Good morning WCIers,
I will be starting my first attending job in August and want to get some financial tools in order to hit the ground running so to speak. I have been an avid WCI reader since medical school and very much desire a simple, passive approach to investing. Anyway, my employer has a 401k with investment options available through fidelity. I have attached screen shots to show the options available to me.
I would favor a profile similar to WCI or POF but want to ensure that the funds I am choosing through Fidelity most closely match my goals.
Would you folks be willing to offer the options you think match the following allocation?
70% stocks –> 50% US, 20% international
This is my current allocation through our Roth IRAs. Alternatively, would other investments be more advantageous in this type of account?
Thanks for your time.
Attachments:You must be logged in to view attached files.January 9, 2019 at 7:18 am MST #179834JBMEParticipantStatus: SpousePosts: 236Joined: 03/26/2018
It would be helpful if you told us what the expense ratios were for each. I’m not going to directly answer your question based on your screenshot as others probably would give a better answer, but in general:
If you don’t have a taxable account, put the 10% bonds in your 401k plan and not your Roth IRA. If you want REITs at 20%, try to put all of that allocation in the Roth rather than your new 401k.
Finally, since you’re a resident, do you currently participate in a 401k/403b? If so, is it a Roth 401k/403b? You should seriously entertain the idea of rolling any tax-deferred money (if there is any) into your Roth IRA this year and paying the tax on that money, as your salary after this year will be a FT attending salary, and therefore relatively very high. If you’re a resident with a Roth 401k/403b, just roll that over to your Roth IRA when you leave residency. You won’t pay taxes since you already did.January 9, 2019 at 7:47 am MST #179844
Thanks JBME. I can give some more information that may be helpful.
1. My wife and I both had traditional IRAs that I converted to Roth IRAs (through Vanguard) in 2018.
Mine has 60% TSM and 40% small-cap index. Hers has 40% TISM, 40% REITs, and 20% bonds.
2. I have a small taxable account that was opened on my behalf when I was very young, but I do not have much in it and the investments that have ben made were done so on my behalf. I have never contributed to it. It is through EdwardJones and will likely be moved to a different place (e.g. Vanguard, Fidelity, etc.) in the not too distant future.
3. I am actually a fellow. I completed my residency last year. We have access to both a 401k and a 403b. I am currently participating in a 401k through my employer that is also in Fidelity. I have not contributed much there yet but have a large signing bonus coming through as well as additional monies (totaling $4,000 into the account) which I want to allocate correctly.
I will review some of the ERs of the funds I was considering and post them.January 9, 2019 at 8:42 am MST #179857
Perhaps a better more general question is which assets are better suited for a 401k versus a Roth IRA or taxable account? I think that can help me formulate a plan.January 13, 2019 at 10:53 am MST #180979CordMcNallyParticipantStatus: PhysicianPosts: 1212Joined: 01/03/2017I have not contributed much there yet but have a large signing bonus coming through as well as additional monies (totaling $4,000 into the account) which I want to allocate correctly.Click to expand…
Be careful with signing bonuses as it is likely contingent that you stay a certain time period to retain the full bonus. Just make sure it won’t be too much of a hassle to repay the money if your first job doesn’t work out.
“But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
― Benjamin Graham, The Intelligent InvestorJanuary 13, 2019 at 11:33 am MST #180990