401(k) help

[riverwed070707]

Feeling like a newbie all over again. My retirement savings was on autopilot while I was with my previous company for 15 years. I left my FT job last November. In January I was recruited by a staffing company to take a part-time contract position. As seems to be the trend with my career, I thought I'd just do this "until I figure out what I really want to do" and therefore I didn't enroll in any of the staffing company's benefits... well my contract was going to be up at the end of December and they've asked me to stay on another year. I love working with the company and I've decided to take them up on it in hopes I might eventually get brought on permanently. As a result am feeling pulled to start my retirement contributions back up. The staffing agency's plan is through Fidelity, there is no match and the investment choices are pretty limited. Planning to contribute the max of 60% from now until the end of the year which will get me around $3k invested for the year (I also maxed my Roth earlier this year), and then I'll adjust to something more sensible come January. Anyway, I could use some advice on choosing where to stick these funds. Are any of these a Fidelity version of VTSAX? What should I be looking for to choose 2-4 growth stocks? I'm not interested in bonds (my other account has a 10% bond allocation) and have a strong risk tolerance. Appreciate any recommendations or advice!

[Jluke]

FID 500 index should be all you need.

That would be the S&P 500 which is closest to VTSAX in your list.

FSKAX is fidelity’s version of VTSAX. They might have another fund as well (0 cost fund).

given that you are just starting these contributions is another reason to only choose the one fund for now.

if you really want to get complicated you could choose large, mid and small in a certain ratio.

but the 500 index should be good for your purposes

[kork13]

FID 500 index should be all you need.

That would be the S&P 500 which is closest to VTSAX in your list.

but the 500 index should be good for your purposes

Agreed with JLuke -- just do the S&P500 fund & it'll be adequate for what you're after.

And it's great that you're jumping into the 401k, even if delayed. Any time you spend not investing in an available tax advantaged account is effectively wasted space for future money, because the limit resets every year.

Does this 401k offer a Roth option?

[riverwed070707]

Agreed with JLuke -- just do the S&P500 fund & it'll be adequate for what you're after.

And it's great that you're jumping into the 401k, even if delayed. Any time you spend not investing in an available tax advantaged account is effectively wasted space for future money, because the limit resets every year.

Does this 401k offer a Roth option?

Agreed - I should have done it right away but I needed time to assess how my pay cut and lack of benefits would play out in the budget and how long term this contract would be. When I started, I really thought it would only be 6 months or so and it seemed like more work to start another retirement account when I haven't even figured out what to do with my old one yet. Ready to get back on track now. No Roth option in this account but I'll continue to max my Roth IRA with Vanguard. I already have those funds set aside for January.

Follow up question - I haven't touched my 401k from my previous employer since I left. It's obviously down. Is there any downside to just rolling those funds over to this 401k to keep everything together once I get it set up? Currently paying something like $50/quarter for the old administrator to hold it since I'm no longer employed there. It has a balance of around $250k currently.

[Petunia 100]

The 500 index together with the extended market index in a 70/30 ratio will give you total stock market.

[rennigade]

Follow up question - I haven't touched my 401k from my previous employer since I left. It's obviously down. Is there any downside to just rolling those funds over to this 401k to keep everything together once I get it set up? Currently paying something like $50/quarter for the old administrator to hold it since I'm no longer employed there. It has a balance of around $250k currently.

No, there is no downside. Your number of shares will never change unless you sell some. The only thing that changes is the value of each share. Move it asap.

I let mine site for years at precious employer. I think I paid $50/year for no reason.

[Like2Plan]

I agree with what has already been suggested: I would probably just go the S&P 500 to start- to start off it probably won’t make much of a difference because it will be a small percentage of your overall asset allocation.
And, you should be investing this as a part of your overall asset allocation. You can make adjustments elsewhere (in you other accounts) in order to make to make things balance out.

Another factor is the expense ratios. There are formulas you can use to replicate total stock market
using a percentage of s&p 500, plus mid cap and small cap, but it might not make sense to do it inside your 401k if the expenses are out of line. Usually, the S&P 500 expense ratio isn’t too bad. But, sometimes they stick it to you with the other funds.

[Like2Plan]

Follow up question - I haven't touched my 401k from my previous employer since I left. It's obviously down. Is there any downside to just rolling those funds over to this 401k to keep everything together once I get it set up? Currently paying something like $50/quarter for the old administrator to hold it since I'm no longer employed there. It has a balance of around $250k currently.

Oh my gosh- $50/quarter is a lot!
One possible downside is the new 401k that you are rolling it to has a higher ER for the funds you are invested in-BUT, paying $200/year on $250k (in addition to the normal fund ER) would be like you are already paying a pretty high expense ratio.

Another possible downside is flexibility. You should read your Summary Plan Description (SDP) for your new plan to see what the rules are for rolling out funds you are rolled in from another plan. Some plans allow you to remove those funds even while you are still employed.

The third thing is when you do the roll over, you may have to go to cash (they may not be able to do an in kind rollover), so you might be out of the market for a period of time depending on the rules. (You can do things like move some of your other assets into stocks during this period of time to compensate).

[riverwed070707]

Sharing an update on my rollover + a funny story.

Finally getting around to rolling over this old 401(k) 2+ years after leaving . Current balance is around $335k (yay for a 35% increase since I posted in November '22 without additional contributions!) I'm splitting it into 3 accounts - $200k to a self directed IRA to ramp up my hard money lending @ 10-11.5% returns, $24k to my Roth IRA (at one point I had contributed around $7k as a Roth 401k post tax and this is that plus gains), and the remaining approx $110k pre-tax dollars will go to my new company's 401k to keep some balance between my stock and real estate investments.

My old 401k and new 401k are both administered by Merrill Lynch, who is apparently very behind in technology when it comes to rollovers. They are insisting on mailing me a check for all 3 distributions at which point is up to receiving custodian how they want to receive those funds.

SDIRA: "just email us when the funds have been released and we'll handle the rest"
Vanguard Roth IRA: "you can do a mobile deposit through our app when you receive the check from ML"
ML: we're going to cut you a check, mail it to your house and then you need to mail it back to us without signing or doing anything to it what?? why?

Inefficiency is one of my biggest peeves and this process with ML is pretty high on the list of keeping old processes that no longer make sense

[LivingAlmostLarge]

I gave up with ML after my 65 dollar debacle

[kork13]

Inefficiency is one of my biggest peeves and this process with ML is pretty high on the list of keeping old processes that no longer make sense

When you just don't care what customers think, customer (dis-)service becomes alot simpler to manage.