ProspectiveBum
Full time employment: Posting here.
Greetings! I've been lurking here for some time, and have learned a tremendous amount from the members of this board. More than anything, I've learned is that I'm not as close to ER as I'd originally thought. 
I'm 34, and DW is 38, and we have 2 small kids. We both work, and are fortunate to earn very good salaries. I have $200K in 2 401k accounts, and DW has $165K. We have about $90K currently sitting in high-yield savings accounts, and no non-mortgage debt. We have around $500K in equity in our home, though I've had to re-adjust my thinking there, because we'll likely be in this house at least until our kids are grown and on their own. We live in an expensive area of Southern California, and probably wouldn't be able to extract a significant amount of equity without leaving the area, which we'd rather not do.
Given all of the above, we'll probably need to significantly alter our spending habits if we both want to retire early. Neither of us are extravagant spenders, but we don't really have a household budget. We just pay our expenses each month, and sock the rest into savings. I know we can do a lot better with some concrete goals and planning.
I'm sure I'll have lots more questions as we get further along in our planning, but my initial question is with regard to my 401k accounts. I have accounts from 2 previous employers. I've recently started a new job, and will soon be eligible to participate in my new employer's 401k. The new employer offers accounts with 2 firms: Fidelity and American Funds. What's odd to me is that the AF funds are load funds(2%). Apparently the load has something to do with the amount of money the company's 401k. The 401k rep spent some time selling me on the American Funds accounts, but I'm having a hard time getting past the load aspect of them. Am I wrong to be so hesitant? If they truly will outperform the Fidelity accounts (and he indicates they have historically, though past performance is no guarantee of future performance, yadda yadda yadda), I could get past the fees. I could also just roll the existing accounts into Fidelity funds just to avoid the $4k load hit, and then try the American Funds with my new payroll contributions. Obviously, no one can predict the future, but can anyone give me any input or advice? Is it realistic to think that the AF funds would outperform Fidelity funds, even with the load factored in? I realize that I'm probably being far too general (no details on the specific funds), but I'm curious is anyone has personal experience with American Funds. I hadn't heard of them before joining this company, but have found quotes here from folks that seem to find them reputable...
Thanks in advance for any insight or opinions!
I'm 34, and DW is 38, and we have 2 small kids. We both work, and are fortunate to earn very good salaries. I have $200K in 2 401k accounts, and DW has $165K. We have about $90K currently sitting in high-yield savings accounts, and no non-mortgage debt. We have around $500K in equity in our home, though I've had to re-adjust my thinking there, because we'll likely be in this house at least until our kids are grown and on their own. We live in an expensive area of Southern California, and probably wouldn't be able to extract a significant amount of equity without leaving the area, which we'd rather not do.
Given all of the above, we'll probably need to significantly alter our spending habits if we both want to retire early. Neither of us are extravagant spenders, but we don't really have a household budget. We just pay our expenses each month, and sock the rest into savings. I know we can do a lot better with some concrete goals and planning.
I'm sure I'll have lots more questions as we get further along in our planning, but my initial question is with regard to my 401k accounts. I have accounts from 2 previous employers. I've recently started a new job, and will soon be eligible to participate in my new employer's 401k. The new employer offers accounts with 2 firms: Fidelity and American Funds. What's odd to me is that the AF funds are load funds(2%). Apparently the load has something to do with the amount of money the company's 401k. The 401k rep spent some time selling me on the American Funds accounts, but I'm having a hard time getting past the load aspect of them. Am I wrong to be so hesitant? If they truly will outperform the Fidelity accounts (and he indicates they have historically, though past performance is no guarantee of future performance, yadda yadda yadda), I could get past the fees. I could also just roll the existing accounts into Fidelity funds just to avoid the $4k load hit, and then try the American Funds with my new payroll contributions. Obviously, no one can predict the future, but can anyone give me any input or advice? Is it realistic to think that the AF funds would outperform Fidelity funds, even with the load factored in? I realize that I'm probably being far too general (no details on the specific funds), but I'm curious is anyone has personal experience with American Funds. I hadn't heard of them before joining this company, but have found quotes here from folks that seem to find them reputable...
Thanks in advance for any insight or opinions!
