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Wife's 401k HELP

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AppState
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Wife's 401k HELP  Reply with quote  

My wife has about 20k in her 401k. She puts 5% in and employer matches 3%. Her options are abundant, I have two questions:

1. What would be the best to invest in, there are so many good choices. Options are pasted below.

2. I have very few options at my work, I put in 17% and company matches 6%. Everything goes into FID CONTRAFUND (FCNTX). Should I lower my contributions and up hers? I have 30k in my 401k. We are both 30 years old and all our debt will be paid off in June except house and 1 car at 3%.

Thanks in advance for your help.

Asset Allocation - Lifestyle
JH LS Agg Active Strategy

JH LS Grow Active Strategy

JH LS Bal Active Strategy

JH LS Mod Active Strategy

JH LS Con Active Strategy

Aggressive Growth
Tocqueville Gold Fund

Natural Resources Fund

DFA Emerging Markets Value

Royce Opportunity

Vanguard Energy Fund

Fidelity Adv Leveraged Co Stk

DFA International Value

International Value Fund

DFA US Targeted Value Fund

Keeley Small Cap Value

International Core Fund

T. Rowe Price Sci & Tech

Small Cap Opportunities Fund

Intl Small Cap Fund

Vanguard Small Cap Grow Index

Oppenheimer Developing Mkt

Small Cap Growth Fund

Intl Equity Index Fund

DFA U.S. Small Cap Fund

Mid Cap Stock Fund

Small Cap Index Fund

Science & Technology Fund

Vanguard Explorer Fund

Franklin Small-Mid Growth

Oppenheimer Global

Templeton World

EuroPacific Growth Fund

Legg Mason ClearBr Agg Growth

Oppenheimer Intl Growth Fund

Small Company Value Fund

Invesco Small Cap Growth

SMALLCAP World Fund

American Century Heritage

Vanguard Mid-Cap Growth ETF

New World Fund

Real Est. Securities Fund

T. Rowe Price Health Sci

Financial Industries Fund

Growth
Ivy Asset Strategy Fund

Vanguard Small Cap Value Index

Fundamental All Cap Core Fund

T. Rowe Price Sml Cap Val

John Hancock Intl Growth

Mid Cap Index Fund

Victory Diversified Stock

Small Cap Value Fund

Invesco International Growth

Value Fund

Capital World Growth & Income

All Cap Core Fund

John Hancock Disciplined Value

Blue Chip Growth Fund

Vanguard Mid-Cap Value ETF

New Perspective Fund

Capital Appreciation Fund

John Hancock Select Growth

Mid Value Fund

Massachusetts Investors Fund

The Growth Fund of America

Fundamental Investors

Davis New York Venture

Domini Social Equity

Vanguard Growth Index Fund

Total Stock Market Index Fund

Pru Jennison Mid Growth Fund

Utilities Fund

Growth & Income
Equity Income Fund

Vanguard Value Index Fund

T. Rowe Price Equity Inc

500 Index Fund

FT Founding Funds Allocation

Investment Company of America

JPMorgan MidCap Value Fund

Franklin Mutual Beacon Fund

Fidelity ContraFund

Fidelity Adv New Insights

Mutual Global Discovery

Parnassus Core Equity Fund

Pax World Balanced Fund

Washington Mutual Investors

BlackRock Global Allocation

U.S. Equity Fund

American Balanced Fund

Capital Income Builder

Income Fund of America

PIMCO All Asset

Fundamental Large Cap Value
Post Thu Jan 29, 2015 1:12 am
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oldguy
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In my view, your FCNTX is better than anything on the list - almost 50 years of averaging 12.5%/yr. (That doubles every 6 years, Rule of 72). And it provides great diversification - large cap, mid caps, small caps, int'l. From your wife's list I'd pick either the 500 Index Fund or the Total Stock Market Index Fund.

I would keep doing what you're doing. The $30,000 that you have invested should be about $690,000 at age 60. And your annual investing will add $1.1M per $5000/yr - and at 23% of your pay, I'm guessing that you're putting in way over $5000?

