I'm going through the 401k packet that I received from my employer (via Wachovia), and I'm curious as to whether I should participate in the managed account (AdviceTrack, as they call it), or just manage it on my own. Besides knowing that I should diversify, I have no idea whatsoever how to properly manage an account like this (although I'm sure it could be learned).

AdviceTrack charges a small fee (between 1% and 1.4% of the account balance, I believe), and it essentially creates a portfolio that is suited for me based on age, estimated years to retirement, salary, etc. (redistributing funds every quarter if necessary). Does anyone do anything like this via their employer? If so, is it worth it or am I best off learning on my own?

11/1/2005 11:29:07 PM

i would do it on your own and keep the 1%

11/1/2005 11:30:17 PM

Does your employer match your 401k contributions? If they don't, you'd be better off with an IRA. As for the managed account, you'd probably be better off managing your own money and imitating the portfolio they would give you. You have the advantage of being young. You have plenty of time to recover from any mistakes you make. I would put most of my money in an ETF or mutual fund that tracks the S&P index.

[Edited on November 1, 2005 at 11:33 PM. Reason : ?]

11/1/2005 11:32:02 PM

^ah yes, forgot to add that in. Yes, my employer does match my 401k contributions. Thanks for reminding me about that tidbit.

11/1/2005 11:34:35 PM

most companies nowadays at least match a small % - i've got 6

11/1/2005 11:37:57 PM

i've got 200%

11/1/2005 11:48:32 PM

200% matching up to what %

11/1/2005 11:55:21 PM

NCSUAli, 90% of your return comes from how you allocate between stocks & bonds, domestic & international, large and small cap - not what you specifically invest in. I would not recommend paying for AdviceTrack. Those fees come out whether or not you make money in a given year, and will seriously erode your returns.

1) Determine risk tolerance.
2) Determine your % ratios
3) Start investing. If you've got two funds to choose from with a similar style, watch the expenses!!
4) Rebalance once every 6 months or year

For my employer, we have the Fidelity Freedom funds with the target retirement dates for those that don't want to create their own portfolios. Then we've got Ayco Answerline as our free resource for financial questions

11/2/2005 7:13:07 AM

This thread confuses me. I don't know what any of these words mean.

11/2/2005 7:19:58 AM

10.5%!

11/2/2005 9:03:01 AM

I hope Wachovia has a better selection of funds than my employer.

Ours are abysmal.

11/2/2005 9:33:14 AM

If I contribute enough towards retirement, can I collect welfare?

11/2/2005 6:10:11 PM

everyone - how much do your employeers contribute towards your 401-k??


mine does .50 per dollar matching up to 3%...doesn't seem that good.

what do you guys get?

11/2/2005 7:10:31 PM

100% matching upto I believe 6% for me.

no yours isn't that good. mines not in a 401k tho. its pretax stock purchases

11/2/2005 7:18:44 PM

$0.50 per dollar up to 4%, however, that's in addition to the ESOP profit sharing (that typically amounts to an extra 5% of your salary each year)

11/2/2005 7:40:06 PM

There are a bunch of strategies involved with the 401K plan. I'd read up on each index and decide which would be the best for the long term/short term gains. Offer to match the company or put in the full allowed amount. Typically, investing slows as one grows older, so spend what you can or look into other money making markets to diversify.

[Edited on November 2, 2005 at 7:45 PM. Reason : 6% and $.50 return on the dollar]

11/2/2005 7:44:16 PM

dollar for dollar, up to 6%

11/2/2005 8:26:17 PM

5% of gross monthly salary automatically contribued by employer, and optionally match up to $500/year. I've been wondering ... does anybody NOT have a percentage cap on their 401ks?

(Almost feel like this should be in Old School )

11/2/2005 8:47:14 PM

I thought it was the government that limited the percentage cap

11/3/2005 7:49:20 PM

200% up to 8% for them

11/3/2005 9:12:50 PM

damn that is awesome

where are you working

11/3/2005 9:29:37 PM

thats what im wondering

11/3/2005 9:40:12 PM

Quote :

"Does your employer match your 401k contributions? If they don't, you'd be better off with an IRA."

I have never understood why so many people pit 401k against IRA as an "either, or". If both are available to you, then you should have both.

11/3/2005 11:27:59 PM

if your employer doesn't contribute to the 401k then there is no reason to have a 401k. You just get locked into a crappy broker with limited investment choices.

