401k: choose targeted date or index funds?
For 401k investments, should you choose a targeted date option or index funds? I have my 401k with Fidelity and have it as a targeted date but recently found I could change to index funds or a mix of both. TC: 148k #401k #retirement #investments #personalfinance
Full index funds for now. 5 years before intended retirement start migrating assets from equities to bonds/something less risky. Or 10 years before if you want to be paranoid.
Target date funds have a higher expense ratio and have been performing worse than index funds lately
depends on how much risk you can take, and what’s your goal on 401k .
Target date funds will have a slightly higher expense ratio, but will balance automatically all the asset allocation (bonds vs stock) according to your age and the market performance. You are basically paying a bit more for that autorebalancing. If you are more than 10-15 years from retirement you can just got all stock in index funds. Beyond that point better to start sliding your asset allocation to something more conservative (even age in bonds!) so the target date funds might be better.
Thanks for the advice everyone! I'm going to start moving over to index funds instead of relying on the targeted date and might switch back later closer to retirement.
My 401K nearly doubled (80%+) by putting it in tech related growth index fund. Can’t remember which one. A little riskier but I am under 30. Definitely need to weight the risks and possibly keep a portion in safer areas. At the end of the day talk to one of Fidelity’s people over Blind folks (pun intended)
Which fund?
Just NASDAQ is good to follow tech. Saw ridiculous growth last year.