Hey all I’m 28 and just signed up for a 401k (was in school until 6 months ago). I’m at a startup now and my employer doesn’t offer too many options for 401k. I’m stuck between the “Fidelity Total Market Index” vs “Fidelity Freedom 2060 k”. If I don’t plan on touching that money until i’m 65 which one should i do? I’m thinking the total market index as it is closer to the SP500? I’m open to any and all suggestions.
tc: 220k
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A total market index fund is a fund that tracks all stocks in that market. No bonds or Precious metals or anything else here. Just stocks, these are riskier than bonds but provide greater returns. These tend to be part of the target date funds I just mentioned. They can act as a strong component of a portfolio that is diversified across different appetites of risk.
I'd go with the Target fund since it does all the rebalancing for you and is better diversified across different types of securities and you literally don't have to worry about anything apart from adding money into it.
Make a will.
Pay off your credit card balance.
Get term life insurance if you have a family to support.
Fund your company 401K to the maximum.
Fund your IRA to the maximum.
Buy a house if you want to live in a house and can afford it.
Put six months’ expenses in a money market account.
Take whatever is left over and invest it 70 percent in a stock index fund and 30 percent in a bond fund through any discount brokerage company and never touch it until retirement
If any of this confuses you, or you have something special going on (retirement, college planning, tax issue), hire a fee-based financial planner, not one who charges you a percentage of your portfolio.
Target Date Funds generally are like 60:40 US to International and like 10% bonds. I would personally DIY and not have that 10% bond.
Of course no one knows the future.