My company uses Fidelity as our 401k provider and they offer what appears to be pretty good rates to manage your 401k allocation (Financial Engines). Right now I have my 401k in a target date fund, but I'm leaning toward using FE since the fees are so low. The management fee is 0.45% per year for the first $100,000.00 in your account and the percent continues to decrease after that.
I figure the ROI using FE would likely be better than the target date fund even with the management fee.
Any thoughts from the MB gurus?

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Posted by jimbeam

University of LSU

Member since Oct 2011

75703 posts

Posted on 5/5/14 at 5:24 pm to 2pumpchump

quote:
I figure the ROI using FE would likely be better than the target date fund even with the management fee.

I wouldn't say that at all.

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Posted by roguetiger15

Member since Jan 2013

17479 posts

Posted on 5/5/14 at 5:49 pm to jimbeam

If you are going to put your money in with a fund manager and portfolio I would be more than confident saying if you pick wisely it would be more beneficial than a target date fund. As a FA I reallllly don't like target date funds because they get too conservative too early. To combat that simply pick a date 10 years past your actual target if you want to go that route. Hope that helps. Can't really give you more detail bc I don't know your complete situation

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Posted by 2pumpchump

Atlanta

Member since Nov 2011

16 posts

Posted on 5/6/14 at 12:37 pm to roguetiger15

Thanks for the insight. As a single 29 yo with no kids, I'm thinking I'm in a position to take on a bit more risk. I currently put in 10% of gross pay (not including employer match) and will likely increase that soon. Total 401K is approaching the $100k mark, so the annual expense would only be $350 to have Fidelity manage it. Seems pretty inexpensive with the possibility of a big upside.

This post was edited on 5/6/14 at 12:38 pm

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Posted by tirebiter

7K R&G chile land aka SF

Member since Oct 2006

10811 posts

Posted on 5/6/14 at 2:45 pm to 2pumpchump

I have access to FE for free through an existing account. The recommended "improvements" to my portfolio would cost me more money upfront in capital gains, then have extremely similar LT performance with greater volatility from the recommended changes. No, thanks.

Target date funds can be fine, just look at the asset allocation within the fund/funds to ensure they meet what you are trying to accomplish.

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Posted by jtmiller02

Member since Jan 2013

114 posts

Posted on 5/6/14 at 3:46 pm to tirebiter

A bunch of Wall Street pros would never charge you to do something counterproductive:

https://www.businessweek.com/articles/2014-05-06/happy-hedge-fund-managers-earn-money-for-nothing

quote:
I have access to FE for free through an existing account. The recommended "improvements" to my portfolio would cost me more money upfront in capital gains, then have extremely similar LT performance with greater volatility from the recommended changes. No, thanks.

Target date funds can be fine, just look at the asset allocation within the fund/funds to ensure they meet what you are trying to accomplish.

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Posted by Cold Cous Cous

Bucktown, La.

Member since Oct 2003

15347 posts

Posted on 5/6/14 at 4:11 pm to jtmiller02

From the comments at that link:

quote:
I used to think the financial market looked like a pyramid, but I now realize it is more like a needle. From they eye of the needle upward to the point, all you get is the shaft, but at the point of the needle, Capitalism reigns down riches upon an elite few, all at the expense of the shaftees.

:wat gif:

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