11/4/2005 12:09:54 AM

my company matches 100% up to 4% of income, and they also have an ESOP profit sharing program that just gives me a bunch of bullshit numbers every quarter.

11/4/2005 3:29:56 PM

do it on your own. cough up the dough and see a financial advisor who can help get you started. it is well worth it.

11/4/2005 3:38:35 PM

mine is set up through T. Rowe Price and its doing great. I'm averaging about a 12.1% annual return

11/4/2005 11:10:20 PM

Quote :

"if your employer doesn't contribute to the 401k then there is no reason to have a 401k. You just get locked into a crappy broker with limited investment choices."

Anyone hear of pretaxed income?

11/7/2005 1:26:03 PM

anyone hear of an IRA? However, pre-tax retirement savings isn't as good as it sounds. If you get a Roth IRA, you pay taxes now, but no taxes later. I'm guessing taxes will be higher in the future than they are now. I'd recommend the Roth IRA over the 401k, unless your employer contributes to it. If they do, just put in enough to get all of their contribution and put the rest in a Roth IRA.

[Edited on November 7, 2005 at 3:49 PM. Reason : ?]

11/7/2005 3:43:48 PM

Well sure. If you want contribute a measly 4k a year for the rest of your life then an IRA is great.

11/7/2005 8:09:00 PM

^^I plan on doing both the Roth IRA and the 401k...I've decided against the managed account, I honestly believe I can manage it on my own with a bit of research. Thanks for all the advice/comments!

11/7/2005 9:33:33 PM

Quote :

"Well sure. If you want contribute a measly 4k a year for the rest of your life then an IRA is great."

So put 4k in the IRA and the rest in the 401k.

11/7/2005 9:51:24 PM

it's like this
#1 put money into your 401k up to the point of the employer match. if there's no match, skip this step

#2 fully fund your ROTH IRA

#3 then go back to your 401k and max out your pretax contributions

11/7/2005 10:23:31 PM

Basically what I said.

Quote :

"I'd recommend the Roth IRA over the 401k, unless your employer contributes to it. If they do, just put in enough to get all of their contribution and put the rest in a Roth IRA."

11/7/2005 11:33:00 PM

There is a big difference between

Quote :

"So put 4k in the IRA and the rest in the 401k."

and

Quote :

"if your employer doesn't contribute to the 401k then there is no reason to have a 401k"

11/8/2005 12:46:27 AM

That was in addition to my previous posts. It should be obvious that you don't turn down free money.

11/8/2005 8:23:20 AM

Yeah, but that doesn't mean you should cap your investing at the 6% match your employee offers.

11/8/2005 8:51:21 AM

No, it means you should do it in the order chocoholic summarized.

11/8/2005 10:52:25 AM

33% up to 6%.

I've got my account through JPMorgan and initially they had a listing of mutual funds that you could invest in (say 7 or 8 plus a Julius Baer fund). We also had the option of pouring our 401K funds into company stock (which I did 100% to). When I started in January, the price of our stock was right at $51.00. Last week it hit $90 before dropping to around $87.00 where it's at now. I've had a 48% yield on my 401K since I starated.

If anyone's interested, I would buy if it splits. Stock symbol: CERN

11/8/2005 11:13:07 AM

it isnt very smart to put 100% of your 401k into your company's stock. you should look to diversify it. you better hope there isnt a recession when you need your money.

11/8/2005 1:28:40 PM

^ thats what i was thinking

11/8/2005 1:31:06 PM

I'm 22 and the stock is overperforming. Once I get about $5000 to $7000 invested, I'll move on and start investing in mutual funds. It's not like I'm dealing with tens of thousands of dollars.

11/8/2005 1:33:25 PM

Quote :

"the stock is overperforming"

I don't know if I would sell what you've already invested in yoru company, but you definitely need to stop buying more if it's overperforming. You need to design a diverse portfolio and start buying the stuff that is doing worst right now.

11/8/2005 1:36:23 PM

The only thing that has kept me from diversifying was the fact that we could only invest in 8 different mutual funds that had a year yield of like 3%. I can afford more risk than that. I got in touch with my JPMorgan people and they sent me a sheet to allow me to pretty much invest in anything I want.

I've stopped buying my company's stock... at least until it splits.

11/8/2005 1:38:55 PM

ok, just don't be one of the cry babies if the company goes under and you lose everything.

You need to consider the difference between investing and gambling. I'd say right now you are doing the latter.

11/8/2005 6:28:37 PM