Stable Value Fund

[ripper1]

I wonder how many here have stable value funds in their tax privileged accounts? What role can they play today's environment? I currently have 72% of my cash reserve or bond side of my portfolio in this earning 2.9%.

 

[pb4uski]

2.9% is a very attractive rate... a keeper for sure. I wish I had access to a stable value fund.

 

[Retireby45ish]

Never heard of one of these. How do some 401s offer it? What’s the risk for getting 2.9%?

 

[euro]

I wonder how many here have stable value funds in their tax privileged accounts? What role can they play today's environment? I currently have 72% of my cash reserve or bond side of my portfolio in this earning 2.9%.

Yes, it's really nice when you have these available. In fact, it is one of only a few reasons I can think of to leave your money with your employer's 401k (instead of rolling it into an IRA) when you retire.
I'm lucky to have access to a stable value fund for my deferred compensation accounts (mine has been paying 3.0% for several years now).

 

[OldGrady]

My 401k also has a Stable Value fund. I’ll get 2.75% with little, if no risk. Been in it 15 years, it’s been a fairly stable fund. Lol

 

[neihn]

My 401k also has Stable Fund with 3% return year after year. One of the reason that I leave my 401k with Megacorp.

 

[Spock]

Most of my assets are in the Stable Value fund at megacorp 401k, gets about 3.05%.
Given the wrap contracts/insurance company counter party risk I moved 1/3 of out to an IRA so I didn't have everything in one basket.

 

[MikeTN]

TIAA traditional is a stable value fund

I have money in TIAA traditional, with a 3% min. guarantee, recently paying a bit more. However, I don't think new money is paying that much. Over the long run this fund has returned about as much as an intermediate term Treasury fund. Unlike a bond fund, the assets do not change in value (bond funds have appreciated a lot in the last decades.) So it looks good now, and the stable value of principal is nice, but the total return has not exceeded most bond funds given that interest rates have fallen so much.

 

[scrabbler1]

When I was still working, my employer's 401k had a SV fund. In fact, when they switched Plan administrators, they always made sure to get the new Plan admin to create one like whatever we had before. My employer also picked up any expense fees.


I always had about 50% of my money in the SV fund, excluding the ESOP which came along later and wasn't combined with the regular 401k until my last few years with them. In the late 1980s, it was paying around 9% but slowly dropped to about 4.5% by the time I left in late 2008. I'd say ~3% would be pretty reasonable these days.

 

[Spanky]

Have been putting a sizable amount into a stable value paying about 2 - 3% in the 401K plan over the years. Took some money out earlier this year to invest in the vanguard international fund - bad mistake.

 

[Dtail]

Currently getting a net 3.5% in my Stable Value. Wish I knew more about the value of it while working, as would have transferred much more of my rollover IRA into the 401k.
Currently it accounts for 25% of our portfolio.
The 401k also has low cost Vanguard funds, so most of my portfolio which already is mostly in tax deferred would have been in the 401k.
My rate changes in June though and I expect it to be lowered.

 

[Winemaker]

I keep three years of withdrawals in my SVF, about 50% of my expenses. Oh, I remember the days when it paid 17.75% for 6 years or so back in the '80's.

 

[jollystomper]

One of the reasons I chose to keep my 401K and not move to an IRA was to keep access to the stable value fund. I have been tracking the return since 2007 and its average annual return has never been less that 3.05%. I suspect it may dip this year, but still it is part of my "sleep well at night" strategy.

My 401K classifies it as a bond allocation, so it is where 90% of my bond allocation resides.

 

[jazz4cash]

SVF is a hallmark of an employee friendly 401k.
My older 401k had an excellent SVF for many years averaging 4% or so. Just as I was transitioning to RE and really needed the SVF, it dropped down to 1.5%. That's when I started doing rollovers to the credit union CD specials. The SVF has only recovered to ~2% so I am jealous of all of you with the great SVF rates. My other 401k did not have SVF for many years but recently added two options. A good alternative is the Target Income Fund which has some risk and better return than out SVF. Availability of the SVF along with other features is why I'll probably keep the Mega 401k alive.

 

[Lakewood90712]

I have keep a lot of 457 and 401 money in stable value funds. Risk is not zero . Looking at the rates over the last 15 years, the rates go down a lt when the fed floods the market with cheap money, like is happening as we breathe.