Personal Investments • Re: Lost my mom, looking for a longterm inheritance strategy

In my opinion the better funds to consider using in your employer's 401k plan are:
1) Vanguard Tot Stk Mk Idx Adm (VTSAX) ER 0.04%;
2) Fidelity Global ex US Index (FSGGX) ER 0.06%;
3) DFA Interm Govt Fixed Incm I (DFIGX) ER 0.12%; and
4) ML Guaranteed Return Account.

What interest rate is currently being paid on "ML Guaranteed Return Account", and what rate if any is guaranteed?

I have a request in for more information on the ML Guaranteed Return Account as the Fund Fact Sheet didn't disclose the percentage. I did look at the past performance % and it shows a constant 1.01% across the 1yr, 3yr, 5yr, 10yr but that seems very low. I will report back if I get more info.

for your favorites above, what % of investment across the 3 or 4 options would you suggest if I am trying to be more aggressive and longterm focused?

Does your employer's plan permit non-Roth, after-tax contributions? If so then that opens the possibility of much larger annual contributions to the 401k, see: Mega-backdoor Roth.

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If the rate on the Guaranteed Return Account is just 1.01% then I would not use that fund at all.

Asset allocation is a very personal decision which must be based on each investor's own individual ability, willingness and need to take risk.

How stable is your job, your employer, and the industry you work in? How large is your emergency fund? How would you describe your risk tolerance? How did you act in recent stock market crashes (make no changes, stop contributions, increase contributions, sell your investments)?

Please see:
1) Wiki article, "Bogleheads® investment philosophy", Never bear too much or too little risk;
2) Wiki article, Asset allocation; and
3) What ratio are you stocks/bonds and how old are you?, graph and bar chart

In general I often suggest around 60% U.S. stocks, 20% international srocks, and 20% bonds. What is more important is what will be comfortable for you the next time the markets go crazy.

It's often desirable to consider all accounts together as a single unified portfolio, rather than view each account in isolation. It's not necessary or even desirable to have all accounts mirror the same allocation.

It's often best to use only very tax-efficient stock index funds in a taxable brokerage account. Stock Index funds are suitable for any type of account. It's often best to use only stock funds in Roth IRAs. Bond funds are not very tax-efficient and ordinarily should be held in a tax-advantaged account, preferably a traditional tax-deferred account.

Wiki article, Tax-efficient fund placement.

Statistics: Posted by ruralavalon — Thu Jun 27, 2024 10:29 am

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