401k

[dasaybz]

Well, I think many people are interested in 401k stuff. Trey, let's get it going in here. What are your recommendations for people right now? Where should our money be going? What should we be avoiding? What are some generally good pointers?

[treydawg]

Alright, thanks for starting this topic Jay.

For 401k stuff you're going to have a hard time making money right now. The best thing you can do is to protect your profits. I'll talk about this a little more below.

What I have done and would personally do is to take all money out of ANY small cap funds. In a market like this (volatile/recession fears), those small cap stocks will take the biggest hit as they don't have large amounts of capital like a CSCO to sustain a downturn in the economy.

Right now I have most of my money in my company's value fund. This consists of stocks that the fund manager has considered to be values for this year. This market will lend kindly to value stocks, whereas growth stocks are going to be getting hurt. While the market was bullish, the growth fund offered by my company was among the best options.

Telling people where to put their money is often difficult. It depends on how old you are, how aggressive you want to be, and other things such as market conditions. Also, it totally depends on what investment options your employer gives you. For example, I'm pretty down on my companies 401k options. They have a great matching program, but their options leave a lot to be desired. Off the top of my head, I have 8 different options to choose from. Two or three of which are absolute garbage that I wouldn't ever consider putting a dime in.

Again, it's hard to tell people what do without taking a look at all the contributing factors that I mentioned above. If anyone would like to talk about their situation and their goals I could lend some advice.

[sukie]

trey... On a side note. I had to roll over 15k into an IRA from my ESOP payout to squealch a tax F up by my wife's former employer. My company offers a 401k but I plan on leaving in 2 years. I invest outside instead. I think the key to riding out this storm which I believe is a bit media exaggerated... is to be diversified.

[treydawg]

trey... On a side note. I had to roll over 15k into an IRA from my ESOP payout to squealch a tax F up by my wife's former employer. My company offers a 401k but I plan on leaving in 2 years. I invest outside instead. I think the key to riding out this storm which I believe is a bit media exaggerated... is to be diversified.

Definitely diversify...

Does your company match for your 401k? How long is the vesting period?

[sukie]

Yeah they match. 7 years I believe... I would be vested but I'm investing troo much elsewhere to 401k it at a rate that would add up to a hill of beans with 2 years to go.

[treydawg]

If they match, that's free money to you Sukie. Then when you quit just roll it over into an IRA.

[sukie]

As long as I hit the vested years.

[treydawg]

As long as I hit the vested years.

Yeah....you said you would be vested though...or is that coming up in a year or two?

[sukie]

What is the age to be able to see the moneeeeeeeeey? 59.5 like IRA or 65?

[treydawg]

What is the age to be able to see the moneeeeeeeeey? 59.5 like IRA or 65?
59.5 I believe


I'm not sure if you're getting vested confused with the payout time or if I'm confused with what you're asking. Vesting is the amount of time you have to work for a company before you will get their full matching on your 401k. At my company, if you stay for 3 years, you will get 100 percent of what they've matched on your 401k. If you leave early, they will take a percentage away depending on how early you leave.

[sukie]

I know what the vesting is. I checked it's 7 and I have a year and a half to go. Currently I am packing all my spare cash into my Wachovia investment account thus the disinterest. My plan is in place.

It is knda cool actually having a financial plan.

[treydawg]

I know what the vesting is. I checked it's 7 and I have a year and a half to go. Currently I am packing all my spare cash into my Wachovia investment account thus the disinterest. My plan is in place.

It is knda cool actually having a financial plan.

Goals are great. It isn't hard either, just takes some conviction and adjusting your lifestyle if need be.

[anEinherjer]

I wouldn't take money OUT of small cap right now, I'd put money IN. If you're money's in there, you've already lost a bunch. There is money to be made.

I just discovered this forum. Outstanding idea, though the idea of Bills fans managing money scares the crap out of me. :D

[anEinherjer]

7 years? That friggin blows. :)

[treydawg]

Just because they've lost a lot doesn't mean that can't lose more. I'd rather stick with what works, companies that have large amount of capital on hand.

[anEinherjer]

If I was investing in individual stocks, I think you're probably right - I certainly dont' have time to find the good small companies that are going to coast through this crap and come out flying on the other side.

That said, most 401k's I've seen only give you mutual fund options (or, YAY, company stock! :rolleyes:). In those cases, for all us 20 and early 30 somethings, I just point the dial at Aggressive and hit the gas pedal. :) Sure you lose some now, but it'll pay off in 30 years.

[gilchristfan]

7 years? That friggin blows. :)


The 7 year period is for the employer contribution/accrued benefit. It doesn't really apply to an employee's contributions.

Not that I'd recommend someone cashing in their 401k anyways.