I have been thinking about this for the past couple months and I want to take action within the month…just to take action instead of sitting around. I really want your opinions on testing retirement investment strategies left in your old employer retirement accounts.
I am in my mid-30s and I am very open and understanding of the volatility of the stock market.
I have been with my current company for several years and I have been participating in the company 401k including the contribution company match. I have a decent amount growing in there all in a Target Retirement Fund 20XX, which has seen a very nice return (around 15-20% last year…have to double check though).
However recently I forgot about 2 other company retirement 401k accounts I had with my previous employers.
While I leave my current employer’s retirement account alone, I have started to seriously consider testing different investment strategies for the other 2 accounts I have sitting with 2 former employers (one account is Vanguard and the other account is Fidelity).
The first account is less than $10,000 with Vanguard and just a couple weeks ago I switched 100% of that money from the same Target Retirement Fund 20XX to 100% in the Vanguard Institutional Index Fund Institutional Shares (VINIX). I figured this account has a relatively small amount of money, I am too lazy to roll it over (it takes a lot of manual steps), and l am comfortable being risky with this and putting it all into this fund. I saw the fee for this fund and figured it was really low.
The second account is with Fidelity and has a significantly higher amount…nearly the same amount as my current employer’s retirement account. I have thought about testing these 2 strategies, but hesitant to pull the trigger. Your opinions and thoughts are appreciated!
- Switch 100% from the current Target Retirement Fund 20XX to 100% of Fidelity’s version/offering of a broad stock market fund (S&P 500). As I get older or as I see too much volatility or the market eventually crashes, I can be more conservative and re-allocate a portion to a total bond market fund.
- Switch 100% from the current Target Retirement Fund 20XX to partially between Fidelity’s broad stock market fund AND dividing the rest of the amount among large cap ETF, mid-size cap ETF, growth cap ETF, and international ETF. Perhaps 25% to each fund.
It is really through these personal finance and investing podcasts that I have gotten really motivated and taken action the past several months.
Would appreciate any tips, advice, suggestions on testing different retirement investment strategies through former employer retirement accounts.