Non-Company Sponsored 401K

[wagner]

I need to get into another 401K program but my current company doesn't have one currently.

 

What are my best options?

[Geeesammy]

I need to get into another 401K program but my current company doesn't have one currently.

 

What are my best options?

 

401k is only worth it just to get the company match. I would invest into a Roth IRA before a 401k.

 

That's what I do at least. My work sponsored 401k performs terrible and I am in the "aggressive" group.

[Littleguy]

401K refers to an employer sponsored retirement program. Since your company does not have one you will need to do an IRA (either traditional or roth).

[wagner]

Well, this is why I don't do banking/finance :lolguy:

 

So, are all IRA devices created equal?

[Geeesammy]

Well, this is why I don't do banking/finance :lolguy:

 

So, are all IRA devices created equal?

 

Not at all. Talk with someone who currently does or has done financial planning to get a brief summary of things. Investopedia and other online resources have an abundance of information. Quite a few on here I'm sure do. One comes to mind but I won't mention any names.

Edited September 25, 2016 by Geeesammy

[2highpsi]

If you did have a 401k (that you participated in) at your previous employer, you could just roll it into an individual IRA and then make new annual contributions to it.

 

I would personally recommend just using a low cost source such as Vanguard or iShares until you have over 250k investable. (After that you might want to consider getting an advisor) Then inside that IRA purchase low cost index funds like VOO SPY or IVV (depending on which company you choose). I'll go ahead and take on the rebuttal to that saying it's too high risk. You honestly don't care about that yet. The market will go down, and it doesn't matter. You are young enough, and a down market will make you money on the long term due to dividend reinvestment at the lower values once it bounces back after that.

 

As far as the Roth/traditional debate, well that depends on your current income level and tax rate. I personally haven't made any Roth contributions since college. I'm assuming my tax rate (bracket) upon retirement will be lower than where I'm at now. No one knows this for sure though, I've seen some good points for both sides debating it.

[wagner]

Not at all. Talk with someone who currently does or has done financial planning to get a brief summary of things. Investopedia and other online resources have an abundance of information. Quite a few on here I'm sure do. One comes to mind but I won't mention any names.

 

I took a quick look at Investopedia to get the high level of it.

 

If you did have a 401k (that you participated in) at your previous employer, you could just roll it into an individual IRA and then make new annual contributions to it.

 

I would personally recommend just using a low cost source such as Vanguard or iShares until you have over 250k investable. (After that you might want to consider getting an advisor) Then inside that IRA purchase low cost index funds like VOO SPY or IVV (depending on which company you choose). I'll go ahead and take on the rebuttal to that saying it's too high risk. You honestly don't care about that yet. The market will go down, and it doesn't matter. You are young enough, and a down market will make you money on the long term due to dividend reinvestment at the lower values once it bounces back after that.

 

As far as the Roth/traditional debate, well that depends on your current income level and tax rate. I personally haven't made any Roth contributions since college. I'm assuming my tax rate (bracket) upon retirement will be lower than where I'm at now. No one knows this for sure though, I've seen some good points for both sides debating it.

 

I need read my separation paperwork to see how they swung it. To be honest, I don't want something I have to touch. With how my job is I don't have time to make investment choices and so on.

[2highpsi]

 

 

I need read my separation paperwork to see how they swung it. To be honest, I don't want something I have to touch. With how my job is I don't have time to make investment choices and so on.

 

If it was a 401k at your old job, any money you contributed is yours no matter what.

 

Any money they added in addition may or may not be subject to a vesting period.

 

 

What I'm suggesting (purchasing low cost index ETFs) is as hands off as it gets. You shouldn't ever mess with it except for making additional annual contributions if you can.

[Geeesammy]

What I'm suggesting (purchasing low cost index ETFs) is as hands off as it gets. You shouldn't ever mess with it except for making additional annual contributions if you can.

 

This is what I've done/ I'm doing. I just started getting my feet wet in investing outside of retirement funds in January, and I asked multiple friends in finance and investing as well as a family friend who has made a living investing for something "hands off" and every single one responded with ETF's as the best choice for something to just throw money at and let it grow.

[KillJoy]

I was going to suggest contacting Jordan.... BUT...... dat fucker is on the BALL!

 

:thumbup:

 

KillJoy

[2highpsi]

For sure Grant. Warren Buffett believes in this method so much, that he made a million dollar bet against a huge money manager 8 years ago.

 

He bet that an S&P index would provide larger net returns than any group of hedge funds that the manager would pick over a 10 year period. The bet still has another year and a half I think, but so far Buffett (and the index) are crushing the hedge fund returns.

 

Edit:

After eight years, as Buffett gloated at his company’s recent annual meeting in Omaha, the S&P 500 is killing it. The fund Buffett picked, Vanguard 500 Index Fund Admiral Shares (which invests in the S&P index) is up 65.67%; Protégé’s funds of funds—funds that own a portfolio of positions in a range of hedge funds— are up, on average, a paltry 21.87%.

 

Edited September 26, 2016 by 2highpsi

[El Karacho1647545492]

For sure Grant. Warren Buffett believes in this method so much, that he made a million dollar bet against a huge money manager 8 years ago.

