Thursday, November 16, 2006

401k elections for the balance of the year and 2007

As I'm still waiting for the completed investment plan from my investment manager - who in turn has probably been waiting for my 401k investment options from Big Company - so we can't really blame him, I'm in a position of having to select investment options without the certainty of where they should reside.

Have you been in this situation?

My short term solution is to place the money in my 401ks stable value fund (think Money Market). I was quite disappointed to learn it ws only paying about 3.8%, which is pretty poor compared to Schwab or the online savings account options.

I haven't found how to print out the fund explanation worksheets - where I can learn the expense ratios, etc.... I'm a bit frightened as to what I might see.

The retirement plan does have something called a Brokerage Window - I assume it's a method to invest in something other than the 24 investment options presented. I wonder what Big Brokerage charges to hold assets in the plan via the Brokerage Window - is there a toll for crossing the threshold or a rental charge for sitting on the window sill?

I was very disappointed for that Big Company - which claims to be so smart - didn't offer Vanguard as a retirement plan provider. Well, I'm just one little person and will make the best of it.



The Sarcasticynic said...

Does your 401(k) offer "lifestyle" funds? They are a good way to put money to short term use that can meet your individual goals. Typical lifestyle funds may be called Income, Growth, Moderate, and Aggressive. I have found them useful over the years.

makingourway said...

In the past I used lifestyle funds, however, now that I'm working with an investment manager, we'd like each investment to be pretty specific and clear how it fits into the asset allocation plan.
Lifestyle plans are too dynamic and sometimes vague in their asset allocation reporting to use them in our planning.

My advisor recommended the the most cost efficient funds in 401k plans generally tend to be large cap market or large cap value, so that's what we'll probably expect to put there.

He just sent me an initial asset allocation model, we'll kick it around a bit and look at what should go where.


Anonymous said...

Who is the provider?

We have Fidelity, Scudder, and TIAA-CREF as options. I use to TIAA-CREF.

makingourway said...

My highly reputable very big employer has an investment program managed by a brokerage house - and not one of the famously honest, low cost players like tiaa cref, vanguard, etc....

In navigating the website, I noticed the brokerage house did everything possible to eliminate and obfuscate expense ratios.