401k

So what happens if nobody quits? What happens if the people that do quit don't have enough money in their accounts to cover everyone else's fund expenses? Does Fidelity just invoice your employer? What happens if someone retires or quits with a fully vested 401k? Does your employer pay those expense fees indefinitely?

I'm just curious. Think I might bring this up at our next quarterly meeting. I want a company match plus expense fees covered!

 

Jack Bogle was so influential, there's an investing and personal finance forum named in his honor. Bogleheads.org

 

Also wanted to add that Schwab and T Rowe Price are starting to get with the program. In the information age, people are wising up. It's important to look at these funds carefully regardless of the brokerage house offering them.

One other thing; Edward Jones is the CR England of investing. RUUUUUN.

 

In most 401ks the fees charged by the particular mutual funds are just taken from the individual owners' account annually, or when you sell/move into another mutual fund. For example, back-end fees charge a % fee when you move from Fund A into Fund B. I was never billed and would only know of the fee by reading details in the prospectus or a chart summarizing fees for several mutual funds. There might be some free mutual funds, but as far as I know every mutual fund is charging some fee to someone. Vanguard and Fidelity just charge about 10% of what other mutual fund companies charge for fees, as a general fee. I haven't done much research since the robot investments were introduced.

 

Somebody will always quit/resign in this industry, whether the driver's wife fell ill, the mechanic was lured away by $2 more per hour, an office lady moving too far away to commute due to divorce/marriage/etc... no matter how good a place is, there will never be 0 turnover. That's why I say to check a company's turnover rate, and if below 50%, inquire further, because drivers are staying there for a reason (industry average is 98%).

 

I know this topic is directed more to 401Ks and mutual funds. I just wanted to add that over the last 30 years I have done VERY well with commercial real estate investments. I will never hold all my investments in one sock. I have been retired since Dec of 2012. I am still under 65 and to this day have not touched a dime of social security. In all honesty, I am not expecting this to be here at its current payouts much longer.

 

Interesting... I never considered commercial. I was about to pull the trigger and get a few rentals in 2020, but thankfully I hadn't pulled the trigger yet when the eviction moratorium hit. I still haven't invested a dime into rentals because of it... that the government, on a whim, can just say "you don't need to pay your rent, they can't kick you out over it" and leave the landlords holding the note on a place on which they can't gain any benefit. Renters alone can be bad enough, that just sealed it for me.

Now commercial, OTOH, wasn't covered by this and I have never seen a scenario where they would cover such things.

 

My bad, let me reword what I was talking about. I still own close to 80 acres of undeveloped property zoned commercial in the Atlanta metro area. I would NEVER get into that rental crap!

 

Always contribute to your 401K, especially if there is an employer match involved. Put in as much as you can in your 401K regardless of the % match of the employer. Use a Roth IRA as a secondary retirement mechanism due to the annual contribution limit. .

The typical 401K has those stupid Retire in 2040, 2045, 2050, etc funds. Avoid them.

You should be able to invest in an S&P Index fund, so choose one of those.

 

He's young. A retirement target fund wouldn't be a bad idea, as the ones for 2060+ are highly-aggressive during his younger years and will net him a greater rate of return early-on. As he gets older (and wiser), investing in index funds would be more beneficial.