 

He bet than an S&P index would provide larger net returns than any group of hedge funds that the manager would pick over a 10 year period. The bet still has another year and a half I think, but so far Buffett (and the index) are crushing the hedge fund returns.

 

Edit:

 

Funny you mention this. My old man manages a rather large portfolio and shares similar ideology. Here's a quick blurb from WSJ last year, note the index fund referenced.

 

http://www.hamiltoncapital.com/getattachment/28910bd6-8170-4608-b939-7b09a4852803/Wall-Street-Journal/

[cruizin01]

If I contribute over my employers matched amount would you guys take that unmatched amount and put in in a roth instead of doing what I'm doing? YTD Ive made a 7% return if that matters.

[Supplicium]

If I contribute over my employers matched amount would you guys take that unmatched amount and put in in a roth instead of doing what I'm doing? YTD Ive made a 7% return if that matters.

 

I would keep doing what you are doing in your 401k, just take money from your after tax paycheck to contribute to your roth IRA until $5500 is maxed for the year. If you cant max it without lowering what you contribute 401k then lower it to the company requirements for the highest match. IMO

[zeitgeist57]

What's the current 401(k) limit pre-tax? $17,500 annually?

[Supplicium]

What's the current 401(k) limit pre-tax? $17,500 annually?

 

 

18K now unless you are over 50yrs old then you can "catch up" with larger contributions

[wagner]

Well now my next steps are to find a quality vendor to do some IRA things with I guess.

 

My old 401k was with Fidelity, maybe I'll just work with them t keep this process simple.

 

For what it's worth I HATED finance classes in school. My brain can't math well so the number crunching made me feel like an idiot.

 

I do like the concepts behind it, I just don't have time to play the market myself. I just want to fire and forget so I can concentrate on making money to have invested

[Supplicium]

Well now my next steps are to find a quality vendor to do some IRA things with I guess.

 

My old 401k was with Fidelity, maybe I'll just work with them t keep this process simple.

 

For what it's worth I HATED finance classes in school. My brain can't math well so the number crunching made me feel like an idiot.

 

I do like the concepts behind it, I just don't have time to play the market myself. I just want to fire and forget so I can concentrate on making money to have invested

 

Fidelity and their funds are very good. Dont play the market just save your money and plow it into index funds, ETFs, and a target date fund and accumulate. Dollar cost averaging and time will reap large rewards

[El Karacho1647545492]

I can't remember what all these funds are but my dad and I had a long email chain back and forth about my goals/his advice and this is the allocation I came up with for my 401(k). Currently up 9% YTD and last year I was the only person in my company to see positive growth, though I did slightly reallocate out of a fund that my dad felt would underperform in the long run.

 

70% SWPPX

5% ODMAX

5% RERGX

7% AGDYX

13% SIGVX

[2highpsi]

Funny you mention this. My old man manages a rather large portfolio and shares similar ideology. Here's a quick blurb from WSJ last year, note the index fund referenced.

 

http://www.hamiltoncapital.com/getattachment/28910bd6-8170-4608-b939-7b09a4852803/Wall-Street-Journal/

 

That's awesome!!

 

I remember you mentioning that your dad was in the biz. I like everything he said in the article. How amped was he to be in the WSJ? I would have been ecstatic, lol.

[El Karacho1647545492]

That's awesome!!

 

I remember you mentioning that your dad was in the biz. I like everything he said in the article. How amped was he to be in the WSJ? I would have been ecstatic, lol.

 

I think he'd been in it before but he definitely appreciates the recognition. He just loves doing what he does (and he's usually right because he spends so much time studying his craft).

[EssFo]

So what you're saying is I shouldn't count on my company sponsored pension to be there when I retire?

[Jewtoys]

I can't remember what all these funds are but my dad and I had a long email chain back and forth about my goals/his advice and this is the allocation I came up with for my 401(k). Currently up 9% YTD and last year I was the only person in my company to see positive growth, though I did slightly reallocate out of a fund that my dad felt would underperform in the long run.

 

70% SWPPX

5% ODMAX

5% RERGX

7% AGDYX

13% SIGVX

 

 

My place has seen 9-11% the past two years. Which I guess is considered "good"

 

 

Growing up, grandparents on one side of my family never purchased me a single gift my whole life. Instead took that money, and would invest it. Was cool to track all of that growing up. Crazy to think, it was easy to find a guarenteed match @6-7%.

[koolrayz]

Funny you mention this. My old man manages a rather large portfolio and shares similar ideology. Here's a quick blurb from WSJ last year, note the index fund referenced.

 

http://www.hamiltoncapital.com/getattachment/28910bd6-8170-4608-b939-7b09a4852803/Wall-Street-Journal/

 

Thanks for the information. I talked with them last week and have an appointment at there office next Monday. I was very impressed with the operation.

[zeitgeist57]

So what you're saying is I shouldn't count on my company sponsored pension to be there when I retire?

 

I sense some sarcasm, but just in case - I wouldn't rely on ANY qualified program that guarantees defined benefits in the future.

 

Do what you can on your own. Most pensions are adequately funded and will be around, but I would treat them as gravy in retirement and focus on building assets in other ways.