401K

[tr21]

Agreed. I neither understand the market or have any desire to learn.
I retired last year and will probably leave my funds in Target 2020 accounts as long as they exist.

if the market has a good pull back and your semi aggressive it will be time to bump it up to the 2030 to get a little more aggressive. if you want a little more "safety" move 1/2 over and if the pullback continues you can put the other 1/2 in. the 2030 will be a little more aggressive and your risk difference will be only a little bit higher if you follow what i'm saying. i'm no expert but i trade between $10-12 mil. of stocks/options a year and average over 100 trades a month

 

[ucfireman]

I would suggest considering target date funds. Example target date 2030 for someone planning to retire in 10 years.

The managers of these funds adjust the funds as needed to proper amounts of stock/bond/cash for an investor in that age group.

The management fees are usually higher on these funds than other mutual funds.
I manage my own and am heavily in stocks, large caps and mid caps.
I made 39% after my contributions and 31% without.
The best managed "target date" fund in our 457 was 22%.
I don't understand everything in the market (calls, puts, options etc) but I do ok.
I would rather blame myself and be mad at me for losing money than pay a manager and still lose money. (and yes I know I pay a manager/fees in the mutual funds in my 457)

 

[bassboy1]

I would suggest considering target date funds. Example target date 2030 for someone planning to retire in 10 years.

The managers of these funds adjust the funds as needed to proper amounts of stock/bond/cash for an investor in that age group.

yep, thats what i tell people who dont understand the market

I've heard it said that if you have to ask if target date funds are right for you, they are.

 

[tr21]

The management fees are usually higher on these funds than other mutual funds.
I manage my own and am heavily in stocks, large caps and mid caps.
I made 39% after my contributions and 31% without.
The best managed "target date" fund in our 457 was 22%.
I don't understand everything in the market (calls, puts, options etc) but I do ok.
I would rather blame myself and be mad at me for losing money than pay a manager and still lose money. (and yes I know I pay a manager/fees in the mutual funds in my 457)

yea but some people dont/wont to learn or put the time in to trade. i sit all day almost every day 7am-8pm with a laptop and have business channel on tv. but its like a hobby for me. last year i made just under 50% and always had 20% or more in cash, luckily our 401 allows us to have a brokerage link where we can trade anything in it. if your a seasoned trade do yourself a favor and study options

 

[tr21]

I've heard it said that if you have to ask if target date funds are right for you, they are.

thats true. if your young do yourself a favor, watch cnbc or bloomberg tv. join something like THE MOTLEY FOOL STOCK ADVISOR or one of the other's, it's worth the money, their pretty good . take the time and learn it will pay off later. if your scared you can open a paper trading account with waterhouse and do simulated trading until you figure it out. i enjoy helping young people get started investing in hopes when they get old and can retire at 55 as i did they look back and think of a old fool that got them started !

 

[Buford_Dawg]

The #1 thing with 401k investing IMO is time, start as early as you can contributing what you can, increase it as you get promotions, raises, etc...., only if it is 1% a year, be aggresive until you reach 50 or so and then start toning it down. Time is the biggest factor and increasing your contribution amount over time. It is amazing what 5 to 15% of your paycheck in a 401k will build over 30 to 40 years of contributions. And I am a novice, no day trader, some years I have gone without ever even logging into my 401k account to see the balance. You guys that spend time on it everyday is something I havent had time to do or learn. Maybe once I actually retire

 

[tr21]

The #1 thing with 401k investing IMO is time, start as early as you can contributing what you can, increase it as you get promotions, raises, etc...., only if it is 1% a year, be aggresive until you reach 50 or so and then start toning it down. Time is the biggest factor and increasing your contribution amount over time. It is amazing what 5 to 15% of your paycheck in a 401k will build over 30 to 40 years of contributions. And I am a novice, no day trader, some years I have gone without ever even logging into my 401k account to see the balance. You guys that spend time on it everyday is something I havent had time to do or learn. Maybe once I actually retire

this is what i tell younger people just starting out, put as much as you can afford in. every time you get a raise put 1/2 of it in your 401 before it shows up on your paycheck. and if your company has a match and you dont at least put in the max they match your stupid ! it's free money your just leaving on the table.....

 

[Milkman]

yea but some people dont/wont to learn or put the time in to trade. i sit all day almost every day 7am-8pm with a laptop and have business channel on tv. but its like a hobby for me.

