Help with 401k distribution

[BOGAURD69]

I am 23 years old and just opened my 401k at my new job. I was wondering if anyone could help look over my distributions and give me some feed back. I am currently putting 10% of every pay check into the 401k plan and I am paid weekly.

Loomis sayles invest grade bond(y) 0%
Thornburg international value (r5) 0%
Wells fargo stable return fund n15. 0%
mainstay large cap growth I. 25%
investco American value fund y 0%
American funds balanced fund (class r5) 0%
T. Rowe price equity income fund. 15%
T. Rowe price retirement 2020 fund. 15%
T. Rowe price retirement 2030 fund. 15%
T. Rowe price retirement 2040 fund 0%
T. Rowe price small-cap stock fund. 30%

[bjl584]

I don't think that you should be in either of those target funds. In 2020 you will be 30. In 2030 you will be 40. Even with the 2040 fund, if you were in it, you would only be 50 when it reaches maturity. Your portfolio will be getting way too conservative way too early if you invest in those.

[Like2Plan]

Kudos to you that you have started investing for your retirement at age 23.
I agree with bjl584. Target date funds are set up so that you pick one fund --ideally close to when you are planning to retire. The fund takes care of diversification and balancing of all the investments inside the fund. The target fund will evolve into more conservative investments as you get closer to your target retirement date.

One thing that is missing from the data you presented in your post is the expenses with associated with each of the funds. Sometimes (not always) the expenses in 401Ks can be high.
Some other things we don't know is your overall asset allocation/asset allocation goal (unless the 401K is your only asset allocation), your risk tolerance, whether you receive an employer match, your tax rate and filing status.

It would be difficult to make a suggestion on what to invest in based on the information you have given. Depending on the expenses (and other factors), it could be that it would be better to invest in your company's 401k up to the match and then open up a Roth IRA on your own. Investing outside the 401K would open up a lot more investment choices (and possibly lower expenses).

[MonkeyMama]

I disagree about the Target date funds. A lot of them are known for being extremely aggressive.

2020 Fund is 70% in stocks, which is fair.

2030 Fund is 80% stocks, which is personally as aggressive as I Would go if I Were in my 20s.

2040 Fund is 90% stocks, which is quite aggressive.

In addition, you only put a small amount in the Target funds and are very heavily weighted in stocks, otherwise. This is a 95%+ stock portfolio.

T Rowe in general has low expenses (if you don't have cheaper options like Vanguard). The Mainnstay fund has a lot of expenses associated with it, so I would not choose that one.

Likewise, why not just put it all in Target date funds? Is there any reason you chose the other funds?

I am looking up the others to see if you are doubling up. The Target Date funds don't have a "small cap" fund, so I think it's reasonable to have a small cap fund in addition (I do the same, and seen others mention this in the forum). Maybe you have similar reasons for choosing the other funds.

& I absolutely agree with the point that an IRA may also be a better investment vehicle.

[feh]

Are those all the options in your 401K?

I agree with previous posts. Please tell us what the expense ratios are on those funds. And let us know if you have any other investments.

PS - we're discussing your contributions, not distributions

[jIM_Ohio]

I disagree about the Target date funds. A lot of them are known for being extremely aggressive.

2020 Fund is 70% in stocks, which is fair.

2030 Fund is 80% stocks, which is personally as aggressive as I Would go if I Were in my 20s.

2040 Fund is 90% stocks, which is quite aggressive.

In addition, you only put a small amount in the Target funds and are very heavily weighted in stocks, otherwise. This is a 95%+ stock portfolio.

T Rowe in general has low expenses (if you don't have cheaper options like Vanguard). The Mainnstay fund has a lot of expenses associated with it, so I would not choose that one.

Likewise, why not just put it all in Target date funds? Is there any reason you chose the other funds?

I am looking up the others to see if you are doubling up. The Target Date funds don't have a "small cap" fund, so I think it's reasonable to have a small cap fund in addition (I do the same, and seen others mention this in the forum). Maybe you have similar reasons for choosing the other funds.

& I absolutely agree with the point that an IRA may also be a better investment vehicle.

55% 2030 fund would be 41% stocks
15% each in Loomis sayles, thornburg and T Rowe small cap would be 71% stocks total

[autoxer]

If I were your age and just opened up a 401k, I would put 100% of the contribution into the T.Rowe Price Target 2055 fund. The great thing about the target funds is that they automatically shift the allocation and diversification as you approach retirement. They were created so that you only need to choose one fund, not spread your funds across all of them.

[BOGAURD69]

Thank all of you for your responses.
Yes these are all of my options for my 401k plan and yes my company does match up to %6. This is my only asset. I am single claiming 0 and I have a pretty high tolerance for risk. I am currently making around 40,000 to 50,000 a year. As far as the way I have it Set up now, I was just trying to be aggressive about it. This is the first time I have really paid attention to what my choices are.

Thanks you Like2Plan for explaing what the target funds are I honestly had no idea im still pretty green to all of this and where can I find the expenses of the funds at?

Also I'm sorry it takes me so long to respond. Thank you all again for the help!!

[feh]

Thank all of you for your responses.
Yes these are all of my options for my 401k plan and yes my company does match up to %6.

In that case, I'd contribute 100% to the 2040 fund.

[Petunia 100]

Thank all of you for your responses.
Yes these are all of my options for my 401k plan and yes my company does match up to %6. This is my only asset. I am single claiming 0 and I have a pretty high tolerance for risk. I am currently making around 40,000 to 50,000 a year. As far as the way I have it Set up now, I was just trying to be aggressive about it. This is the first time I have really paid attention to what my choices are.

Thanks you Like2Plan for explaing what the target funds are I honestly had no idea im still pretty green to all of this and where can I find the expenses of the funds at?

Also I'm sorry it takes me so long to respond. Thank you all again for the help!!

Go here: morningstar.com

You can look up each fund choice and find out all sorts of info.