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Financial Planning / Foolish 401(k)s


Subject:  Re: Fidelity advisor? Date:  1/24/2012  2:21 PM
Author:  pauleckler Number:  24825 of 26142

Check out your funds on and see what the t class funds pay in expense ratio, 12b-1 fees, etc.

Fidelity is a quality company that usually has low fees, but when advisers are involved someone has to pay for them. Is it you? Or is it your employer? Your figures should tell you, or at least let you know what questions to ask.

Accumulating funds in your 401K is usually convenient and the pretax contribution limits are higher than say contributions to an IRA or a Roth. By all means fund your Roth to the max too, but I would continue the 401K unless the fees are truly excessive.

In your Roth you could take the opportunity to see if you can find some better investments. The broad stock market has not done so well during the recent economic turmoil, but we hope things settle down and do better over the next few years. You want to pay attention and take advantage of the good investments when that happens. Meanwhile its OK to park your funds in safer investments while you wait.

After you max 401K and Roth contributions each year, most would invest in a taxable account ideally in the long term buy and hold style. By choosing investments you can hold long term, you pay taxes only when you sell and then at capital gains rates. Doing this successfully is not so easy, but as you gain experience you can get better at it.
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