Investing help! (help pls I know very little)

Jan 12 11 Comments

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

comments

Want to comment? LOG IN or SIGN UP
TOP 11 Comments
  • Walmart
    rorcal

    Go to company page Walmart

    rorcal
    Good question. The 2060 fund you're talking about is likely to be a retirement fund. Retirement funds are a mix of stocks, bonds, REITs and other securities. These funds start off weighted heavily towards riskier securities like stocks and real estates and slowly increase their weights towards safe instruments like bonds as you reach your target date (in this case 2060). These target funds are perfect if you want to ensure a safe retirement.

    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.
    Jan 12 2
    • ahhh i see thank you for the thorough explanation 👍🏼👍🏼
      Jan 12
    • New / Product
      00009

      New Product

      00009
      Seconding this comment as it’s a great explanation of how Target Funds work. Go with that. :-)
      Jan 12
  • Apple
    sVwz85

    Go to company page Apple

    sVwz85
    Split 50/50 between those two.
    Jan 12 0
  • PayPal
    aaaaabbbbb

    Go to company page PayPal

    aaaaabbbbb
    Dilbert’s one-page personal finance list

    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.
    Jan 12 0
  • Microsoft
    👨‍✈️ Obvious

    Go to company page Microsoft

    👨‍✈️ Obvious
    You have $401k saved at 28? Wow that’s pretty awesome dude
    Jan 12 5
    • Brex
      jFsnGsv4

      Go to company page Brex

      jFsnGsv4
      I don't agree with bonds personally when you are young and have long time horizon. I would also diversify some (up to you) to International Market Index.

      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.
      Jan 12
    • R1 RCM
      Live!

      Go to company page R1 RCM

      PRE
      Amazon
      Live!
      👨‍✈️ Obvious should change the name to 👨‍✈️ Oblivious.
      Jan 12