Calling on Financial Experts....Need your Help

[believenfaith]

Ok, first I am going to start off with a disclaimer: I AM GUILTY OF NOT UNDERSTANDING INVESTING VERY WELL AND HAVE PUT MY MONEY INTO RETIREMENT VEHICLES THAT DIVERSIFY THE INVESTMENT BASED ON AGE. (I will say that to this point it seemed to work for me)

That being said, I transferred my 401K money into an IRA in Nov 2010 and rolled over 91K. Since that time, I have invested $200 monthly, so approximately $4200 through June 2012.

The DOW closed on 11/10/10 @ 11,215. Yesterday's close was 13,474.

The value on my IRA as of June 30, 2012 was $91,601. So, in 2 years of adding $$ and an improved market, I'm no further ahead and I feel as though I just blew 4K.

I have a call out to my planner and want to be sure I'm asking the right questions. In looking at my statement, I think part of the culprit may be the feesI am being charged a quarterly billing rate of .22%..last quarter the fee was $205.33. Multiply that by 4 and that's 1/3 of what I am investing this year The annual percentage fee is .90 for investements less that 100K....is that an industry norm??

Sorry so long, just looking for some guidance from the financial pros that are out there on the DIS.

Thanks for any insight anyone can offer

 

[tOSU]

Just because the DOW is up since your initial investment doesn't mean your IRA is. There are other reasons as well, but that will take more time to explain.

 

[ilovemk76]

The first thing I would do is compare your fund(s) with the morningstar ratings to see how they perform against all funds in their class. Then I would check to see the risk level of the fund.

We invest mostly in Vanguard funds. They have very low load funds.

 

[The Mystery Machine]

I am no expert by any means.

For starters you are supposed to keep your 401K and then have an IRA in addition to the the 401K. At least that is what makes sense to me.

In other words you spread your "investments" into different areas, it is called diversification.

You want several safe investments & if you have the cash to gamble, you put your money into higher risk categories.

Not sure what to tell you to fix it but good luck! I know we have plenty of financial folks here on the DIS.

 

[rigs32]

Your funds likely don't mirror the DOW. So the return won't be the same. Sometimes you'll beat it and sometimes you won't.

 

[CoP Luv]

Also, you didn't invest all of your money when the Dow was low in 2010. You continuously invested when it was going up, so you aren't going to see as much as a return either when you were buying high.

 

[Janepod]

Within your IRA, how are your investments allocated? Please don't say all into fixed-income vehicles/cash.

You should talk to your financial advisor (it would be wrong of us to give you specific investment advice here - none of us knows your age, other investments, risk tolerance, etc.) but GENERALLY you want your IRA to have a mix of stocks/mutual funds allocated across blue chips, small- and mid-caps, foreign stocks, REITs, etc.

Good luck.

 

[mrodgers]

Should have left it in the 401k. I quit contributing exactly 1 year ago this week, so year to date shows my last contribution of $156 first week last October. I've made $25,000 in the last year, which is more than I've made the entire 8 years prior.

Would have been nice contributing during this past year too, but the debt bills piling up wouldn't have allow me to ever retire anyways until I quit contributing and used that money.

 

[Mary2e]

What funds are you invested in? Are they load or no load? Why are you paying fees at all for target date funds, most of which are no load.

I think your planner has you in funds that make HIM money before you.

 

[believenfaith]

Should have left it in the 401k. I quit contributing exactly 1 year ago this week, so year to date shows my last contribution of $156 first week last October. I've made $25,000 in the last year, which is more than I've made the entire 8 years prior.

Would have been nice contributing during this past year too, but the debt bills piling up wouldn't have allow me to ever retire anyways until I quit contributing and used that money.

I left Full time employment in 2010 and became self-employed. I could be wrong, but at that time I thought I had to pull it from the 401K because I was no longer an employee

In any event, can't change it now and your post re-affirms what I've already stated about myself....I'm not the best at finances

 

[Eeyore'sthebest]

I left Full time employment in 2010 and became self-employed. I could be wrong, but at that time I thought I had to pull it from the 401K because I was no longer an employee

In any event, can't change it now and your post re-affirms what I've already stated about myself....I'm not the best at finances

No, you can maintain your 401K at your former employer until you wish to do something else with it. You can no longer contribute to it or take loans but you can leave it. I just rolled 2 401K accounts to my new employer. I left one in 2008 and hte other in 2011. Just rolled them last month finally. Not quite sure why I waited but I did.

 

[cornflake]

I left Full time employment in 2010 and became self-employed. I could be wrong, but at that time I thought I had to pull it from the 401K because I was no longer an employee

In any event, can't change it now and your post re-affirms what I've already stated about myself....I'm not the best at finances

No, the point of a 401K is that it'll sit there - you have no employer you won't be getting the funds put in, but it'll sit and grow.

As everyone else said, what's your IRA invested in? What's the breakdown at least?

Your investments won't mirror the DOW unless they mirror the DOW. If you're in a portfolio of DOW stocks or indicies pegged to the exchanges, it makes no nevermind. You could be invested in like, all Indian market funds.

 

[RitaE]

There are 401ks that will require the employee to withdraw funds within a time period after termination.

IRAs are generally thought to be better than 401ks when given a choice because a 401K plan is usually limited to 10 or 15 choices selected by the company and IRAs can invest in thousands of different ways.

The age targeted funds that have become really popular are very often extremely high on the expense ratio side. The high expense ratios mean they have to earn even higher returns to perform anywhere near decently. There are a few better ones however.

If you have a financial planner - then you need to sit down with him or her and get explanations until you understand where your money is and what you are paying for the privilege of having it there.

 

[ilovemk76]

No, you can maintain your 401K at your former employer until you wish to do something else with it. You can no longer contribute to it or take loans but you can leave it. I just rolled 2 401K accounts to my new employer. I left one in 2008 and hte other in 2011. Just rolled them last month finally. Not quite sure why I waited but I did.

Not 100% true. If you do not have above a minimum then you mustove the money.

I would never roll a previous 401k into a new one. Most 401ks have too few funds to choose from. When I roll a 401k it goes into Vanguard where I have many more fund choices.

 

[Buzzsgramma]

VANGUARD in one word....hubby retired four years ago....you need to be in no- load funds...and diversify..
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