My son 23 yrs old.. just got new job, he's offered a 403bhe was given literature on Franklin Templeton's funds. He can invest in just about any of the funds All have different classes A ,B ,B1 ,C.Any suggestions on which fund to choose first and which class.Or should he start with a Money market fund to build up a balance first or go right into an equity fund?I'd hate for him to pay commissions on retirement money.Or can he use another company..any suggestions on a no load way to go.Please help me to know what to consuder for him..Is there a way he can use a noload company and how can he go about it?thanksMEG
First, please congratulate your son on beginning to earn, save, and invest at such a young age, especially in this economy. He's a good light year ahead of most 23 year olds. (Yeah I know he owes it all to you.)Does his 403(b) plan offer employer matching? If so he should first contribute enough to capture 100% of the matching funds offered. Beyond that, I would open a Roth IRA (point him to www.vanguard.com- he can open an account online) and contribute the full $3,000 before contributing non-matched 403(b) funds. Ideally he'd max out both his Roth and his 403(b) plans.Next, he should invest in stocks or stock mutual funds, which will outperform other asset classes given his 50 year (!) time horizon.Which funds? He needs to call the 403(b) plan administrator and ask for the names and expense ratios of each of their no-load equity offerings. Then pick the one with the lowest fees. Nick
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