Looking for some insights from experinced/senior folks ... I just rolled over my 401k from my previous employer to a traditinal IRA account. i plan to keep this as my base account for moving 401k everytime i switch employer. i cannot decide whether to go for managed account service from fidelity. why or why not? the fee for managed account is 1.17% of the total amount in account. one thing the advisor mentioned was with managed the loss is cut down during recessions i do have a roth IRA ( managed by me ) and 401k ( new employer ) . im aware of funds and markets , but not an expert . please share your thoughts. want to take an informed decison and not regret 30 years later . TIA
1.17% is enormous one you look at the impact over time. Always go for smallest fees/cost. No manager beats average in the long haul. Nobody.
You should also ditch that IRA if you ever want to to do a backdoor Roth.
I also have a backdoor Roth , and I max it out as long as I can . I could have rolled over my 401k to Roth IRA ,but seeing a chunk of it going to taxes would be painful
I haven't heard good things about Fidelity managed account. 1.17% is really high.
I used Fidelity for a year and it was horrible. They had me in a ton of assets (~20). Their algorithm didn’t allow for $0 in cash even though I told them I had cash outside of this account. So I had to pay 1% for them to manage cash 😑 So, I got out of it. I suggest that you spend some time and manage it on your own. It makes no difference if you have $1k or &1m, the principals are the same. You don’t need to diversify into more than 5/6 assets, buy low cost index funds, divide them in a risk ratio that you’re happy with, then just forget about it. Check and rebalance every year.
That’s really sage advice. I’ve very naive about financial matters & picked a crummy allocation
Is there a foundational/bedrock text that’s vouched for you might recommend to somebody who’s got a bit of dough but needs an 101-style education of all the options out there & implications?
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Avoid actively managed funds. The vast majority of them will not beat an index fund, and will happily take your money while doing so.