough that's what brings me here. I was looking for info on whether their PSA services were worth it or not and after reading through some great posts here have decided to steer clear.

A little bit about myself and our retirement savings... I'm married. My wife and I just welcomed our first baby 2 months ago, and I'm looking to start taking a slightly more active role in my retirement account. I've got about 500K combined between my previous company 401k and a new 401k with the current company. The previous company 401k was with Fidelity and I had just stuck the money in a few of their funds (Contra Fund and Freedom 2045 Fund) and let it sit... Of course Fidelity started calling and wants to roll it into an IRA which they manage. The other 401k is with Paychex and all of the funds are currently in a Vanguard 500 Index.

I'm here to meet some new people and learn more about how I should invest the current money and prepare for our retired future.

 

[LongPrime]

Options with Fidelity 401k.
Leave it in the current 401k.
Rollover to Roller IRA, partially or entirely, to Fidelity or to another company.
Move to Paychex 401k.
Rollover to your IRA, partially or entirely.

We held many of Fidelity Funds. Magellan (Lynch era), Contra (about the same time of Lynch), Gold, Dividend, couple of others I forget. Diversified out of Magellan and Contra when they got too big to beat SP500.

As for the advisor service-depends on your need for information and handholding.

 

[racy]

... just left a meeting with Fidelity last week, .... I'm looking to start taking a slightly more active role in my retirement account. ... I had just stuck the money in a few of their funds ....The other 401k is with Paychex and all of the funds are currently in a Vanguard 500 Index....I'm here to learn more about how I should invest the current money and prepare for our retired future.

Hi thunder,
Welcome. To take an active role, you'll want educate yourself on financial planning, risk & asset allocation, how fund costs impact performance, etc. Here's a good place to start learning (upper left hand corner):
Bogleheads Investing Advice and Info
Then, you can figure out what to do with your 401ks.
Good luck!

 

[thundergod]

Thanks for the replies. I had actually just found my way over to the Bogleheads forum by way of a few posts here . I definitely want to take over and not pay Fidelity the $4300+ per year on top of paying their fund management expenses. It seems with as much as they talk about the power of compounding, that extra $4300+ per year be better served in my account over the next 20 or so years.

 

[travelover]

Welcome thunder. You can do it. The dirty little secret is that managing your own investments is not difficult and most people would be ahead just sticking their investments in a low cost target date fund, especially if they have the stomach to just leave it alone in a down turn.

 

[thundergod]

Thanks travelover! I really believe I can after the few hours reading here and at Bogleheads. It is amazing to me how many of these funds under perform compared to the S&P 500. Why would you pay someone to under perform the index which most funds are compared to? Thanks again, and I'll definitely be hanging out as we plan our ER

 

[nash031]

Why would you pay someone to under perform the index which most funds are compared to?

The only reason is ignorance, and that's what many in the financial industry count on to get their hands on your money. Congratulations on seeing the light and taking the first steps! You can definitely do it.

 

[KiraC]

NO!!! DON'T DO IT!!!!

They will just divide up your money into 15 ETF funds (their private funds) and let it sit while they collect huge commissions.

You're better off selecting 15 ETF's across the sectors and managing your money as you want. With ETF's you can get out anytime if there is an emergency or you see the market crashing. With Fidelity, you have to wait until the end of the market day and then see how much you've lost because you waited.

Luckily I foresaw some market issues approaching a few years ago and pulled my money out before they lost too much of it.

Also, the person they assign to your account to manage it is typically barely out of college so zero market experience.

 

[rayinpenn]

1. Buy a couple of low cost index or highly diversified funds vanguard funds are my favorite
2. Add in some IDV. It's an int'l dividend fund
3. Reinvest all dividends
4. Watch your spending
5. Continue to save

DO NOT try to time the market it is a fools game..

 

[rayinpenn]

1. Buy a couple of low cost index or highly diversified funds vanguard funds are my favorite
2. Add in some IDV. It's an int'l dividend fund
3. Reinvest all dividends
4. Watch your spending
5. Continue to save

DO NOT try to time the market it is a fools game..

Oh and call me in 20 years and thank me...

 

[MBAustin]

Good for you, thunder!

If you are looking for some good books, there are several threads here, but the most recent and probably relevant to you is
http://www.early-retirement.org/forums/f30/more-current-personal-finance-books-67419.html

Also check out Scott Burns' AssetBuilder Inc., Registered Investment Advisor - Low Fee Model Portfolios for DFA Funds for his "couch potato" portfolios, which is one way to handle asset allocation.

Happy investing!