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XP from the Nest: Retirement help, please

bunni727bunni727 member
Fifth Anniversary 1000 Comments 250 Love Its First Answer
in Chit Chat
I posted this in Money Matters on theNest, but thought the extra traffic over here would be usedful:

I have worked here for a year, and just became eligible for my employer's 403b retirement contribution. If I put 2% of my pre-tax income into retirement, they will contribute 7% into the account. Sounds good to me, so I'm working on signing up.

My problem is with the allocation screen in the online application. It wants me to select percentages of that contribution I would like to go into different investments that I mostly don't understand, like equities, money market, fixed income. These all seem to carry risks, and I just want to make sure I don't loose anything. Is it silly/naive to put all of my retirement into the guaranteed traditional annuity account they offer? The interest is only around 3%, but it seems safest to me.

I'm 23, if that affects anything.
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Re: XP from the Nest: Retirement help, please

  • courtski2004courtski2004 member
    Seventh Anniversary 1000 Comments 25 Love Its Name Dropper
    I would reccommend speaking with the contact of the investment firm that is handling your company's account for specifics as far as the website application goes.
    Based on your age, there is no harm in putting a percentage funds into a more moderate to aggressive money market account. You will most likely have the freedom to make changes to your investments throughout the year if you feel that it is too aggressive, but the older you get the less risky you want to be with those funds.
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  • cwaggoner07cwaggoner07 member
    5000 Comments Fourth Anniversary 25 Love Its Name Dropper
    As long as you diversify, you should be fine. A lot of times there are funds labeled 'low-risk' 'medium-risk' and 'high-risk' that are a mixture of other different funds. A lot of times I will pick 5-10 different ones and just spread my percentage out.

    Hope someone that is a little more experienced in this will speak up.
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  • bunni727bunni727 member
    Fifth Anniversary 1000 Comments 250 Love Its First Answer
    Thank you all! I can adjust the percentages around as often as I'd like, so it sounds as if I should select a variety and change it to a more conservative pattern if I feel it's needed later.

    If anyone has anything to add, I'll be checking back in and really appreciate any help I can get :)
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  • TheVirginiansTheVirginians member
    500 Comments 25 Love Its Name Dropper First Anniversary
    Now is the time to be risky, as others have said
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  • HuckSCHuckSC member
    Third Anniversary 100 Comments 25 Love Its Name Dropper
    In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_chit-chat_xp-from-the-nest-retirement-help-please?plckFindPostKey=Cat:Wedding%20BoardsForum:14Discussion:696c9c4e-0b80-48ef-b8e6-f4b1e18c33e5Post:934d99a5-fdc0-443e-b4db-252b6cef5d9c">Re: XP from the Nest: Retirement help, please</a>:
    [QUOTE]In Response to XP from the Nest: Retirement help, please : I'd also suggest that you contribute only the minimum to receive the match (unless you're already maxing out a ROTH IRA elsewhere).  At this point in your life, it'd be better to max out a ROTH than your 403b.  With a ROTH you're paying the tax upfront now, but you won't pay tax later when you receive distributions.  With your 403b, you won't pay tax now, but you'll be taxed when you take distributions.  Obviously though, you'll want to speak with a professional.  Good luck!
    Posted by Sleeper2013[/QUOTE]

    Here comes a different opinion than the above:
    Max out the match in your 403b before investing in a Roth. If you aren't maxing out the match then you are leaving FREE money on the table.
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  • HuckSCHuckSC member
    Third Anniversary 100 Comments 25 Love Its Name Dropper
    Oh gotcha. I couldn't really figure out what you were saying, but we were both on the same page!
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