Wow !!! You are serious about stocks and such.......13 hours a day !!!
My retirement is MUCH more laid back. I don’t ever watch the business channels. You have a very profitable hobby.

 

[tr21]

Wow !!! You are serious about stocks and such.......13 hours a day !!!
My retirement is MUCH more laid back. I don’t ever watch the business channels. You have a very profitable hobby.

yes it's a job for sure. even now i'm watching the futures trying to figure out where it's trying to go. if i wake up in the middle of the night i look at them. just a little advise, if you get cnbc watch Jim Cramer's MAD MONEY at 6pm, it will be worth your time. he really gets into it !!!!!

 

[ucfireman]

yes it's a job for sure. even now i'm watching the futures trying to figure out where it's trying to go. if i wake up in the middle of the night i look at them. just a little advise, if you get cnbc watch Jim Cramer's MAD MONEY at 6pm, it will be worth your time. he really gets into it !!!!!

He is almost psychic on some of his picks. I like that he has CEOs on there and takes questions. I only watch periodically but.
I did the day trading thing about 15+ years ago when just playing with little money. Did pretty good but the trading fees ate my profits. Now with no trading fees it might be worth trying again.

 

[Elkbane]

When is everyone moving their 401K money to a safe option? Selling off their other investments, paying the taxes on the gains? Then riding the storm out, with the money on the sideline to reinvest after the crash?

Please don't think you have to sell the investments WITHIN your 401k and take a distribution - which would be a taxable event. You can just sell the investments and they will stay in the 401k and be converted to cash, but still maintain the tax protection that the 401k provides. If you need more investment flexibility than your 401k offers, you can do a trustee to trustee transfer of the 401k assets to a self-directed "Rollover IRA" with almost any of the larger brokerage houses, like Charles Schwab. You can keep the 401k open, contribute or not - that is you option - this doesn't mean you are closing the 401k - you are just shifting the assets to another form of tax protected account that you alone control.

To be clear DO NOT have your 401k make a distribution to you in this process; if you do its a taxable event, and you may be limited on how much of that money you can put into a contributory IRA based on your age and income. It must be a trustee-to-trustee transfer in order to avoid taxation.

I've rolled 401k's from 3 different previous employers into a single rollover IRA. The brokerage house you choose knows the rules and how to do it.

Elkbane

 

[tr21]

He is almost psychic on some of his picks. I like that he has CEOs on there and takes questions. I only watch periodically but.
I did the day trading thing about 15+ years ago when just playing with little money. Did pretty good but the trading fees ate my profits. Now with no trading fees it might be worth trying again.

i was the same day trading in the early 90's. then when my companies 401 program allowed us to put up to 90% (i think it is) in the brokerage link with no short term gains i said "game on". we can trade almost any stock in the world and options also. and since retirement i just leave it in there and continue to trade in it, why change it ?

 

[ucfireman]

There will be penalties too if you are not of age. Not sure what that age is, I keep hearing 63 to 65.

 

[Elkbane]

Re' penalties. You are correct. Penalties for distributions out of IRA/401k age if <59.5

Elkbane

 

[PCNative]

In regards to penalties: There is what they call the 55 rule. This allows a person to take distributions from 401K without the 10% penalty only if you are 55 or older and are retired. Trust me on this, I did it.

 

[tr21]

you can still work at another company from what we were told under the 55 rule..

 

[PCNative]

you can still work at another company from what we were told under the 55 rule..

True, also when I stated 55 or over, you have to be 55 or over when you retire. If you retire at age 50 and at 55 you try to withdraw you are subject to the penalty.

 

[mallardsx2]

I was under the impressions there were exceptions if you were unemployed after your 55th birthday that you could make withdraws without penalty under the 55 rule.

Could someone explain this to us?

 

[tr21]

I was under the impressions there were exceptions if you were unemployed after your 55th birthday that you could make withdraws without penalty under the 55 rule.

Could someone explain this to us?

we were told if you retire after your 55 from the company you can take withdrawls without penelty and work another job.....now i dont know if that includes being unemployed, they might look at that different than retired i dont know ....call whoever has your 401 and they should be able to tell you for sure

 

[PCNative]

I was under the impressions there were exceptions if you were unemployed after your 55th birthday that you could make withdraws without penalty under the 55 rule.

Could someone explain this to us?

If you become unemployed after you reach the age of 55, you can take distributions without paying the penalty. It doesn't matter if you quit or retire. Some companies have stipulations such as having to withdraw the entire amount. I'm no expert in this but researched a lot about it before I retired.