As for the 2 debts, I would keep them both full term, you never prepay 3% capital. And US mortgages are one of the best sources of capital in the world, low rate, fixed rate, 30 years - that's a keeper. Don't allocate any of yur income stream to prepaying, instead put that maoney to work elsewhere.
Post Thu Jan 29, 2015 3:20 am
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AppState
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I put in $16k a year, i was thinking about taking a loan out for the car that is paid for $8k and refinance the home $30k, take that $38k and invest. Opening a roth account for myself and my 2year old, 19k at 60 years should make him a muiltimillionare. Thanks again for the advice oldguy.
Post Thu Jan 29, 2015 4:56 am
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GardenCat
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You cannot open a Traditional IRA or Roth IRA for someone that does not have earned income ( not capital gains or any investment gains).

For your 2 yr old, you can open a "custodial" account for a minor. Any gains in value would be taxable on your income tax return, at your rate.

Also, for your 2 yr. old, you can open a 529 College Fund, which will not be taxable except for certain uses (not college..., with some exceptions).

With a custodial account, your child would become the owner of the account and its monies upon reaching the age of entitlement in your state (usually 18 or 21). They can then do whatever they want with the money...

For your young child, investigate the different type of accounts available to you as the "custodian" - it can be a trust, or a 529, or other options...

BUT before you go into any debt to have investment funds (leveraging your money, not always a good idea) make sure you have some basics covered - 6 months to 1 yr of easily accessible money if you and wife become unemployed or medical disaster happens. and that you are both on the same page as to how you want to live your lives, i.e. living below your means...javascript:emoticon('Laughing')

Good Luck
Post Thu Jan 29, 2015 5:18 pm
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oldguy
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quote:
thinking about taking a loan out for the car that is paid for $8k and refinance the home $30k, take that $38k and invest.


Yeah, that's what I do Very Happy

But, as Cat says, the govt retirement plans don't work for kids cuz they have no W2 income.

I avoid the govt kid plans, we keep our money in our own name and then use it w/o constraints. The gov plans seem to last for about one 'kid' cycle, then congress changes it. Eg, the 529 plan is 18 years old, this week Obama is talking about taxing that money - it barely lasted thru one 18 yr kid cycle. Same with the earlier plans, coverdell, etc. We keep that money in our names in a taxable SP500 at Vanguard - used it for college for kids, rental houses, whatever we want - and the money has no constraints - it grows tax deferred and it is available as an EF.
Post Thu Jan 29, 2015 5:50 pm
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Wino
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quote:
Originally posted by GardenCat
You cannot open a Traditional IRA or Roth IRA for someone that does not have earned income ( not capital gains or any investment gains).

That's not 100% true. You can have one spouse with no earned income and have an account using the other spouse's earned income. All of the same rules apply for both accounts.
Post Thu Jan 29, 2015 6:10 pm
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GardenCat
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True for spouses, you can put money into a spouses IRA

But for children... True also: any person without W-2 income or business income (earned income) cannot put $ into an IRA, nor can someone else do it for them...
Post Sat Jan 31, 2015 6:09 pm
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Heirloom
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Maximizing what your employer will match in your 401k is excellent.

Funding the 401k beyond that match locks up dollars that could be used in other ways that are more advantageous to you both now and in the future.

You're doing great on the savings side. Consider taking the dollars you are putting into the 401k above the employer match and maxing out ROTH accounts for you and your wife. You'll have much better investment/management options there as well.

For your 2yr old find an excellent agent who can properly design a cash value life policy to show you. I've used this approach with clients wanting to save for college The positives: tax free withdrawal for whatever college expenses you want to pay, cash growth is protected from market losses, if your child doesn't go to school you have other options to use the cash growth.

Be Well
Post Sun Feb 01, 2015 3:06 pm
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Wino
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quote:
Originally posted by Heirloom
For your 2yr old find an excellent agent who can properly design a cash value life policy to show you

Absolutely not. Cash value life insurance is the biggest rip off done without a gun. Buy term life insurance, and set up a 529 plan for the 2 year old. If anyone tries to sell you "whole life" "variable life" or any other type of cash value life insurance, run away and fire that agent.
Post Sun Feb 01, 2015 6:06 pm
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oldguy
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quote:
Absolutely not. Cash value life insurance is the biggest rip off done without a gun.


AGREE!!
Post Sun Feb 01, 2015 11:48 pm
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